Case ID: ad_121/html/0462-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Miller, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Clinton Beckwith, Respondent, v. The City of New York, Appellant.
    Second Department,
    October 4, 1907.
    Municipal corporation — when water commissioner cannot rescind' contract — damage —- prospective profits — interest.
    "After a municipal contract has been awarded by the commissioner of water,.gas and electricity of the city of " New York and the contractor's sureties have been approved, and he has placed preliminary orders so as to he in a position to execute his contract, the commissioner cannot- rescind the contract and reject all bids on the ground that the comptroller has not certified that there is a fund applicable to payment, as required by section 149 of the charter, if in fact there he such fund and the certificate was not issued merely because . the contract was never'presénted by the commissioner for certification.
    Under such circumstances the commissioner "will not he compelled by mandamus to execute the contract, for the contractor has-a remedy by action.
    In an action against the city based on such refusal of the commissioner to carry out -the contract the plaintiff may recover, his prospective profits, wliich should "be arrived at by deducting, the cost of carrying out the contract from, the contract price. He may in addition recover for any expense to which he has been put and from Which he can derive no benefit by reason of the breach.
    The value of. material purchased by the plaintiff to carry out the contract should he included in the estimated cost of doing the work, but if not so included, the present value of the material should be deducted from the prospective profits.
    The plaintiff is not entitled to interest from the date of filing claim, when the same is not capable of ascertainment by computation based on established market values, etc.
    Appeal by the defendant, The City of New York, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Kings on the 23d day of January, .1907, upon the decision of the court rendered after a trial before the court without' a jury "ait the Kings County Trial Term, and also (as stated in the notice of appeal) from an order denying the defendant’s motion for a new trial made upon the minutes.
    
      Theodore Connoly [Francis Martin and William B. Ellison with him on the brief], for the- appellant.
    
      Edward M. Grout [James F. McKinney with him on the brief]for the respondent.
   Miller, J.:

The appellant argues that this action, being for breach of contract, cannot be maintained for the: reason that no enforcible contract was made, and that it should have been brought for a failure to make a contract. The argument, to say the least, is not ingenuous, for the complaint alleges the refusal .of the defendant to execute a contract which had been awarded to the plaintiff upon competitive bidding after all of the requirements .of the statute had been observed. The contract duly awarded as aforesaid was for furnishing, delivering and laying water mains in certain streets in the borough of Richmond. After it had been duly awarded and after the plaintiff’s sureties had been approved and after the plaintiff, upon notice to the chief engineer, had placed preliminary orders so as to be in a position to execute his contract speedily, as he was required .to do by its terms, "the commissioner of water supply, gas and electricity refused to execute the contract and rejected all bids.

The appellant relies on the following provisions of section 149 of the charter (Laws of 1901, chap. 466, as amd. by Laws of 1904, chap, 247), to wit: “No contract hereafter made,the expense of the execution of which is not by l'aw or ordinance, in whole or in part, to be paid by assessments upon the property benefited, shall be binding or of any force, unless the comptroller shall endorse thereon his certificate that there remains unexpended and unapplied, as herein provided, abalance of the appropriation or fund applicable thereto, sufficient to pay the estimated expense of executing such contract, as certified by the officer making the same.” Such certificate was never made for the reason that the contract was never presented to the comptroller for his certificate, said commissioner having rejected the bids after awarding the contract as aforesaid. Section 419 of the charter contains the following provision : “ If a borough president or the head of a department shall not deem it for the interests of the city to reject all bids, he shall, without the consent or approval of any other department. or officer of the city government, award the contract to the lowest bidder, unless the board of estimate and apportionment by a three-quarter vote óf the whole board,- shall determine that it is for the public interest that a bid other than the lowest should be accepted'; * * •

It is not' claimed that the board of estimate and apportionment so determined, and it is plain that having awarded the contract the commissioner' liad no power to reject all bids. (Pennell v. Mayor, 17 App. Div. 455.) The commissioner, however,' could not be compelled by mandamus to execute, the contract for the reason that the plaintiff had a remedy in- the present action. (People ex rel. Lunney v. Campbell, 72 N. Y. 496.) It-.can be no defense that the comptroller never did what he was prevented from doing by the breach complained of. The plaintiff; proved, and it "was not disputed, that there were funds, applicable thereto, sufficient to pay the estimated expense of executing the contract, and, but' for said" Wrongful rejection of bid's, the comptroller could have been coin polled by mandamus to make the certificate in case of a refusal, for his. duty was purely ministerial. This casé is controlled by the. decision in Lynch v. Mayor (2 App. Div. 213), • for 'while the appellant seeks-to distinguish that case by asserting that the present statute materially differs from the statute in force when the contract-' involved in that case was awarded,'a comparison-of'said section 149 of the charter and section 123 of the Consolidation Act (Laws of 1882, chap. 410) discloses that, so far as the. question" now under consideration is - concerned, there is no material difference .'between the two. Moreover,.as we view it,"the opinion of the court in Lynch v. Mayor correctly states the law applicable to this case, and while the court in that case did not discuss said section 123 of the Consolidation Act, now superseded by said section 149 of the charter, they evidently deemed it, as we do, immaterial. Had the contract been executed, the provision quoted from said section 149 would apply, and said contract would have no binding force' until the-certificate was made". ' - - ‘ .

The plaintiff was permitted to recover the sum of $30,231.09, the • prospective profits which liis proof showed were lost, and the sum-. of $2,052.50 for the -following expenditures,.' to 'wit: Cost of jfipe - purchased, $975.50 ; the cost of two valves, $277; cost of bond, $350; expense of formulating, bid, $150, and cost of plans, $300. The- prdr spective profits lost were proper elements:©! damage under the leading case of Masterton v. Mayor, etc., of Brooklyn (7 Hill, 61), which both sides rely upon. These profits were properly arrived at by deducting wliat it would cost to execute the contract'from the contract' price, and it- may be. conceded -that the plaintiff -could recover in addition to that any expense to which he was put and from which he could derive no- benefit by reason of the defendant’s breach, but it was not shown that the plaintiff wonlddose the costrof the pipe and valves. There was some evidence that the pipe had no value except for the iron, and that there was no market for the valves except in the city of New York, but there was not sufficient proof .to show what either the pipe or the valves were worth. . As to the other items of expense enumerated supra, if allowable at all, they should have been included in the estimated cost of doing the work, but an’examination of the evidence discloses that the prospective profits were arrived at without including said items of expense in the estimated cost of doing the’work; hence, if allowed at all, they should be deducted' from the prospective profits.

The plaintiff was also allowed interest from the date of filihg the claim: This, we think, was improper for the reason that the amount due was not capable of being ascertained by 'mere computation. While the rule that interest is not allowable on unliquidated demands has been somewhat modified, interest has only ’ been allowed where the debtor, by reference to established market values, contract prices or otherwise, could by.mere computation ascertain the amount which he owed. (See Gray v. Central R. R. Co. of New Jersey, 157 N. Y. 483; Sweeny v. City of New York, 173 id. 414; Excelsior Terra Cotta Co. v. Harde, 181 id. 11.) The ascertainment of prospective profits on such a contract as the one involved here depends upon many elements other than established market values,.and it cannot be said .that such profits could have been ascertained by the defendant by mere computation. Upon the proof the plaintiff was only entitled to recover as damages the sum of $30,231.09, and the extra allowance should be computed on that sum.

The judgment should be modified accordingly.

Jerks, Hooker, Gaynor and Rich, JJ., concurred.

Judgment'and order reversed and new trial granted, costs to abide the event, unless the plaintiff within.twenty days stipulate to reduce the recovery to the sum of $30,231.09, with a proportionate reduction of the extra allowance, in which event the judgment as reduced is affirmed, without costs.