Case ID: ad_146/html/0850-01.html
Source: Caselaw Access Project
Author: {"author": "Clarke, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The City of New York, Respondent, v. Michael Palladino, Appellant, Impleaded, with the United Surety Company, Defendant.
    First Department,
    November 17, 1911.
    Contract — municipal contract — privilege to sort refuse — when no breach by city — estoppel —right of city to do work without reletting contract — damages — penalty — harmless error.
    Where a contract under which the contractor was to pay the city of New York a certain sum per week for the privilege of sorting and appropriating refuse at thirteen specified dumps and two incinerators provided-that the contractor in bidding for the privilege must satisfy himself by personal examination of the proposed work and. by such other means as he might select as to the .quantity, quality and nature of the work, and ■the value of the privilege, and should not after the submission of the bid assert that there was any misunderstanding in regard to the same, and that under no circumstances would rebates or refunds be allowed, the contractor is estopped from claiming that there was a breach of contract by the city because one of the incinerators became out of order by reason of fire.
    It is no defense to' an action on the bond of such contractor that the city, being unable to find another contractor, had the work done by the week without advertising and reletting the contract, if the refuse was accumulating and became a menace to public health.
    Although in an action on said bond the court erred in holding that it pro- ■ vided for liquidated damages instead of for a penalty the error was harmless where the proof shows that the damage to the city by the contractor’s default was largely in excess of the amount of the penalty.
    Appeal by the defendant, Michael Palladino, from a judgment of the Supreme Cotirt in favor of the' plaintiff, entered in the office of the clerk of the county of New York on the 21st day of December, 1910, upon the verdict of a jury rendered by direction of the court, and also from an order entered in said clerk’s office on the 20th day of December, 1910, denying the defendant’s motion for a new trial made upon the minutes.
    
      Herbert C. Smyth of counsel [Roderic Wellman with him on the brief], Wellman, Gooch & Smyth, attorneys, for the appellant.
    
      Loyal Leale of counsel [Theodore Connoly with him on the brief], Archibald R. Watson, Corporation Counsel, for the respondent.
   Clarke, J.:

This action was brought on a bond ■ given by the defendant the United Surety Company for the proper performance by the defendant Palladino of a contract with the city for loading and trimming deck scows and other vessels of the department of street cleaning under which he was to pay $1,501.25 a week in advance for thirty-two weeks for the privilege of sorting, picking over and appropriating certain of the refuse at the city dumps. A prior contract had been, given to one Paoli and abandoned. The department of street cleaning readvertised and Palladino obtained the contract. A suit against Paoli and his surety upon the bond given by them resulted in a judgment for the city which was affirmed by this court and the Court of Appeals. (City of New York v. Paoli, 136 App. Div. 939; 202 N. Y. 18.) Palladino paid the amount due for one week in advance and then abandoned the work.

' Appellant claims that the-plaintiff had breached the contract and that,, therefore, he had a right to abandon. The proposal, which is a part of the contract, stated as follows: “The com-, pensation to be paid to the city of New York by the Contractor must be stated at a price per week, in advance, for the privilege, and work at all the dumps and the incinerators of the department of street cleaning, in the borough of Manhattan, as enumerated below, viz., East Side dumps: Clinton Street, Stanton Street, Delancey Street Incinerator, East Twenty-ninth Street, East Forty-sixth Street, East.Sixty-first Street, East Eightieth Street, East One hundred and seventh Street, East One hundred and thirty-ninth Street; West Side dumps: Canal Street, West Thirtieth Street, West Forty-seventh Street, West Forty-seventh Street Incinerator, West one hundred and thirty-fourth Street.” That is to say, twelve dumps and two incinerators.

The breach claimed was that several months before the execution of the contract the Forty-seventh street incinerator had been damaged by fire and that thus the city did not give Palladino the opportunity which it had promised him to make money from his refuse sorting and picking enterprise. It is admitted that while there was a dump at Forty-seventh street, this incinerator was out of order. It was stipulated on the trial that the disposition of the garbage was largely facilitated by the presence and use of an incinerator, and that on this particular dump the presence of an incinerator would be a financial advantage to the contractor. The city,- while admitting the fact and making the said stipulations, claims that the defendant took no advantage by said fact, because the clause of the proposal following that enumerating the dumps provided as follows: “Bidders must satisfy themselves by personal examination of the proposed work, and by such other means as they may select as to the quality, quantity and nature of the work to be done by the Contractor and the value of the privilege to. him, and shall not at any time after the submission of a bid or estimate assert that there was any misunderstanding in regard to the same, and must take notice that under no circumstances whatever will rebates or refunds be allowed,- or any deviation from the terms and" conditions of the contract.”

I think .the provision cited éstops the defendant from claiming that there was any breach which authorized abandonment by virtue of the fact that the incinerator was out of order. There was a dump at West Forty-seventh street, and there were besides thirteen other places for him to work at. It would seem that the contract was breached by him, not because of, the incinerator being out of order, but because he found he paid too much for the job.

The second claim is that the contract was not advertised and relet as provided in paragraph F. After this second abandonment the commissioner made unsuccessful efforts to find another contractor, but, as the city refuse was accumulating, did not readvertise, but procured contractors by the week to trim and load the scows, and gave them the privilege of sorting and picking in order to get the stuff out of the way. Two contractors had abandoned the contract, and the accumulating refuse would become a menace to the public. The authorities were warranted in putting an end to this condition in the way employed. Neither the contract nor the law required a further readvertisement. ,

The third claim is that the trial court erred in holding that the bond sued oh provided for liquidated damages. It is clear that the said bond provides for a penalty and not for liquidated damages. Neither side asked to go to the jury, and the question is whether .there is enough in the case to establish that the city has suffered damage to the amount of the $5,000 named in the bond, and for which a verdict was directed.

It was shown that the contract was for thirty-two weeks at the rate of $1,507.25 a week; that there was but one payment, and. that on July second.

_ The street cleaning commissioner testified to his unsuccessful efforts to find another contractor who would pay for the privilege of sorting and picking, and- that then he procured ope Maroni, who did the loading and trimming of the scows which Palladino was required to do under his contract, and that the city lost the difference between the two contracts, namely, the $1,507.25 a week. The defendant put in evidence the judgment roll in the Paoli case, from which it appeared that the total amount which the city had been able to obtain for the license, privilege or permit for the picking over of the refuse and appropriating the said materials, from July to February 4, 1909, covering thethirty-two weeks- of this contract, was $14,250, to which should be added Palladino’s payment of $1,507.25, making a total of $15,757.25. The total amount payable under the contract for thirty-two weeks -would have been $48,232; subtracting the payments as aforesaid would leave an actual loss of $32,474.75. If the Paoli judgment of $5,000 should also be subtracted there would remain a loss of. $27,474.75. "

These facts appearing from the judgment' roll put in evidence by the defendant, it is quite clear that the error of the court in treating the bond as one for liquidated damages resulted in no harm to the defendant, for the facts were before the court which showed that the damage sustained by the city far exceeded the amount of the penalty named. Under such circumstances the judgment ought not to be reversed for the technical error complained of.

The judgment and order should be affirmed, with costs to the respondent.

Ingraham, P. J., Laughlin, Scott and- Miller, JJ. ' concurred. 1 • \

Judgment and order affirmed, with costs.