#### Patrick J. Gleason, Plaintiff, *v.*William Dalton, as Commissioner of Water Supply of the City of New York, and the Citizens’ Water Co. of Newtown, Defendants.

(Supreme Court, Kings Special Term,

March, 1898.)

1. Municipal corporations — Spoliation of city funds — A contract . ... increasing the value of property to be taken by á city, —

*Semble,*that a. contract by which it is proposed that a city shall take water from a private corporation, for three years, at fixed prices, and shall then acquire its. franchise and plant is illegal, as the effect of the contract will be to enhance the value of the property- of the- corporation at the time when the city shall take it.

2. Same — When competitive bidding is impossible — Determination of' city official. "

Although a city charter; requires an expenditure, exceeding $1,000, to be made under a contract-let upon sealed bids made on ten days’ public notice, the rule does' not apply where there' is only one possible bidder; and the court- has power, at the ¡instance of a taxpayer, to inquire whether the city official, having the power to determine' whether there can be more than one possible bidder,- has made that determination and this, although the official is not charged with' fraud of breach of his official trust.

This is a taxpayer’s action for a perpetual injunction, to restrain -the defendant the Commissioner of Water Supply from malting a contract with the defendant water company for the supply of water to the city of ISTew York in-the borough of Queens without having first advertised ten days for bids. ' Motion for ,a- permanent injunction.

F. H. Van Vechtan, for plaintiff.

Sheehan & Collin, for defendant company.

A. F. Jenks, for defendant official.

Gaynor J.:

The contract which the Commissioner of Water Supply proposes to make for tire city with the defendant the Citizens’ Water Company, is for 3,000,000 gallons of;water a day, *19and as much more as the said Commissioner may see fit, for three years, at $65 a million gallons, for the territory in the borough of Queens which was formerly Long Island City. Thus is the city to pay $213,000 to the said private water company during the three years, and no one knows how much more.' The affidavit of the Ohief Engineer of the Department of Water Supply states the purpose' of the water officials to be to take water from the defendant water company for the term of the proposed contract, or longer, and then to acquire its franchise and plant for the city. And the proposed contract has in it a clause that the city may buy out the company at the expiration of the contract “ at a valuation to be determined at the time ¡of the sale.” Reduced to a plain statement, this all means that the franchise and plant of this private water company are needed and are to be acquired for the city by the water officials, but instead of so acquiring them now, and at their present value, the said officials are" first going to take water from the said company,, and pay it large sums therefor, for several years. By that means it is plain that the revenue of the said company is to be greatly enhanced, and its franchise made of great value, and then such franchise is to be acquired for the city and paid for at that value, instead of at its- present value. It is quite impossible to see why this should be done, when the city has unrestricted power to add to its own water plants, and issue bonds to pay therefor. The plaintiff presents 'an affidavit that the city’s own water plant in the said former territory of Long Island City could be made to produce an adequate supply by an expenditure of $150,000. This is controverted by the affidavits for the defendants. But without entering into that question it is not-perceived why the mains of the said territory should not be temporarily connected with the mains of the borough of Brooklyn during the few months that it would take for the city to acquire the franchise and plant of the said private water company at their present value, and issue bonds therefor. It is not asserted that the supply and static head of the Brooklyn water system are not ample for such a temporary use. To first enhance the value of such franchise, and then buy it, would be a plain spoliation of the funds of the city.

Although the complaint alleges the said price of $65 a million gallons to be excessive, and that there are two other companies which could bid, and that water can be got by competition- for less, it is very doubtful if the complaint is so drawn as to permit the court to grant relief upon the foregoing aspect of the case. The plaintiff seems to desire to put the stress of the case wholly upon *20the allegation that no valid contract may be made, except upon competitive bids after a public advertisement therefor of ten days, and to prevent the case from being decided upon the broader basis which concerns the whole community, instead of only a few water companies holding franchises from the community. No definite allegation of fraud or breach of official duty is made in. the complaint. The case must therefore be viewed in that aspect.

Section 419 of the'city charter requires that all work and supplies for a job or purpose which in its aggregate involves the expenditure of more than $1,000 shall be done and furnished under a contract founded on sealed bids submitted in.response to a notice of ten days by advertisement. This necessarily has reference only-to work or supplies which may be the subject of competition, and not to cases where the furnishing- of the- work or supplies cannot be made competitive (People v. Flagg, *17*N. Y. 584; Harlem Gas Light Co. v. Mayor, 33 N. Y. 309; Matter of Dugro, 50 N. Y. 513; Baird v. Mayor, 96 N. Y. 567). In the *Harlem Gas Light Co.*case, it was held that a contract for the lighting of the streets by gas was valid, though no bids had been advertised for, for the reason that there was only one gas company with a plant in the territory, and capable of making a genuine bid. To require a contract to be given upon advertisement for bids in such a case would be to put the city, to some extent, at the mercy of the one possible genuine bidder. The same rule applies to the present case, if- the defendant water company is the only one that can supply the water required, or any substantial part of it. Whether that is the case is a question of fact to be decided upon the trial.

No exercise of discretion by a public official can be interfered with or upset by the courts at the suit of- a taxpayer, except upon an allegation in the complaint, and a specific finding of fact thereon, that fraud or breach of official trust was committed therein (Talcott v. City of Buffalo, 125 N. Y. 280; Ziegler v. Chapin, 126 N. Y. 342; Chittenden v. Wurster, 152 N. Y. 345, and 153 N. Y. 664). The Commissioner of Water Supply has the power to determine whether there could be more than one bidder for the water required, if bids were advertised for, but he has no discretion in the premises. He has to determine according to |he fact, and the court has jurisdiction to enquire whether he has done so, without any allegation of fraud, or breach of official trust.

The motion for a permanent injunction is granted.

Motion granted.