Case Name: The People of the State of New York ex rel. William J. Rodgers, Respondent, v. Bird S. Coler, as Comptroller of the City of New York, Appellant
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1901-02-26
Citations: 166 N.Y. 1
Docket Number: 
Parties: The People of the State of New York ex rel. William J. Rodgers, Respondent, v. Bird S. Coler, as Comptroller of the City of New York, Appellant.
Judges: 
Reporter: New York Reports
Volume: 166
Pages: 1–44

Head Matter:
The People of the State of New York ex rel. William J. Rodgers, Respondent, v. Bird S. Coler, as Comptroller of the City of New York, Appellant.
1. Appeal — Discretionary Allowance of Mandamus. Where the court below has the power to grant a mandamus as a matter of discretion, its-action in allowing the writ is not reviewable by the Court of Appeals.
2. Constitutional Law — Non-compliance with Labor Law as to Prevailing Rate of Wages, no Defense to Mandamus to Compel Payment of Amount Due on Municipal Contract. A municipal contractor who has fully performed his contract for grading a public street and, as provided therein, has received from the proper authorities a certificate showing that the contract price agreed to he paid has been earned, may compel the city to pay the amount due by mandamus, although he has failed to comply with his stipulation required by the Labor Law (L. 1897, ch. 415, § 3, as amd. L. 1899, chs. 192, 567), that he will pay his workmen not less than the prevailing rate of wages in the locality, and u he fails to pay such rate the contract shall he void, since the Labor Law, so far as it relates to such a case, is unconstitutional: Mrst, because in its actual operation it permits and requires the expenditure of the money of the city or that of the local property owner for other than city purposes; second, because it invades rights of liberty and property in that it denies to the city and the contractor the right to agree with their employees upon the measure of their compensation, and compels them in all cases to pay an arbitrary and uniform rate which is expressed in vague language, difficult to define or ascertain and subject to constant change from artificial causes; third, because it virtually confiscates all property rights of the contractor under his contract for breach of his engagement to obey the statute, and it attempts to make acts and omissions penal which, in themselves, are innocent and harmless. It, in effect, imposes a penalty upon the exercise by the city or by the contractor of the right to agree with their employees upon the terms and conditions of the employment.
(Argued January 7, 1901;
decided February 26, 1901.)
3. Agreement that Contract Shall be Void eor Violation op Labor Law no Depense to Proceeding. The fact that the contractor stipulated that the contract should be void in the event of a violation of the Labor Law is no defense to the proceeding, since the obligation and the legal effect of a promise or engagement imported into a contract by force of a statute, whereby the contracting parties agree' to obey or execute some law, depends upon the validity of the law, and such a stipulation cannot survive the statute upon which it is founded, but falls with it.
People ex rel. Rodgers v. Coler, 56 App. Div. 98, affirmed.
Appeal from an order of the Appellate Division of the Supreme Court in the first judicial department, made December 14, 1900, reversing an order of Special Term denying the relator’s motion for a peremptoi'y .writ of mandamus commanding the comptroller to deliver to him a warrant on the chamberlain of the city of New York for the payment of $2,863, the amount earned by the relator under a contract with the city for regulating and grading One Hundred and Thirty-fifth street from Amsterdam avenue to the Boulevard, and granting relator’s motion for the writ.
The papers upon which the relator made the application show that on the 5th day of February, 1900, he made and entered into a contract with the city for regulating and grading that part of the street above described. The contract provided that in order to prevent disputes and litigation the chief engineer of highways should, in all cases, determine the amount and quantity of the several kinds of work which were to be paid for under the contract, and all questions in relation to his work and the construction thereof, and that his estimate and decision should be final and conclusive upon the contractor and a condition precedent to his right to receive any money under the contract. It is alleg.ed that the relator 2Droceeded to perform and carry out this contract and prior to the application had performed the same according to his promise and to the satisfaction of the commissioner; that subsequently the chief engineer in charge of the work and the commissioner of highways made their certificate in writing that there was earned under the contract, in accordance with the terms thereof, by the relator and then payable to him, the sum of $2,863.00. This certificate was filed in the office of the comptroller, who thereupon drew his warrant on the chamberlain for that sum, but refused to deliver the same to the relator, or, to make the payment under the contract. The refusal of the comptroller is based entirely upon the fact alleged that the relator in the performance of the contract violated certain provisions of the Labor Law (Chap. 415 of the Laws of 1897, as amended by chap. 192 and chap. .567 of the Laws of 1899).
The folio wing, are, in substance, the provisions of this statute so far as they have any relation to the present case:
1. The Avages to be paid for a legal day’s work, as herein-before defined, to all classes of such laborers, workmen or mechanics upon all such public Avork or upon any material to be used upon or in connection therewith shall not be less than the prevailing rate for a day’s work in the same trade or occupation in the locality Avithin the state where such public work on, about or in connection Avitli which such labor is performed in its final or completed form is to be situated, erected or used. Each said contract hereafter made shall contain a stipulation that each such laborer, workman or mechanic employed by such contractor, sub-contractor, or other person on, about or upon such public work shall receive such Avages herein provided for.
2. Each contract for public work hereafter made shall contain a provision that the same shall be void and of no effect unless the person or corporation making or performing the same shall comply with the provisions of this act, and no such person or corporation shall be entitled to receive any sum, nor shall any officer, agent or employee of the state or of a municipal corporation pay the same or authorize its payment from the funds under his charge or control to any such person or corporation for work done upon any contract which in its form or manner of performance violates the provisions of this section.
3. Any officer, agent or employee of this state, or of a municipal corporation therein, having a duty to act in the premises, who violates, evades or knowingly permits the violation or evasion of any of the provisions of this act, shall be guilty of malfeasance in office, and shall be suspended or removed by the authority having the power to appoint or remove such officer, agent or employee, otherwise by the governor. Any citizen of this state may maintain proceedings for the suspension or removal of such officer, agent or employee, or may maintain an action for the purpose of securing the cancellation or avoidance of any contract which, by its terms or manner of performance, violates this act, or for the purpose of preventing any officer, agent or employee of such municipal corporation from paying or authorizing the payment of any public money for work done thereupon.
The contract was framed in compliance with these provisions of the law and contains the following stipulation: “The wages to be paid for a legal day’s work, as hereinbefore defined, to all classes of such laborers, workmen or mechanics upon all such public work, or upon any material to' be used upon, or in connection therewith, shall not be less than the prevailing rate for a day’s work in the same trade or occupation in the locality within the state where such public work on, about or in connection with- which labor is performed in its final or completed form is to be situated, erected or used. It is further agreed that each such laborer, workman or mechanic employed by such contractor, sub-contractor or other person in, about or upon such public work shall receive the wages hereinafter set forth. It is further agreed that this contract shall be void and of no effect unless the person or corporation making or performing the same shall comply with the provisions of the Labor Law. * * "x" The contract is to be void and of no effect unless the rate of wages specified in section three of said Labor Law is paid, and where laborers are employed preference is to be given to citizens of the state of Hew York, as provided in section thirteen thereof.”
The contractor paid to the persons employed by him in execution of the contract wages fixed as to amount by mutual agreement, and it is conceded that he paid all that was demanded of him or that he agreed to pay. But since it was conceded that the contractor did not in all cases pay the prevailing rate, the court at Special Term held that the contract and the law were violated and that the relator was not entitled to the writ. The Appellate Division, by a divided court, reversed the order and granted the relator’s application, and from this order the corporation has appealed to this court.
John Whalen, Corporation Counsel (Theodore Connoly and Terence Farley of counsel), for appellant.
By the express provisions of section 3 of chapter 567 of the Laws of 1899 the defendant is prohibited from complying with the. relator’s demand. (The Marie Celeste, 2 Lowell [U. S.], 316.) The relator did not show clear legal right to a mandamus. (Matter of Freel, 148 N. Y. 165; People ex rel. v. Mayor, etc., 144 N. Y. 63; People ex rel. v. Coler, 34 App. Div. 167; People ex rel. v. Board of Aldermen, 18 Misc. Rep. 533; Matter of Sheehan v. Long Island City, 11 Misc. Rep. 487; Weston v. City of Syracuse, 158 N. Y. 274; Merrill on Mandamus, § 17; Spelling’s Extra. Relief, § 1375; High on Extra. Leg. Rem. § 339; Wood on Mandamus, 68; 14 Am. & Eng. Ency. of Law, 176; Ray v. Wilson, 14 L. R. A. 773.) The provisions of the Labor Law requiring contractors or municipal corporations to pay their laborers, workmen and mechanics the prevailing rate of wages is not unconstitutional. (Williams v. Eggleston, 170 U. S. 304; Matter of Protestant E. School, 46 N. Y. 181; People v. Phyfe, 136 N. Y. 554; Frederick v. Groshen, 30 Md. 436; Groff v. Frederick City, 44 Md. 67; State Bank v. Madison, 3 Ind. 43; Luehrman v. Shelby County Taxing Dist., 2 Lea, 425; Berlin v. Gorham, 34 N. H. 266.) The legislation in question can be sustained on the ground that the business of making and repairing public highways is affected with a public interest, and as such is subject to the regulations prescribed by the police power of the state. (Munn v. Illinois, 94 U. S. 113; Allnutt v. Inglis, 12 East, 527; People v. Budd, 117 N. Y. 1; Budd v. State, 143 U. S. 517; Beekman v. S. & S. R. R. Co., 3 Paige, 45; Chicago, B. & Q. R. Co. v. Iowa, 94 U. S. 155; B. E. S. R. R. Co. v. B. St. R. R. Co., 111 N. Y. 132; Perrine v. C. & D. C. Co., 50 U. S. 172; Freeholders v. State, 24 N. J. L. 718; Snell v. Chicago, 130 Ill. 413.) The Labor Law is not unconstitutional' because of the eight-hour provision. (People v. Phyfe, 136 N. Y. 554; State v. McNally, 48 La. Ann. 1450; Holden v. Hardy, 14 Utah, 71; 169 U. S. 366; Utah v. Holden, 14 Utah, 96; Short v. B. B. & C. M. Co., 57 Pac. Rep. 720; Matter of Dalton, 59 Pac. Rep. 336; Munn v. Illinois, 94 U. S. 123; Sinking Fund Cases, 99 U. S. 718; Cooley on Const. Lim. [6th ecL] 202; Westervelt v. Gregg, 12 N. Y. 209; Davidson v. New Orleans, 96 U. S. 102.) Whether the act in question be constitutional or not, .the relator is bound by the terms of his contract, and, having received its benefits, is estopped from claiming that it is illegal. (Mayor, etc., v. Sonneborn, 113 N. Y. 423; City of Buffalo v. Balcom, 134 N. Y. 532; B. G. L. Co. v. Claffy, 151 N. Y. 24; People ex rel. v. Beck, 10 Misc. Rep. 79; Bertholf v. O'Reilly, 74 N. Y. 517.) The relator has an adequate remedy at law. (People ex rel. v. Bd. Education, 60 Hun, 487; 148 N. Y. 766.)
L. Laflin Kellogg and Alfred C. Petté for respondent.
The provisions of the contract requiring the contractor to comply with the so-called “ Labor Law ” are illegal, and the statute requiring their insertion (Chap. 415 of the Laws of 1897 as amended) is unconstitutional and void. (Holden v. Hardy, 169 U. S. 366; Const. N. Y. art. 1, §§ 1, 6; Const. U. S. art. 14, § 1; People v. Fisher, 14 Wend. 10; Curran, v. Galen, 152 N. Y. 33; Butchers’ U. S. H. Co. v. Crescent City Co., 111 U. S. 746; Matter of Jacobs, 98 N. Y. 98; People v. Gillson, 109 N. Y. 389; Colon v. Lisk, 153 N. Y. 188; People v. Hawkins, 157 N. Y. 1.) The relator has not and could not waive his right to question the constitutionality of the statute by voluntarily entering into the contract contain ing the illegal provision that he would comply with the provisions of the “ Labor Law,” and that the contract should be void and of no effect unless the rate of wages specified was paid. (Cooley on Const. Lim. 335; Phelps v. Phelps, 72 Ill. 545; Recht v. Kelly, 82 Ill. 147; Branch v. Tomlinson, 77 N. C. 388; Kneettle v. Newcomb, 22 N. Y. 249; Hopt v. Utah, 110 U. S. 574; M. Nat. Bank v. Shinn, 163 M. Y. 360.) The relator, having received the certificate required by the contract, was entitled to a peremptory mandamus directing the delivery of a warrant by the comptroller and the payment of his claim. (Matter of Freel, 148 N. Y. 165; People ex rel. v. Mayor, etc., 144 N. Y. 63; People ex rel. v. Coler, 34 App. Div. 167; People ex rel. v. Board of Aldermen, 18 Misc. Rep. 533; Matter of Sheehan v. Long Island City, 11 Misc. Rep. 487; People ex rel. v. Coler, 26 Misc. Rep. 509; People ex rel. v. Board of Education, 158 N. Y. 125; People ex rel. v. Van Wyck, 157 N. Y. 495.)

Opinion:
O'Brien, J.
There is no dispute with respect to the facts upon which this controversy depends. They are all admitted upon the record and the appeal involves only questions of law. On the fifth day of February, 1900, the relator entered into a written contract with the proper administrative officer of the city of Mew York whereby he undertook to regulate and grade a street. The law required that the work should be done by contract. It was a local improvement, the expense of which was ultimately to be charged to and paid by the local property owners. The city was the authority or agency to inaugurate the work, but since it was for the benefit in whole or in part of private property the owners or their property became liable ultimately for the cost. That the relator actually performed the work embraced in the contract is not denied or disputed. The certificate of the officer in charge of the street was, by the terms of the contract, to be the evidence of performance, and that certificate was given and filed with the defendant, as comptroller, showing that the contract price stipulated to be paid had been earned, and the only ground upon which the defendant has based his refusal to pay is that the relator has not kept a certain stipulation in the contract, which has no relation whatever to the actual performance of. the work, but to matters entirely extraneous. In other w'ords, the comptroller asserts that, while the relator has actually performed the work and earned the compensation under the contract, he has forfeited the right to demand payment, since he has not observed the terms of the Labor Law. He contends that it is not enough that the relator has performed the work, according to the specifications of the contract, unless he performed it by the very means and agencies therein stipulated ; that the means and agencies prescribed by the contract were not mere matters of form but matters of substance. The duty enjoined upon the comptroller, the performance of which is commanded by the writ, was ministerial, and if the relator was not entitled to the writ absolutely and as matter of legal right, the court below had power to grant it in the exercise of discretion, and having granted it, the action of the court in that respect is not reviewable here. (People ex rel. Steinson v. Board of Education, 158 N. Y. 125; People ex rel. Jacobus v. Van Wyck, 157 N. Y. 495.) The court below had power to grant the writ, and haying the power, it is of no consequence, even if it be true as alleged, that the reasons given for its action are untenable.
It must be admitted that the attitude of the city authorities in this respect presents a curious and anomalous situation which involves some startling results. If they are right in the position taken, it must follow that the city must accept and receive the benefit of the improvements made by contractors to the extent of thousands or millions of dollars, and though conceding that the work is honestly done, precisely according to the specifications of the contract, yet it may refuse to ¡Day if it is able to show that the contractor has not, in the execution of the contract, paid to all the workmen employed by him what is called the prevailing rate of wages. The city may accept the work and the citizens may enjoy the benefit of it and treat the contract price as something for feited by the contractors for their benefit. It is obvious that the reasoning and argument that leads to such a result must be at some point inherently faulty. It is not possible that such injustice can be sanctioned by the courts of any state where the principles of the common law are recognized. The fact that certain provisions of the Labor Law were actually incorporated into the contract signed by the contractor cannot change or add anything to the strength of the position assumed by the city. The relator is not estopped by the agreement when there is no element of estoppel in the case, and the question is with respect to the validity of the statute and not the construction or effect of the contract in that regard. If the law is valid it governs the contract and the rights of the parties whether actually incorporated into the writing or not, since all contracts are assumed to be made with a view to existing laws on the subject. If it is not valid the contractor has not made it so by stipulating in writing to obey it and prescribing the penalty for his own disobedience which is the forfeiture of all rights under the agreement. It is not in the power of the legislature to protect an invalid law from judicial scrutiny by providing that it must receive the assent of the parties to every contract to which it relates. The argument that the relator is bound by his voluntary assent to the terms of the contract would apply with equal force to the city and estop it from raising th.e question now before us, since by the certificate of its own officers that the amount claimed is justly due to the relator, according to the terms of the -contract, the question of performance is deemed to be' settled. The parties stipulated that this certificate should be final and conclusive, and it is not impeached for fraud or invalidity. Courts in such cases are not bound by mere forms, but must look at the substance of things, and so viewing this transaction it would he idle to attempt to deceive ourselves with the idea that the question involved in this appeal arises out of the stipulations of the parties to the contract or is governed by them, rather than the provisions of a statute. The contract is in the form that we find it, not because the parties so elected to contract, but for the reason that the statute would not permit them to contract in any other way.
Hor is it entirely true that the statute is a mere direction by the sovereign authority to one of its own agencies to contract in certain cases in a particular way. It is all that no doubt and very much more,- since it affects personal and municipal rights in many directions that are of vastly more importance than the mere form of a contract to perform municipal work. It is true enough that a city is an agency of the state to discharge some of the functions of government, but these terms do not adequately describe its true relations to the state or the people.
A municipal officer directing a local improvement is not the agent of the state. He is the agent of the city and the city alone is responsible for his negligence or misconduct. If the authorities in charge of the streets of a city are agents of the state, the city ought not to be held liable for their acts or omissions. The city of Hew York exists under charters and laws as old as the state itself, and while the legislature is clothed with extensive powers with respect to the administration of local government, there are some things beyond its power. The legislature cannot authorize or compel a city to give any of its money or property, or to loan its credit for any private purpose, nor to expend any of its money, directly or indirectly, for any other than city purposes. If the legislature should by statute require a city to enter into contracts whicli directly or indirectly secure benefits to private individuals, or particular classes of citizens, and not for purely city purposes, the statute would be void as in conflict with the spirit, if not the letter, of the Constitution. All expenditures of money must be for city purposes and that alone, except so far as it is authorized to devote funds to the relief of the poor or to charity, which may be said to be a city purpose in the largest sense. A statute which tends to divert the money or property of the city, or that of the local property owners, from strictly city purposes and devotes it directly or indirectly to private interests, or to tlie interests of some class of persons as distinguished from the whole body, whether the transaction is made to assume the form of payments of wages or something else, is in conflict with the spirit and policy of these provisions of the Constitution. (People ex rel. D., W. & P. R. R. Co. v. Batchellor, 53 N. Y. 128; People ex rel. Bolton v. Albertson, 55 N. Y. 50.) The legislature does not possess unrestricted power to bind a city hand and foot with respect to all its local business affairs. It cannot fix by statute the price which it must pay for materials or property that it may need, or the compensation that it must pay for labor or other services that it may be obliged to employ, at least when such regulations increase the cost beyond that which it would be obliged to pay in the ordinary course of business. If it could do all these things it could virtually dispose of all the revenues of the city for such purposes as it thought best, and local self-government would be nothing but a sham and a delusion. The constitutional restrictions upon cities with respect to the expenditure of money are of no avail if the legislature can by mandatory laws compel the . officers or the governing body to frame contracts in the interest or for the benefit of individuals or classes.
The city is a corporation possessing all the powers of corporations generally and cannot be deprived of its property without its consent or due process of law any more than a private corporation can, and since its revenues must be used for municipal purposes, it is difficult to see how the legislature can make contracts for it whicli involve the expenditure of these revenues without its consent. Counsel upon both sides of this controversy assert, and it seems to be undisputed, that there are now pending against the city in consequence of alleged violations of the statute in question, claims aggregating over six million dollars, representing the difference in the amount actually paid by the city to its employees, and accepted by them under contracts voluntarily made, and what is assumed to be the prevailing rate of wages under the statute. If it be assumed that the statute requires the city to pay this vast sum in addition to what it paid under its contract with these employees, and which the latter freely accepted, it would be very difficult, if not impossible, to show that such payment is for a city purpose, and thus the municipality is compelled by the statute to violate the Constitution. This situation would seem to prove that either the statute or the Constitution must be disregarded. To the extent of the sum which the city pays under this statute in excess of that which it actually paid for the work under contracts fairly made in the ordinary course of business, the provision of the Constitution limiting expenditures of money to city purposes is violated. These limitations upon the payment of money: by cities apply as well to the power of the legislature. What the city is by the Constitution forbidden to do, it is not competent for the legislature to authorize or command, either directly'or indirectly, and the vice of the statute in question is to be found in the fact that it provides or may provide for a gratuity to some one, or perhaps more properly to some class of citizens.
The city exists under its ancient charters as modified or enlarged by modern enactments for the purpose of local self-government. While the rights and powers so conferred upon the city are subject to change or modification by the supreme power of the state they cannot be wholly destroyed. It is not true that the internal affairs of cities in this state are absolutely subject to the will of the legislature. The Constitution recognizes their existence as political and corporate bodies and has imposed various restrictions upon the powers of the legislature to interfere in matters of local government. It is without power to appoint city officers, though it may provide for their election by the local electors, or their appointment by some local authority. It cannot dispose of the property of the municipality, nor disburse its revenues, however acquired, for any purpose not' joertaining to local administration or local government.
The recent amendment to the Constitution, which confers upon the mayor in the larger cities and the mayor and govern ing body in the others tire right to interpose what may be called a qualified veto upon acts of the state legislature relating to their local affairs, plainly implies that cities possess a certain kind of political autonomy which, however limited, the legislature may not invade or destroy at pleasure. (1 Dillon- on Munic. Corp. § 71-74.) It may regulate but cannot destroy powers recognized by the Constitution, as inherent ,in the cities of the state. The plain purpose and effect of the law in question was to deprive the city and its contractors of the exercise of all judgment and discretion in the matter of wages to be paid to workmen employed upon all public works. Both the city and the contractor are deprived by the statute of all power to deal with that question, and, consequently, of all power to protect most vital interests in that regard by contract or otherwise. The right which is conceded to every private individual and every private corporation in the state to make their own contracts and their own bargains is denied to cities and to contractors for city work ; and, moreover, if the latter attempt to assert such right the money earned on the contract is declared to be forfeited to the city without the intervention of any legal process or judicial decree. The exercise of such a power is inconsistent with the principles of civil liberty, the preservation and enforcement of which was the main purpose in view when the Constitution was enacted. If the legislature has power to deprive cities and their contractors of the right to agree with their workmen upon rates of compensation, why has it not the same power with respect to all private persons and all private corporations? That question can be answered in the language which this court used when a case with features somewhat similar was under consideration : " Such legislation may invade one class of rights to-day and another to-morrow, and if it can be sanctioned under the Constitution, while far removed in time we will not be far away in practical statesmanship from those ages when governmental prefects supervised the building of houses, the rearing of cattle, the sowing of seed and the reaping of grain, and governmental ordinances regulated the movements and labor of artisans, the rate of wages, the price of food, the diet and clothing of the people, and a large range of other affairs long since in all civilized lands regarded as outside of governmental functions." (In re Jacobs, 98 N. Y. 98.) It was once "a political maxim that the government governs best which governs the least. It is possi- : ble that we have now outgrown it, but it was an idea that was always present to the minds of the men who framed the Oon1 stitution, and it is proper for courts to bear it in mind when expounding that instrument. The power to deprive master and servant of the right to agree upon the rate of wages which the latter was to receive is one of the things which can be regarded as impliedly prohibited by the f undamental law upon consideration of its whole scope and, purpose as well as the restrictions and guaranties expressed. If the city is not permitted to enter into fair contracts with its employees for their services, on such terms as private individuals or ¡irivate corporations may, it is disabled from performing the duties enjoined upon it by law or from obeying the restrictions of the Constitution. Even the ordinary employees in the civil service of the city are protected by the Constitution from the exercise of absolute power by the legislature. Appointments and promotions in such service must be made with reference to merit and fitness to be ascertained when practicable by competitive examinations. The legislature has no power to enact permissive or mandatory laws in conflict with that principle. These illustrations, and others which might be given, prove thac the proposition that cities and their internal affairs are subjected to the absolute will of the legislature, and that it has the power to command the municipality to do this or that as it may think best is very far from correct. There are many express limitations upon its power and others are to be implied from the very nature of the right of local self-government conferred by the fundamental law. The legislature cannot appoint an officer to make the contracts of a city, and what it cannot do through its own appointee it cannot do by direct action. In this case the legislature made the contract for the city at least so far as it relates to the employment of workmen and their wages. The prevailing rate of wages must be from its very nature a question of fact, governed by conditions and circumstances over which the contractor has no control. The legislature cannot compel him to decide that question at his peril by depriving him of the right to set it at rest by agreement with his employees.
But the statute also invades private rights in various other directions. The local property owners, who are the parties that in the end must bear the expense of the improvement, are entitled to the benefit of the best judgment and discretion of the city officers in making the contract for the work. To the extent that such judgment and discretion is taken away by arbitrary enactments not in their interest, but in favor of opposing- interests, their constitutional rights of liberty and property are invaded. When the expense of the improvement is enlarged beyond actual and reasonable cost, under ordinary business conditions, as it may be under the statute in 'question, their property is taken without due process of law. (The contractor is a private individual engaged in private business. When he enters into a fair and honest contract for some municipal improvement, that contract is property entitled to the same protection as any other property. It is not competent for the legislature to deprive him of the benefit of this contract by imposing burdensome conditions with respect to the means of performance, or to regulate the rate of wages which he shall pay to his workmen, or to withhold the contract price when such conditions are not complied with in the judgment of the city. When he is not left free to select his own workmen upon such terms as he and they can fairly agree upon, he is deprived of that liberty of action and right to accumulate property embraced within the guaranties of the Constitution, since his" right to the free use of all his faculties in the pursuit of an honest vocation is so far. abridged.^ A statute which enables a city that has entered into a contract with him for the performance of some public work to receive and accept the fruits of his labor and at the same time refuse to pay for it upon the ground that he omitted to pay the prevailing rate of wages to his workmen, though he paid all they asked and all he agreed to pay, would seem to be an arbitrary interference with his liberty and property, and not within the legitimate sphere of legislation.^ It is not claimed that the statute has any relation to the public health, the public morals, the public safety, or any of the other objects within the scope of the police power, and it is a somewhat remarkable fact that the learned counsel, who has argued in support of this appeal and of this statute, has not attempted to state the purpose for which it was enacted, but leaves that point wholly to conjecture.
It is impossible to see how such legislation could promote the true interests of the city or that'of the local taxpayer, and not difficult to see how in its actual operation' it would tend to increase the cost of every local improvement. Indeed, it is conceded ón all sides that such has been the effect of the law upon the expense of public improvements in the city of R ew Tork. The very ground upon which the city refused to pay was that the contractor did not pay enough for the labor performed. If the claims referred to, aggregating over six millions of dollars, must be ¡laid, then it is plain that this law will cost the city that sum without any additional or corresponding benefit. The funds necessary to ¡Day these claims would Jfjnvolve the expenditure of money for other than city purposes. ^It was supposed^ no doubt, that the law would benefit wage earners, but it is not clear how it can if we consider that class of citizens as a body.' A law that restricts freedom of contract on the part of both the master and servant cannot in the end operate to the benefit of either. Thajaw forbids the contractor from paying a rate of wages other than what is ~called the prevailing rate 'although the laborer is willing to accept it. It calls for the payment, practically, on all occa- ; sions of the highest market price, and, hence, must' compel the contractor to employ only such workmen as are competent i to earn the very highest rate of compensation. It makes no ^ allowance for the various degrees of efficiency,and capacity that must always exist in so large a part of the community. A person less competent than his neighbor from whatever cause cannot be employed because a uniform rate must be paid without taking into account the varying conditions of life and the degrees of capacity. Such a law may indeed benefit for a time the favored few who possess the largest capacity to earn the largest wages, and in this view it may be said that it provides only for the survival of the fittest. But the effect of the law must be that all those who are too young or too old, or for any other reason less competent than their neighbors, must be deprived of all opportunity to secure employment on all public works in their respective callings, and so the tendency of such legislation is to check individual exertion and to suppress industrial freedom. The contractor is not only deprived of the right to make such contracts with his workmen as would be mutually acceptable and beneficial, but he is required in selecting his employees to give preference to citizens of this state. Citizens of other states and resident aliens are thus subjected to harsh' discrimination. The citizens of each state are entitled to all privileges and immunities of citizens in the several states under the Federal Constitution, and persons still unnaturalized are protected by the broad principles of international law. It is not necessary to inquire how far, if at all, the rights of citizens of other states seeking employment here, or those of aliens who have come here to improve their condition and to,earn an honest living, are ignored or restricted by this statute. These questions have not been raised or argued, and we will only remark that it- reverses' the settled policy of this state from the earliest times. The policy of Hew York has always been to welcome not only the citizens of our sister states, but emigrants from abroad to equal participation in all the opportunities and advantages of its business and industrial life. If the policy indicated in the statute now under consideration had been formulated and carried into operation half a century earlier, it may be that the growth and progress of the state would not be the subject of so much pride or as gratifying to all the people as it is now. These conclusions result from principles that have been often stated by this court when paternal legislation of the same character was under consideration. (In re Jacobs, 98 N. Y. 98; People v. Marx, 99 N. Y. 378; People v. Gillson, 109 N. Y. 389; Colon v. Lisk, 153 N. Y. 188; People v. Hawkins, 157 N. Y. 1; People ex rel. Tyroler v. Warden, etc., 157 N. Y. 116.) Numerous other cases might be cited from other jurisdictions that tend to support the views expressed. They are referred to and quoted in the briefs of counsel and it is unnecessary to comment upon them generally.
These cases, however, 'deal with a great variety of statutes in' line with th'e one involved in the case at bar. They constitute a valuable contribution to the law with respect to the scope and limits of legislative power. In all of them statutes differing in no essential principle from that now under consideration were held void as in conflict with constitutional restrictions, express or implied. The prominent feature in the discussions is that the legislation is condemned as an infringement upon the right of employer and employee to enter into contracts in their own way, and in some of them it was said that such legislation was an insulting attempt to put the laborer under legislative tutelage which was not only degrading' to his manhood, but subversive of his rights as. a citizen. The statutes considered all profess to be for the purpose of securing to the wage earner his rights, but it was shown that they were really subversive of them. The following are a few of the laws thus considered and condemned, and it will be seen that they were all in line with the enactment in question: An act forbidding employers from withholding wages from employees engaged in weaving for imperfections in the work. (Com. v. Perry, 155 Mass. 117.) An act to secure operators in coal mines and certain manufactories the payment of their wages at regular intervals and in lawful money. (Godcharles v. Wigeman, 113 Pa. St. 431; State v. Goodwill, 33 W. Va. 179; State v. Fire Creek C. & C. Co., Id. 188.) An act relating to the payment of wages to miners employed upon the basis of the quantity of coal mined. (Ramsey v. People, 142 Ill. 380.) ,An ant, to provide for payment of wages in money and nroliibit the system of truck stores and to prevent deductions trom wages except for money advanced(Frorer v. People, 141 Ill. 171.) An act to provide for weekly payment of wages by corporations. (147 111. 66.) An act declaring it unlawful for persons engaged in mining to pay wages otherwise than in money. (State v. Loomis, 115 Mo. 307.) A city ordinance enacting that laborers should receive not less than $1.50 per dáy, and that the day should not exceed eight hours. (State ex rel. Bramley v. Norton, 5 Ohio N. P. R. 183.) The case last cited is not distinguishable from the one at bar. Indeed, it involves the very question, and while it is not a decision of the highest court of the state, it is based upon the authority and the doctrines of the other cases cited and upon reasoning that seems to be unanswerable. The case at bar differs from these cases, cited from the highest courts of other states, only in the circumstance that here the legislature has made use of municipal corporations to accomplish the purposes which were there condemned. But it must be obvious that what the legislature cannot do directly it cannot do indirectly. It cannot make use of its powers over municipal corporations to subvert rights of liberty and property guaranteed by the Constitution.
Thq compulsory authority of the legislature over municipal corporations in regard to matters of general concern and duties which the people of the several localities owe to the state at large is not questioned. Legislative control in matters political and governmental is complete. But while such corporations are made use of in state governments, and in that character subject to state control, they have other objects and purposes peculiarly local, in which the state at large, except in conferring the power and regulating its exercise, is legally no more concerned than it is in the individual and private concerns of its several citizens, and it is from the standpoint not of state interest but of local interest that the necessity of incorporating cities and villages most distinctly appears. With respect to property and contract rights of exclusively local concern, the state has no right to interfere and control by compulsory legislation the action of municipal corporations. The people of the state at large, through their representatives, have no more authority to dictate to a city the form in which its contracts shall be framed or the wages that it shall pay to laborers than they have to dictate to an individual what he shall' eat, drink or wear. A municipal corporation, in matters affecting its property and its private contract rights, enjoys practically the same immunity from legislative interference for the benefit of private corporations or individuals as is accorded to business corporations and private citizens. (People ex rel. Park Comrs. v. Detroit, 28 Mich. 228; Loan Assn. v. Topeka, 87 U. S. [20 Wall.] 655; People ex rel. D., W. & P. R. R. Co. v. Batchellor, supra; Weismer v. Village of Douglas, 64 N. Y. 91; Board of Education v. Blodgett, 155 Ill. 441.)
The case of Clark v. State (142 N. Y. 101), cited by the learned corporation counsel, is not in conflict with the views herein expressed. All that this case decided- was that the state had power to-declare by statute the compensation to be paid to its own employees in the absence of any agreement providing for a different rate. But the right to make contracts for the compensation to be paid, whether greater or less than the statutory rate, is expressly recognized and conceded throughout the opipion, and it is obvious that under the Constitution that right could not be abrogated, since the power to employ labor is conferred by that instrument upon the superintendent of public works. The power to employ implies the power to agree upon the' compensation, and while the statute was applied to cases where no such agreement was made, it could not deprive the superintendent of the power conferred upon him by the Constitution. (People ex rel. Killeen v. Angle, 109 N. Y. 564.) The statute which was under consideration in that case did not attempt to interfere with the right to make contracts;
In the brief time that we have been able' to devote to an examination of this case, it would not be practicable to con sider all the special features of the law and to determine the parts that are good and those that are objectionable. It will be sufficient for all purposes of this case to say that, in so far as the statute is invoked to shield the city from the obligation to pay the relator the money due to him, it is not a valid defense, for the reason that some of its most material provisions are in conflict with the Constitution.
1. Because in its actual operation it permits and requires the expenditure of the money of the city or that of the local property owner for other than city purposes.
2. Because it invades rights of liberty and property in that l it denies to the city and the contractor tlie right to agree with their employees upon the measure of their compensation, and/j compels them in all cases to pay an arbitrary and uniform rate T] which is expressed in vague language, difficult to define or ascertain and subject to constant change from artificial causes.
3. Because it virtually confiscates all property rights of the contractor under his contract for breach of his engagement to obey the statute, and it attempts to make acts and omissions penal, which, in themselves, are innocent and harmless. It, in effect, imposes a penalty upon the exercise by the city or by the contractor of the right to agree with their employees upon the terms and conditions of the employment.
.We have already seen that it is no answer to the relator's claim to be paid what is justly due to him to say that he has consented in the contract that it should be forfeited to the city in the event of'a violation of the Labor Law. The question does not originate in any agreement voluntarily made, but arises out of the statute, and the validity or invalidity of that enactment is the fundamental question. Neither the city nor the contractor had any interest in these stipulations. They are in the contract only by force of the mandate of the statute, and, unless the legislature had power to frame the contract in that respect, their presence is of no consequence. The city could not maintain any action for damages for violation of these stipulations by the contractor, for the plain reason that it was impossible for it to sustain any damages under the cir cumstances. Those provisions are "a part of the contract in form only, since they lack the one most essential element of every contract, namely, the consent of the parties. The obligations and legal effect of a promise or engagement-imported into a contract by force of a statute, as in this case, whereby the contracting parties agree to obey or execute some law, depend entirely upon the validity of the law. Every person is bound to obey the law irrespective of any express agreement on his part to that effect, but he does not incur any liability or penalty for breach of an agreement to obey a void law. Such a promise or agreement cannot survive the statute upon which it is founded, but must fall with it, since it can have no independent existence arising from the consent of the parties or the meeting of minds. No one would claim that the terms of the contract precluded the relator from the recovery of what is due to him for the work'but for the law which is behind it. The effect of this statute was to make the city a trustee or instrument for the enforcement of the law in the interests of the persons for whose benefit it was enacted, and thus the powers and functions of the municipality are employed for purposes foreign to those for which they were created and exist under the Constitution.
The order of the Appellate Division should be affirmed, with costs.