Court Opinion

ID: 3578600
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:30:11.684894+00
Date Added: 2024-06-11T13:46:42.383470
License: Public Domain

This proceeding was instituted for the purpose of reducing an assessment for the expense of regulating and grading a portion of Fourth avenue, in the city of New York. The petitioner bases his right to relief under section 12, chapter 550, Laws of 1880, on the ground of fraud or substantial error in the proceedings which resulted in the assessment.
Under the Laws of 1873, chapter 335, section 91, all contracts for work to be done in the city of New York, which involved an expenditure of more than $1,000, were to be let to the lowest bidder, under such regulations as should be established by ordinance of the common council; and it was established by ordinances that the commissioner of public works should issue proposals and advertise for bids for all contracts exceeding $1,000, connected with his department; that whenever a survey or plans should be necessary for any work duly authorized, he should cause such survey or plans to be made by a competent surveyor, architect or engineer, as the nature of the work might require; that the several departments and officers employed by law to make contracts on the part of the corporation should issue proposals for estimates therefor, and advertise the same as required by law; and that such advertisement should state the quantity and quality of supplies, or the nature and extent, as near as possible, of the work required.
The following estimates of the work to be done was contained in the proposals submitted to the bidders for the work in question: 10,000 cubic yards of earth excavation; 20,000 cubic yards of rock excavation. There were twenty-six bids for the work, and the contract was awarded to one Kane as the lowest bidder. He bid for earth excavation $1.62½ per yard, and for rock excavation two cents per yard; and applying these bids to the estimated amounts of excavation, he was the lowest of all the bidders — the aggregate of his bid being $17,100, and the other bids ranging from $19,300, the next lowest bid, to $58,500, the highest. Kane performed the work under the contract, and there was found to be 20,576 *Page 558 
cubic yards of earth excavation and 9,241 cubic yards of rock excavation, and it turned out that, instead of being the lowest bidder, he was the highest but one; and he was paid for the work the aggregate sum of $33,620, nearly twice as much as the amount of his aggregate bid. There was proof at the hearing that the full and fair value for the rock excavation was $1.70 per cubic yard, and for earth excavation, thirty cents per cubic yard, and that those prices would allow from twenty-five to thirty per cent clear profit to the contractor. Thus it appears that there was actually paid, in excess of a fair value for the work done by Kane, the sum of nearly $12,000.
We think there was substantial error in letting this contract to Kane, who was, in fact, nearly the highest instead of the lowest bidder for the work. No tests whatever were made before letting the work to ascertain the quantities of rock and earth, respectively, to be excavated, and no appropriation of money or other provision was made for making such tests. The quantities of rock and earth respectively, as stated in the advertisement, were mere estimates or random guesses without any basis whatever to rest upon; and the ordinance which required the quantity of each kind of material and its nature to be stated, as near as possible, was in no sense complied with, and therefore there was no basis for a valid contract. The case would be different if abona fide effort had been made to comply with the ordinance, and there had been a mistake or error as to the quantities of different kinds of materials to be excavated.
We are also of opinion that upon the facts of the case it is a just inference that the contract was the result of fraud and collusion. Fraud is suggested by the careless and reckless way in which the estimates were made, without any adequate test or examination to ascertain the quantity or character of the different kinds of materials. An estimate of the quantity of rock at more than double the actual quantity, and the amount of earth at less than half the actual quantity, taken in connection with Kane's extraordinary unbalanced bid, could *Page 559 
hardly have been the result of accident. The bid on its face is suggestive of fraud. The officers of the city, when they saw in the bid two cents per cubic yard for rock excavation, and $1.62½ for earth excavation, ought to have known, and must have known if they read it, that some fraud was contemplated; and it may be inferred that when the contract was let there was actual fraud and collusion between the bidder and the representatives of the city, as the city could not have been compelled to enter into contract upon such a bid. It is not needful, however, for us to find that there was actual fraud, but it is sufficient that all the facts of the case were such as justified an inference of fraud in the court below.
The case of Protestant Episcopal Public School (75 N.Y. 324) is not an authority for the city in this case. We do not hold that every unbalanced bid is per se fraudulent, or evidence of substantial error. An unbalanced bid that does not materially enhance the aggregate cost of the work cannot be complained of. If there is no deception or mistake as to the quantities, and if the ordinances have fairly been complied with, and the quantity and quality of the work has been estimated as nearly as practical, there is no ground for alleging substantial error merely because of an unbalanced bid under which the contract was let. And if the cost of the work has not thereby been enhanced, there is no ground for alleging fraud. In the case cited it had been determined that the contract was free from fraud. The case of Brady v. Mayor, etc. (20 N.Y. 312) is not a precise authority for the petitioner, but the grounds of the decision are sufficient to sustain his contention.
The petitioner has a strong equity for the reduction of this assessment. He has had no benefit whatever from the excessive amount paid to the contractor, and there is no reason why that amount should fall upon him or his lots. The city, in making street improvements, the expense of which is to be charged to the owners of property in the vicinity of the improvements, acts in some sense as the agent of such owners in making the improvements (Lake v. Trustees of Williamsburgh, 4 Denio, 520), and it should, in the discharge of its *Page 560 
assumed agency, be required to exercise reasonable care and diligence in connection with the work. If, by gross negligence on the part of the city or the fraud of its officers, the expense of the work has been largely and unnecessarily increased, it is certainly unjust that the consequences of the wrong should be visited wholly upon the owners of the property in the vicinity of the improvement. It is just in a case like this that the excessive and unnecessary expense should be borne by the whole body of taxpayers of the city instead of being cast upon a few lot owners.
We are, therefore, of opinion that the order should be affirmed, with costs.