Court Opinion

ID: 5182080
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:43:30.635467+00
Date Added: 2024-06-11T08:26:36.414086
License: Public Domain

Ingraham, J. (dissenting):
The action was brought to recover the amount due upon a contract, whereby the plaintiffs, as' sub-contractors, agreed “ to do and perform under the supervision and direction of the engineers and assistant engineers employed by the mayor, aldermen and commonalty of the city of New York, and in conformity with the plans and specifications referred to in said contract, all the pneumatic work (except as hereinafter specifically mentioned) described and called for under paragraphs 25, 32, 34 and 35 of the said original contract between the party of the first part and the mayor, aldermen and commonalty of the city of New York.” The complaint alleges four causes of action, and the answer alleges a counterclaim which presents substantially the question as to whether or not it was the duty of the plaintiffs or the defendant to cut the stone used and required under the contract over and above the old abutment stone which was found on the premises suitable for said use, the expense for the cutting of some of which is sought to be recovered in the third cause of action. It seems that three separate items allowed by the referee, aggregating $8,682.37, are not questioned by the defendant. There arc four items allowed by the referee to which the defendant objects, together with the disposition made by the referee of the defendant’s counterclaim. The first and principal item is the amount $37,079.97, and interest thereon which represents reserved payments.
This action seems to have been commenced on the 21st day of November, 1895, after the work done under the contract had been completed by the plaintiffs. By the contract it was provided “ payments to be made monthly, at the times and in accordance with the provisions of the said contract between the party of .the first part and the city of New York, excepting that the payment of percentage reserved shall be made on or before thirty days after the work embraced in this contract shall have been accepted by the chief engineer in charge of the said city contract.”
It is quite clear that, under this provision, to ascertain what was intended as to the time of payment for the work done, reference must be had to the provisions of the contract between the defendant and the city, under which the defendant had contracted to build a bridge, a portion of the construction of which the plaintiffs agreed to perform. This provision of itself would be meaningless except *374by reading into this contract the provisions made in the contract between the defendant and the city of New York as to the conditions of the payments to be made ky the city to the defendant. In fact, the whole of this contract is based npon the contract between the city and the defendant, the work that the plaintiffs were to do being that described in certain clauses of the city contract; and it was clearly contemplated by the parties that a reference to that contract would be necessary to determine just what the plaintiffs were required to do and the manner in which the work was to be done; and the liability of the defendant to the plaintiffs for such work was to depend upon the acceptance by the city of the work done by the plaintiffs as a portion of the work that the defendant under his contract was to do in the erection of the bridge. The making of the contract between the defendant and the city was expressly recited as the basis upon which this contract was made; and it was also recited that the plaintiffs had made a bid or offer to do a portion of that work which the defendant was to do under his contract with the city. Neither the work that the plaintiffs had to do, the time in which it was to be done, nor the time of the payment for the work done, could be ascertained, except upon a consideration of the terms of the contract between the defendant and the city. The rights and obligations of the parties, and whether or not the payment of this “ percentage reserved ” was due at the time of the commencement of this action, must, therefore, depend upon this clause of the contract between the plaintiffs and the defendant before recited, when read in connection with the clause of the contract between the city and the defendant, which provides for the payment by the city to the defendant of the consideration on account of such city contract. Thus, by the contract between the plaintiffs and the defendant, the payments were to be made monthly, “ at the times and in accordance with the provisions of the said contract between the party of the first part and the city of New York, excepting that the payment of percentage reserved shall be made on or before thirty days after the work embraced in this contract shall have been accepted by the chief engineer in charge of the said city contract.” The provision as to the payments under the city contract is found in clause Q of that contract, in which it is provided that: “ In order to enable the said contractor to prosecute the work advantageously, the engineer shall, from *375time to time, as the work progresses, but not oftener than once a month, make an estimate of the amount of work done under this contract since the last preceding estimate was made, and of the value thereof, according to the terms of this contract, lipón such estimate being made, eighty-five per cent of such estimated value shall be paid to the said party of the second part (the defendant).” Thus reading the two contracts together, it is clear that it was the intention of the parties that, upon said monthly estimate being made by the engineer, where the monthly estimate included any portion of the work done by the plaintiffs under this contract, eighty-five per cent of the contract price of such work was to be paid by the defendant to the plaintiffs. It is conceded, as I understand, that the city engineer has under these estimates included all of the work done under this contract, the plaintiffs thus being entitled to receive eighty-five per cent of the total contract price of the work done, and that there has been paid to the plaintiffs the total amount of such eighty-five per cent, except the sum of $8,269.75. In addition to that, it appears that the fifteen per cent of such monthly estimates under the contract, aggregating $37,079.47, is still unpaid by the defendant, and the question is presented as to whether or not that sum was due at the time of the commencement of the action. The clause in question in the contract between the city and the defendant further provides as to this fifteen per cent reserved payments, “ and whenever in the opinion of the said engineer the party of the second part (the defendant) shall have completely performed this contract on his part, the said engineer shall certify the same in writing to' the commissioner of public works, together with his estimate of the whole amount of materials furnished and work done in such performance by said party of the second part, and of the value of such work and materials under and according to the terms of this contract. Thereupon the parties of the first part (city of Hew York) will, on or before the expiration of thirty days after such completion and the delivery of said certificate, pay, and they hereby bind themselves and their successors to pay, to the said party of the second part in cash, the whole amount of any money accruing to the said party of the second part under this contract, excepting such sum or sums as shall have been paid to the said contractor under any of the foregoing provisions of this contract, * * * provided that nothing herein con*376tained be construed to affect the right hereby reserved of the said commissioner to reject the whole or any portion of the aforesaid work, should the said certificates or any of them be found or known to be inconsistent with the terms of this agreement or otherwise improperly given.” Clause S of the contract is as follows: “And it is hereby expressly agreed and understood by and between the parties hereto that the said parties of the first part, their successors and assigns, shall not, nor shall any department or officer of the city of New York, be precluded or estopped by any return or certificate made or given by any engineer, inspector or other officer, agent or appointee of said department of public works, or said parties of the first part, under or in pursuance of anything in this agreement contained, from at any time showing the true and correct amount and character of the work which shall have been done and materials which shall have been furnished by the said party of the second part, or any other person or persons under this agreement.” And by clause T it is provided: “ It is further expressly understood and agreed by and between the parties hereto that the action of the engineer by which the said contractor is to be bound and concluded according to the terms of this contract shall be that evidenced by his final certificate,all prior certificates upon which partial payments may be made being merely estimates and subject to the correction of such final certificates, which final certificates may be made without notice to the - contractor thereof, or of the measurements upon which the same is based.”
Reading these provisions of the city contract in connection with the contract, as to these reserved payments, between the plaintiffs and the defendant, we understand what was intended by the term “ percentage reserved,” that being the fifteen per cent of the contract price of the work done under the contract, which was not included in the monthly payments made by the city to the defendant, but was held by the city as reserved payments until the completion of the work and the granting of this final certificate under the contract. This fifteen per cent was not to be paid to the defendant until this final certificate was granted. By the express provisions of this contract the right of the city to determine whether or not any particular portion of the work was done in accordance with the contract was reserved until the final completion of the work. The determination by the *377city that said work was in accordance with the contract was to be evidenced only by the final certificate of the engineer in charge of the work. Thus, nothing that the defendant could do, nothing that any officer of the city could do, could estop the city authorities when the work was finally completed, and when the time came for the engineer in charge to determine whether or not the work as a whole was done in conformity with the contract, from showing at that time that any portion of the work provided for in the contract between the defendant and the city was not in accordance with the terms of the contract; and it cannot be disputed, I think, that when these plaintiffs undertook to do a' portion of -the work, provided for by this contract between the defendant and the city, they undertook to do it in accordance with the terms and conditions of that contract and to receive their compensation at the times and under the conditions upon which the city was to pay the defendant. We must then determine what tiie parties meant by the term “aecejited by the chief engineer in charge of the said city contract.” The dependence of these two contracts upon each other shows clearly, I think, that it must have been the intention of the parties that this acceptance by the engineer in charge of the city contract was the acceptance provided for by the contract itself, by which the city was to be bound.
Under the contract between the. defendant and the city the only acceptance by the chief engineer that was binding upon anybody was the acceptance by the giving of the final certificate. By the express provisions of the contract no return or certificate made by any engineer, inspector or other officer of either the department of public works or the city should preclude or estop the city from, at any time, showing the true and correct amount and character of work done and materials furnished by the contractor or any other person or persons under the contract. Thus, under this contract as it stood, no acceptance by the engineer until the final completion of the work would have bound the city. Nor, under the provisions of clause T, would any action of the engineer, at any time prior to the giving of his final certificate, he any evidence against the city as to the proper performance of any portion of the work done under the contract by either the original contractor, or any sub-contractor, or *378any other person whatever. It must have been contemplated, we think, between the parties, that an acceptance by the engineer was to be an acceptance binding upon somebody, and certainly not an acceptance evidenced merely by a conversation had with the engineer during the progress of the work.
The defendant is now in this position : Although the work which the plaintiffs agreed to do under their contract has been done, the city may at any time show that the work has not been done in accordance with the terms of the contract, and it may refuse to accept such work as a completion of the contract. As before stated, the whole contract between the parties hereto was in relation to a part of the work that the defendant was to do under his contract with the city. Reference to the main contract was made necessary to determine what the plaintiffs were to-do and when they were to be paid, and what was meant by monthly estimates and by reserve payments. It seems to ine- clear that we must also look to the contract between the defendant and the city to see what was meant by the acceptance by the chief engineer in charge of the said city contract, and that it was intended to. be an acceptance by which the city was to be bound—an acceptance on behalf of the city of the work that the plaintiffs did as a part of the defendant’s contract with the city, which would entitle the defendant to be paid by the city for that work as a part completion of his contract.
The form of this provision, excepting the payment of percentages reserved, bears out, it seems to me, this construction. The eighty-five per cent was to be paid monthly, in accordance with the provisions of the contract. The reserved payments were to be made on or before thirty days (the same time within which the final payment was to be made by the city to the defendant) after the work embraced in the contract had been accepted by the chief engineer. The fact that the payment of the percentages reserved was not to be made by the city monthly was the reason for the exception of their payment from the former provisions as to monthly payments to the plaintiffs. It might appear, at the end of the contract, when the work was completed, that the engineer of the work, while accepting the portion done by the plaintiffs, had rejected some other portion of the work done by the defendant. In such a case, where that was made clearly to appear, undoubtedly a failure to give a final certificate for the who! e *379work would not stand in the way of the plaintiffs recovering the reserved payment for the work that they had done, and which had then heen accepted by the engineer as a compliance with the contract. But until the engineer had either accepted the whole work by his certificates, or had, by his action, accepted the work that the plaintiffs had done as a part compliance with the contract, in such a way as to place the city in the position of being bound by such action of its officer, so that, it could not dispute its obligation to accept the work done by the plaintiffs as a part of the city contract, it seems to me clear that the time for the payment of this “percentage reserved ” had not arrived, and that the liability of the defendant to pay the amount thereof to the plaintiffs had not accrued.
I think, also, that there was no evidence to show that the city engineer had accepted the work in any way prior to the commencement of the action. A letter was introduced dated March 13,1896, in which he certified that the full amount of the work done on the piers in the bridge had been estimated and returned in the estimate made under the defendant’s contract with the city. That, of course, could have referred only to the provisional estimates upon which the eighty-five per cent payment was made. The statement at the bottom of the letter that the work was accepted by the chief engineer December 1, 1895, could only refer to an accejDtance under these provisional estimates, which, under the express provisions of the contract between the defendant and the city, were not to be binding upon the city when the final certificate was made. But this letter was a' mere declaration of the chief engineer’s, written after the commencement of the .suit, and if" it was of any value at all as evidence, it could only be used as evidence of an acceptance after the commencement of the action, viz., December 1,1895. The testimony of the chief engineer does not show that he has finally accepted this work as a compliance with the contract. Nothing in his testimony would estop or prevent him upon the completion of the work from showing that the work had not been done in accordance with the provisions of the contract. His evidence as to his acceptance of the work is extremely vague and unsatisfactory, and I think it falls far short of being evidence sufficient to justify a finding that he ever has definitely accepted the work as a compliance with the defendant’s contract.
*380It seems to me entirely clear that there is no evidence to justify a finding that the work done under this contract has ever been accepted by the engineer in charge of the said city contract.
It follows, therefore, that the plaintiffs were not entitled to recover the amount of such reserved payment and interest.
I agree with the referee as to the other items that he allowed.