Court Opinion

ID: 5196379
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:43:53.842907+00
Date Added: 2024-06-11T08:27:05.932438
License: Public Domain

Patterson, J. (dissenting):
This action was. brought to foreclose a mechanic’s lien'filed by the plaintiff against the- city of New'York; William’IT. Masterson, a contractor with the city; Thbmas.J. Dunn , and John H. Deeves, sureties upon a bond given under the statute to remove the lien and as security to the plaintiff for its claim. After the trial, judgment was entered upon a decision of .the court dismissing the complaint, canceling the lien and directing judgment in favor of the defendant William H. Masterson against the plaintiff upon a counterclaim. [It was stipulated on the trial that no liability rests, upon the city of New York, and consequently that defendant has no further interest, in the litigation.' The contest is, therefore, between the plaintiff and the other defendants. The contract between Master-son and the city was for the furnishing, delivering and laying of a *281large quantity of forty-eight-inch cast iron pipe for a double pipe line to be laid between “ the Milburn engine house and the Milburn efflux chamber, and for the single pipe line from that point to the gate chamber at Spring Creek,” and for “ the furnishing and setting of the necessary check valves and stop cocks,” pursuant to specifications annexed to the contract, which contract provided that “ each pipe, while under the required pressure shall be rapped with a hand hammer f^om end to end to discover whether any defects have been overlooked. Any pipe or special casting which fails under this test shall be rejected. This inspection and test shall be made at the foundry under the direction of the Inspector and at the expense and risk of the Contractor.” ■ It also provided that a final inspection should be made after delivery of the articles on the line of the work. On December 24,1900, Masterson entered into a contract in writing with the plaintiff, through its agents, Messrs. R. D. Wood & Co., in which the contract with the city of New York is referred to, and in which it is provided that the plaintiff should furnish to Masterson one-third of the cast iron pipes and one-half of the special castings; “ all of the said pipes and special castings are to be made in accordance with the specifications and plans of the Department of Water Supply, New York City, and are to be delivered by not later than the first day of July, A. D. Nineteen hundred and two.” The contract with the plaintiff was subsequently modified on February 5, 1901, and by the modification the plaintiff agreed to furnish one-lialf, instead of one-third, of the cast iron pipes. Deliveries were made by the plaintiff to Masterson of some of the materials embraced in the contract between those parties, and it is alleged in the complaint that the value of such materials so furnished was $83,893.17, upon which a payment of $67,666.01 had been made, leaving an amount due and owing by Masterson to the plaintiff of $16,227.16. It was found by the trial-court that the amount due to the ¡fiaintiff under the contract for pipe and castings, which it would have been entitled to receive had it not been guilty of a breach of its contract, was the sum claimed by the plaintiff,' and it was also found that the plaintiff had been paid on account the amount admitted. As against the claim of the plaintiff for the balance, the defendant Masterson set up in his answer a counterclaim, in which, among other things, it was alleged that the plaintiff was guilty of a breach of its con*282tract and that it had' failed to perform and carry out the same; that it did not deliver pipe andi castings as the contract required, and had failed and refused to carry' out the terms and cbnditions of the contract on its part to be performed. The defendants Dunn and Deeves in their answer set' up as separate defenses the breach of ■ the'cori tract as alleged in the answer of the defendant.Masterson. The plaintiff in its reply admitted that the cast iron pipe-and special' castings mentioned in the counterclaim were to -be furnished and delivered to the defendant as mentioned in. the' specifications of Masterson’s contract with the city, but it did ’not admit that it agreed- to deliver the pipe' within the time mentioned' in the answer. Respecting the substance of the counterclaim, the plaintiff alleged that rió inspectors were furnished to it before the middle of February, 1901, and that the inspection of the pipe and special castings manufactured by it was then and thereafter so unfair, unreasonable and improper that much of the pipe and castings manufactured Jby \ ■it was rejected, although they fully conformed to the specifications contained in the defendant’s contract with the city. As another defense to the counterclaim the plaintiff admitted that,. though it- did on or about the 16th of September, 1901, refuse to continue manufacturing until a reasonable inspection was given its work, still it was ready immediately to deliver pipe and special castings winch had been unreasonably rejected and which conformed to the specifications contained in the defendant’s contract with the > city of New York, arid that it subsequently continued to manufac- • ture and deliver, and the defendant continued to accept, pipe and ' special castings from it until on or about December 30, 1901, when the defendant Masterson refused to accept the pipe already delivered at-Valley Stream and pipe actually in transit, and notified the plaintiffs that he would make a contract with other parties for the pipe yet to be delivered.
That the plaintiff did not deliver pipe to Masterson in accordance with the terms of its contract is-clear, but we are not able to conclude from the evidence that Masterson is entitled to recover damages for mere delay. ■ There is in the record enough to indicate that the failure to deliver from time to time was a matter which the ' parties regarded as something not insisted upon by Masterson arid possibly waived by him. The real controversy relates to the plain*283tiffs having an honest, valid and sufficient excuse for refusing to proceed with its contract. •
The relations established between the plaintiff and Masterson by their contract are plain. The plaintiff in no way bound itself to .all the terms and conditions of Masterson’s contract with the city. It agreed to manufacture one-half the pipe and a certain portion of the special castings. Nevertheless, it was bound to f urnish such pipe as complied with the specifications of the contract between Masterson and the city. Its contract with Masterson required that all the pipe and special castings should be made in accordance with the specifications and plans of the department of water supply. The specifications of the contract require that the castings “ shall be free from scoria, scabs, cold shuts, sand holes, blow gates, gate shrinks, checks and core cuts, together with any and all imperfections caused by cracked or crushed cores, or other defects or imperfections caused by improper materials or manipulation.” The contract between Masterson and the city provided that pipe to. be furnished should be inspected by inspectors appointed or . selected by the city of New York, and it recites, as. before remarked, that “ each pipe while under the required pressure shall be rapped with a hand hammer from end to end to discover whether any defects have been overlooked. Any pipe or special casting which fails under this test shall be rejected. This inspection and test shall be made at the foundry under the direction of the Inspector and at the expense and risk of the Contractor.” It also provides for a final inspection of the pipe and special castings after delivery on the line of the work, and that the approval of any pipe or casting by the inspector shall not prevent its rejection if any imperfection shall be discovered at any time before the final acceptance and payment for the entire work included in the contract. Although the plaintiff was not bound by all the terms of the contract between Masterson and the city, its officers understood that the articles to be manufactured and delivered by them under the contract with Masterson were to be subject to the inspection provided for in his contract with the city. The best evidence of that is, that the plaintiff acted upon that understanding and placed its reply to the counterclaim of Masterson upon the ground that the inspection by the city inspectors of its product was not made in good faith and that much of *284the product of its factory intended for Masterson was arbitrarily and unjustly rejected by those inspectors. In addition, it invited ^he attendance of the inspector! While the inspectors were not, in a strict sense, agents of Masterson, yet by his contract with the city, he clothed them with authority to pass upon the sufficiency of the articles to be furnished. He made the sub-contract with -the plaintiff in view of the inspection thus to be' made, and he had stipulated with the city that it be made at the place of manufacture. It was with his consent that the inspectors went there, and the plaintiff contracted with him and not with the city as to inspection. That inspection was required for Masterson’s protection. There was no privity between the city and the plaintiff. Masterson authorized the city inspectors to act, and if they actecT in bad faith the plaintiff had no remedy against or claim upon the municipality, Tlie right of inspection was conceded, but the good faith of the inspectors in rejecting the articles is open to inquiry. If the articles were manufactured in accordance with the specifications Masterson was under obligation to take them. If they did not conform to the specifications, and were honestly and fairly rejected by the inspectors, then there was a breach of the contract by the plaintiff in refusing to make deliveries, and it would properly be held responsi- • ble for damages sustained.
It is urged by the. respondents that the refusal of the city inspectors to accept the pipe would not justify the plaintiff in refusing to perform its contract. We are of opinion that it would. Misconduct of the inspectors amounting to bad faith would certainly have been an excuse to Masterson (Gearty v. Mayor, etc., of New York, 171 N. Y. 61), and the same rule should apply between'the plaintiff and the defendant. The contract, although not based in express terms upon city inspection, was construed and acted Upon as requiring the plaintiff to submit to that inspection, and under the reply of the plaintiff to the counterclaim and the proof as made it is immaterial that a provision to that effect was not inserted in the sub-contract.
The facts in connection with the refusal of the plaintiff to complete the contract with Masterson are, in brief, the following : On January 15, 1901, the plaintiff notified Masterson that it was ready for the city inspectors / they went to the plaintiff’s factory early in *285.February and deliveries under the contract commenced soon thereafter. It was claimed by Masterson that the pipes were not delivered in sufficient quantities, and on February twenty-fifth Draddy, Masterson’s general manager, went to Philadelphia, where he was informed that the plaintiff was having trouble with the inspector. There still being some delay in deliveries Draddy went again to Philadelphia on March second and was again told that the difficulty was with the inspectors; that the pipes were rejected for trivial and insufficient cause. This condition continued until July twenty-sixth when Draddy again went to Philadelphia and the same reason was assigned for delay. During all this time complaint was being made by the city. On September sixteenth, in answer to demands for more pipe, the plaintiff wrote Masterson : “We have been doing our utmost to furnish the needed castings on your order in spite of most unreasonable, retarding and exceedingly costly inspection. Rejections of large expensive pieces have been made steadily, for most trivial reasons, until now we. are compelled to advise you that until the difficulty is remedied, we shall be obliged to cease making any further pieces, either of specials or of pipe. It is impossible to work under the unprecedented treatment which we have suffered under this present inspection.” Masterson replied that he had submitted the plaintiff’s letter to the department and was notified that the trouble lay in the pipe and castings which did not come up to requirements. Again on September twenty-fifth, Masterson wrote urging deliveries, and to this letter a telegram was received, asking him to meet the plaintiff’s treasurer. At this meeting on September twenty-sixth, the representative of the company stated that it could not make pipe under the inspection and would not make any further deliveries. Nevertheless on October second a further shipment was made which was received about the fifteenth. After that Masterson continued to urge further deliveries, and on November nineteenth he wrote stating that lie had received no shipment since the one of October second, and asking how the matter stood. On November twentieth the plaintiff replied : “ We wrote you that the inspection under which we have been compelled to work had become unendurable, and we declined to make any more pipe until we could be assured of fair and reasonable treatment.” On December fourth Masterson notified the plaintiff that unless it proceeded within five *286days to make deliveries he would treat the failure: to do so as a breach of the contract and purchase elsewhere. Yo pipe within the time fixed b.y this notice was received, and Masterson made efforts to secure the balance at the most reasonable and favorable figures, and finally entered into a contract with the United States Cast Iron Pipe and Foundry Company!
From all this evidence we think it is established that there was a breach of the contract on the part of the plaintiff after December fourth which justified Masterson in procuring the balance of the pipe from sources other than the plaintiff, unless the plaintiff had a valid excuse for its default. Masterson was not bound to look to •* such other sources of supply until it was definitely ascertained that the plaintiff would not proceed with its contract. The excuse consists in the alleged Unfairness and bad faith of the inspectors. The question then remains of the character of the inspection made by the city inspectors. Was it so Unreasonable and unfair as to justify the plaintiff in the course it pursued respecting its contract? The inspection was made at the factory of the plaintiff by three inspectors, Bennett, Bates, and .Samuels, who were witnesses called by the defendant Masterson. Bennett was a “ superintendent inspector-.” . He testified that he inspected nearly all the pipe manufactured by the plaintiff after April'tenth, and that he found defects therein; and that “ none of these pipes that I rejected were" frée'from some-'of • the defects that are mentioned in Section 90 of the contract.”. Bates, another inspector, testified at great 'length as to the finding ‘ of ' defects in the pipe; that some he could see with the naked eye, and" that he would then "test them with the hammer to discover how deep or extensive they Were. Samuels, another inspector, who accompanied Bates, also testified to the inspection and the use O'f the hammer, and that the pipes rejected had defects. ■
On all the evidence upon the subject of inspection, there - arose a disputed question of fact. Although no precise finding was made upon that question by the trial judge, he must "have resolved it in "favor of' the defendant Masterson, and under the proofs we would' not feel justified in reaching any other conclusion; but there are two erroneous, rulings of the court in the rejection of evidence offered by the plaintiff which should have been allowed- on the issue of the character of the inspection. The obvious intent of the plains *287tiff was to show that the inspection made by the hammer in the way in which it was made injured the pipe, and that defects for which much of it was rejected were created by the inspectors. It is fairly to be inferred from all the evidence.that scoria to some slight extent will be present in all castings such as were the subjects of the plaintiff’s, contract. . Bates testified that whatever scoria there was would necessarily, in such pipe castings, rise to the top of the spigot end,, because it would bp lighter than the molten iron. He testified that the majority of the pipe he rejected was defective in the spigot end,, and that he discovered the defects by the use of the hammer on.the outside edge; that the defects he found were in the rim and in the base of the head; that they were discovered by the eye, but that if his eye told him there was scoria there that would not be enough to-reject the pipe. He would then use the hammer. If there, were a greater amount of it he would have the pipe cut. If there were other indications of scoria, but not very much to be seen, he would want to use the hammer for the purpose of seeing how deep it went; that it was not that the pipe must be absolutely free from scoria, but must be so far free that the usefulness of the pipe would not be affected; that a little,' perhaps, would be of no damage — and he said that it was scoria to a large amount for which he would reject the pipe. Samuels testified that he accompanied Bates and inspected the pipe at the plaintiff’s factory. His method of inspection was slightly different from that followed by Bates, but the use of the hammer was practically the same. This witness (Samuels) was asked on cross-examination whether, if he found that there were, indications of scoria or blow holes' in the end of the pipe, he would pursue it further with the hammer, to which he answered “yes.” He was then asked, “ In order to see how far it went into the iron ? Answer: “Yes.” He .was further asked how far it must go into the iron, in his opinion, to make the pipe defective, to which he replied that he was not supposed to have an opinion upon that, and that he had his specification to go by. “ Q. I ask you your opinion % ” That was objected to. After colloquy between the court and counsel, the court said: “ If you attach much importance to it, I will allow it and overrule the objection.” The witness declined to answer, stating that it was none of his business. Thereupon the court was requested to instruct the witness to answer the question. *288The witness stated that he would not like to give an answer without the specifications, and he then undertook to present his reasons -for declining to answer. The court refused to instruct the witness as requested, for the reason that the. question called for an expert opinion, which the learned judge did not think he could force the witness to give, and authorized him not to answer the question unless inclined to, to which counsel for the plaintiff excepted. The opinion asked for was not that of a witness called.- merely as an expert. The question called for the opinion of the man who made the inspection, who used the hammer (which was to be ■ used by ■rapping), -and it was put with reference to the particular pipe which he inspected and upon w-hich. he used the hammer. The fullest cross-examination of this witness should have been allowed, and the . competency of the inspector to make the inspection, by the- use. of. the hammer was material to the plaintiff’s case, particularly as it insisted all- through-the trial, that it was the inspection itself that destroyed the-pipe or some of it.
-Again, the court excluded the testimony of expert witnesses by whom the plaintiff intended- to show that the inspection was unusual, improper and unfair and that, by the use of the hammer, pipe "which fully conformed to the specifications were disfigured and in. some cases destroyed by the inspectors. ' It is stated in the record that in order to prevent the waste of time that would be occupied in interrogating the witnesses who were in court, the admissibility ■ of the evidence was considered on an -offer of proof. The court declined to take the testimony of these witnesses,- sustaining an objection of counsel for the defendant Masterson that the plaintiff was bound 'by the inspection just as Masterson was. The plaintiff - insisted upon its right to call the witnesses for the purposes above o stated; and- the court said that it would not permit the plaintiff to' offer proof of anything except fraud, corruption or bad faith on the part of the inspectors. We are of opinion that the plaintiff had the right to show that the inspectors were acting ignorantly and wantonly in disregard of proper inspection, as required by the specifications. The offer of the plaintiff included proof not only, that the inspection was improper but that it disfigured and destroyed the pipe and that the rejected pipe in “a vast majority of cases com formed to the spécifieations.” It is claimed, however, by the defend- , *289ant Masterson that the inspection was absolutely conclusive and binding upon the plaintiff. That might lie so were it not for the element of bad faith in the conduct of the inspectors. The case of Montgomery v. Mayor (151 N. Y. 249) does not apply. That was a case in which it was held that contractors with the city for work and materials cannot maintain an action against it for damages caused by the rejection of materials by an official vested, by the contract, with the power of inspection and rejection, and whose power has been recognized by the contractors by procuring and completing the work with other materials.' In that case damages were claimed for increased cost of work occasioned by the defendant and its agents in delaying the work. The inspector rejected pipe and cement and the court said that possibly he was very arbitrary in doing so. The- plaintiffs there were not otherwise prevented from going on with the work than by the objections made by the inspector to the suitableness of the materials. In the present case the question is as to the acts of the inspectors not being arbitrary merely, but as .creating defects for which the pipe .was rejected and consequently of their bad faith in rejecting that pipe.. After one rejection it was not incumbent upon the plaintiff to deliver the articles on the line of the work for a second inspection.
The judgment should be reversed arid a new trial ordered, with • costs to appellant to abide the event.
Yah Bbtjnt, P. J., concurred.
Judgment affirmed, with costs.