Court Opinion

ID: 5266051
Source: CourtListenerOpinion
Date Created: 2022-01-06 18:58:18.076523+00
Date Added: 2024-06-11T08:28:09.047089
License: Public Domain

Page, J. (dissenting):
I cannot assent to the contention that there was no consideration for the agreement of the city of New York, acting through the board of estimate and apportionment and the Public Service Commission, to reimburse the contractor for the extra’expense caused by the increase of wages; nor that such an agreement, and the acts of the Legislature authorizing the same, was to pay to the contractors an extra compensation or gratuity within the purview *373of article 3, section 28, of the Constitution of the State of New York.
The contract under which these plaintiffs were doing the subway construction work provided: “In case the contractor shall be actually and necessarily delayed by reason of any labor strike not caused or instituted or provoked by the contractor or by any sub-contractor, agent or representative of the contractor * * * then the said date for completion shall * * * be extended by resolution of the Commission * * * by the amount of the time of such delay as determined by the Commission.” The plaintiffs and the various subway contractors acting together under a corporation known as the General Contractors Association had entered into a collective bargaining agreement with the labor unions fixing the scale of wages to be paid for labor until the completion of the contract. Notwithstanding this agreement, certain classes of workmen employed by plaintiffs and other of said contractors demanded an increase over the then prevailing rate of wages. Thereupon a conference was had among the workmen demanding the increase, or their authorized representatives, the plaintiffs and the other contractors, or their authorized representatives, and the chairman of the Public Service Commission, acting and authorized to act for it. The chairman of the Public Service Commission insisted that the increase in wages be granted and paid and the plaintiffs and other contractors thereupon agreed to and did pay such increase under protest and with the understanding that no further increases be asked by the workmen. Notwithstanding this agreement, and in violation of the terms thereof, the workmen, within two months thereafter, made a demand for a further substantial increase in wages over the scale fixed by said agreement and also over and above the then prevailing rate of wages on subway and similar work, to take effect on April 1, 1917, and threatened to strike if the demand was not granted. The plaintiffs and the other contractors refused to comply with this demand. The workmen thereupon appealed to the Public Service Commission, which msisted that the subway work must not be interrupted and also insisted that to prevent its interruption this increase demanded by the workmen should be granted. The action of the Public Service Commission and the board of estimate and apportionment of the city of New York and the various laws passed by the Legislature of the State of New York are fully stated in the opinion of Mr. Justice Greenbaum. In my opinion the modification of the original contract and the agreement for the city to repay to the contractors the increased cost of labor rested upon a sufficient consideration to make it enforcible.
*374The plaintiffs were only required to pay the prevailing rate of wages, and, therefore, when the workmen demanded pay in excess of, that rate, and threatened to strike unless their demand was granted, the plaintiffs would have been entirely within their rights in- refusing the demand, and if a strike had been the result, the time for the completion of the work would have been extended by the amount of time of such delay, by the provision of the contract above quoted. In yielding to the demands of the workmen and of the Public Service Commission and agreeing to pay a rate of wage in excess of the prevailing rate, the plaintiffs did something that they were not obliged to do and relinquished the rights to resist the demand of the workmen. Furthermore, the delay in completion of the subway construction would be of great detriment and cause financial loss to the city. 1. In the delay in furnishing needed transit facilities, which would postpone the development of the outlying districts and,- therefore, delay the increase of taxable value of those properties and the resultant increase of the revenue from taxes. 2. The city was furnishing the capital for the construction work and delay would largely add to the interest charge which the city would have to pay. There was, therefore, a detriment to one party and a substantial pecuniary advantage to the other, which would furnish ample consideration to support the modification of the agreement, and when this agreement was authorized and ratified by the. Legislature every legal .obstacle was removed to its enforcement. The present case is clearly distinguishable from Gordon v. State of New York (233 N. Y. 1-11), in which there is no fact that would tend to show any consideration for the increase, except a moral obligation founded in equity and justice. The court said: “ Liability of the State based upon equity and justice and by reason of a moral obligation has been frequently urged in this court and thus far claimant has succeeded by reason of the application of such terms. Equity and justice recognize the inviolability of contracts, protect and enforce the rights of parties thereunder, inhibit an unlawful abrogation of the same, award damages arising from a breach thereof and likewise decree specific performance of contracts. Equity and justice do not require the State to reimburse a contractor for the increased expense incurred by him in the performance of a contract due in no measure to the act of the State. The claimant assumed the risk incident to the performance of his contract. Had the cost of labor and materials decreased rather than increased, the State under the contract would still be obligated to pay the unit prices it covenanted to pay, and equity and justice would turn a deaf ear to a suggestion by the State that the expense to *375claimant had been materially reduced, his anticipated profits thereby largely increased, and, therefore, a moral obligation existed upon his part to reduce the cost to the State.
“ The State did not undertake to indemnify claimant against loss upon his contract. On the contrary, it required him to give a bond for a strict compliance on his part with the terms of the same. War conditions and the increased cost of labor and materials or scarcity of labor were not precipitated by the State or due to any act upon its part. So far as the record discloses, the State performed every obligation resting upon it under the contract.” (Italicization mine.)
The constitutional provision here invoked, as shown by the entire burden of the opinion, was that it prohibited the State or city from granting a gratuity or charity. In the instant case the plaintiffs are asking no gratuity or charity, but are asking the agreed compensation for the relinquishment of a valuable right.
In my opinion the orders overruling the demurrers should be affirmed.
Smith, J., concurs.
Order reversed, with ten dollars costs and disbursements, and demurrers to 4th, 5th and 6th causes of action sustained, with ten dollars costs. Settle order on notice.