Admiral Realty Co. v. Gaynor

132 N.Y.S. 220 | N.Y. App. Div. | 1911

Scott, J.:

The plaintiff appeals from an order denying its motion for an injunction pendente lite. This is a taxpayer’s action brought under. the authority of section 51 of the General Municipal Law (Consol. Laws, chap. 21; Laws of 1909, chap. 29), for the purpose of enjoining (1) the carrying out of the terms of a resolution of the board of estimate and apportionment purporting to have been passed on July 21, 1911, directing the preparation of a contract to carry out a plan of operation by the Brooklyn Rapid Transit Company, or its nominee, of new subways to be constructed by the city of New York, in conjunction with certain other lines of railway owned or controlled by that company on terms set forth in that resolution; and (2) to -restrain the performance of the four contracts between' the city of New York and the Bradley Contracting Company for the construction of four sections of subway on the so-called Lexington Avenue route, said contracts likewise purporting to have been authorized by the board of estimate and apportionment by resolutions adopted on July 21, 1911. .

The sole theory on which this action is based is that the several agreements which are sought to be restrained and nullified, and the acts of the public officers by whom they are claimed.to have been sanctioned are illegal, for the reasons that will presently be discussed.

There is no accusation that any defendant has been guilty of fraud or bad faith. The two matters sought to be restrained by injunction are entirely, independent of each other. The Bradley contracts are only for the construction of subways to be used for the purposes of a rapid transit railroad. The other contract, when made, will be for the operation of. a railroad in the subways thus to be constructed. It is conceded that it is entirely legal and competent for the public authorities to separately contract for construction and operation and no complaint is made on that score.

As to the proposed contract for operation.

The action proceeds upon the theory that the terms of the tíontract for operation have been finally determined upon, and that nothing remains but to prepare and execute a contract. It appears from the papers before us that early in the present year the general subject of a contract for a new rapid transit route or routes was taken up and considered by a joint committee consisting of the members of the Public Service Commission and certain members of the board of estimate and apportionment. This joint committee invited and received informal proposals from two companies already operating lines in the city of New York, to wit, the Interborough Rapid Transit Company and the Brooklyn Rapid Transit Company. After consideration the joint committee' made a report favoring the execution of an operating contract upon terms satisfactory to the Brooklyn company, and which could apparently be carried out only by that company. It is a contract to be made as recommended by this joint committee that it is now sought to enjoin. The learned counsel for the plaintiff has argued before us with much force and earnestness that such a contract would be illegal (1) because it would violate section 10 of article 8 of the Constitution of this State, which forbids any county, city, town or village to give money or property, or loan its money or credit to or in aid of any individual, association or corporation, and (2) that it is ultra vires of the city of New York because no one could bid for the contract except the Brooklyn Rapid Transit Company, and hence that there can be no competition for the right to operate the railroad. The contract foreshadowed by the joint committee is in many respects an unusual and extraordinary one, doubtless because the problem to be solved was itself unusual and extraordinary, but we do not find it necessary at this time to consider or discuss the objections to it ■which are urged by plaintiff, and expressly forbear to pass upon them, because their discussion and consideration at this time would be premature and academic. For this reason the learned counsel for the respondents has wisely and properly declined to undertake at the present time to enter upon a defense of either the legality or constitutionality of the proposed contract. The act under which rapid transit railroads must be constructed requires that many preliminaries shall be observed before any contract for. operation can become operative, in the course of which any proposed contract must withstand the scrutiny and obtain the approval of the counsel to the Public Service Commission and the corporation counsel, neither of whom would be likely to approve a manifestly illegal and unconstitutional contract. It must also be subjected to a public hearing,- and must meet the approval both of the Public Service Commission' and of the board of estimate and apportionment. No one of these steps has yet been taken. The joint committee whose report has aroused the apprehensions of the plaintiff was, as has been aptly described by counsel, an extra-statutory or non-statutory body, and its report, although accepted and approved by the Public Service Commission and the board of estimate and apportionment, is really binding upon neither, and both are still free, as a matter of law, to propose and approve any contract which may commend itself to then respective judgments, however widely it may depart from the recommendations of the joint committee. There is, therefore, no such imminence of the execution of a contract as would justify a temporary injunction to prevent its execution, or even an examination of its legality.

As to the contract for construction.

That portion of . the proposed subway system which is to occupy Lexington avenue was divided into sixteen, sections, for all of which bids were invited and received. These bids were made upon what is known as the unit basis, that is to say, instead of bidding a single price for the work as a whole, the classes of work were divided and subdivided into a great number of units, for each of which a separate bid was made. These bids were based upon construction contracts exhibited to the bidders which embraced (a) the contract proper setting forth the agreement between the parties, (b) the specifications setting forth the way in which the work was to be done .and the nature of the materials to be used, and (c) the plans or contract drawings. Four of these contracts have been let to. the Bradley Contracting Company, and are now in the course of execution. It is these that plaintiff seeks to enjoin. It is not necessary to ..dwell at length on all the grounds upon which an injunction is sought, for none of them are in our opinion sufficient to justify the issuance of an inj unction pendente lite, and the halting of the work until a trial can be had. One of the objections is that, after the advertisement for bids and before the letting of the contracts to the defendant Bradley Contracting Company, the Public Service Commission decided that it would thereafter alter the plans by slightly modifying the size of the conduit. • Hence, as it is claimed, the committee let a different contract from that for which it had invited bids. Both the act under which the Commission proceeded and the contract which it offered to bidders contemplated and provided for possible modification of the plans and specifications, and the modifications upon which the Commission have now determined are clearly such as might lawfully have been determined upon and made after execution. In point of fact the contracts have been executed exactly as submitted to bidders, and the contemplated changes in the plans are yet to be made. Whether or not these changes are of such a character as would probably induce a change in the unit prices bidden by contractors, was a matter for the Commission to determine. As to the greater number of the sections of the Lexington avenue route, it has concluded that the projected changes may make a difference and has determined to readvertise. As to the four contracts now under consideration, it has concluded that the changes would make no difference. It is not our duty to review the exercise of its discretion in this regard.

Concerning the objection that the construction contracts required the separate and independent approval of the mayor, we are of opinion that contracts for construction only do not require to be thus approved. (See Greater N. Y. Charter [Laws of 1901, chap. 466], §§74, 242, as amd. by Laws of 1905, chap. 629; Id. §74, as amd. by Laws of 1905, chap. 630; Rapid Transit Act [Laws of 1891, chap. 4], § 5, as amd. by Laws of 1905, chap. 631, and Laws of 1909, chap. 498.) The making of a contract by the city of New York merely for the construction of a subway, sewer or other sub-surface structure which is- to be and remain the property of the city does not grant to the contractor a franchise or right to use the street within the meaning of the statutory provisions requiring in certain cases the separate and independent approval of the mayor. Whether such approval would be requisite to a contract for operation is a different question which is not presented on this appeal and which we do not consider. The defendant Bradley Contracting Company objects that the city of New York, which is contracting party with it, is not a party to the action, and urges with much force that no action should be taken holding the contracts to be invalid unless both parties to the contract are before the court, so that both shall be bound by the judgment or order to be entered. This objection is not without weight, but the conelusion at which we have arrived renders it unnecessary to pass upon it at this time.

The order appealed from is affirmed, with ten dollars costs and disbursements.

Ingraham, P. J., Clarke, Miller and Dowling, JJ., concurred.

Order affirmed, with ten dollars costs and disbursements.