26 N.Y.S. 932 | N.Y. Sup. Ct. | 1893
The plaintiffs base their right to relief in this action upon three propositions: First. That the specifications for the paving in question required the use of a particular kind of pitch, to be obtained from a particular place. Second. That none of that kind of pitch can be obtained from that
The payment of public money upon an illegal contract, or even the making of an illegal contract upon which public money may be paid, will be restrained by the court upon the application of any qualified taxpayer, on the ground that it is an “illegal official act,” tending to waste the property of the public. Laws of 1881, chap. 531, as amended by Laws-of 1887, chap. 673, and by Laws of 1892, chap. 301; Code Civ. Proc. § 1925.
Any unauthorized combination or arrangement that tends to prevent competition in buying, selling or using a certain article, either generally or in a particular locality, and thereby to increase the price thereof, to the detriment of the public, is, in a legal sense, a monopoly. People v. North River Sugar Refining Co., 22 Abb. N. C. 164.
An agreement to pay public money to a monopoly, knowing it to be such, and intending to favor it as such, is an illegal contract, and any action in executing or performing the same is an illegal oficial'act, within the meaning of the statute already referred to. Warrin v. Baldwin, 105 N. Y. 534; People v. Gleason, 121 id. 631; Talcott v. City of Buffalo, 125 id. 280; Ziegler v. Chapin, 126 id. 342 ; Nelson v. Mayor, etc., 131 id. 4; 1 Dill. Mun. Corp. 466; Dolan v. Mayor, 4 Abb. (N. S.) 397; Bigler v. Mayor, 5 Abb. N. C. 51.
If, therefore, the common council of the city of Utica, either through artfully drawn paving specifications, or by any other oficial act, entered into contract, or attempted so to do, in the name of the city, with a monopoly, to the actual or practical exclusion of all competition, its action was in violation of law and calls for interference by the courts.
This carefully drawn statute presents two features worthy of especial attention in this case. First. It permits the active participation of lot owners in the proceedings to pave the street in front of their premises, by authorizing them to determine the kind of pavement to be laid. While they cannot compel the common council to pave, they can compel the use, when the street is paved, of the particular kind of pavement that is satisfactory to two-thirds of their number. Second. Another peculiar feature is, that it not only invites competitive bidding between contractors generally, but after their bids are made public, it authorizes further competition, limited to the lot owners themselves, upon the basis of a reduction in' price of not less than fifteen per cent below the most favorable proposal of the general bidders. This is a protection against unreasonable prices, whether they arise from a combination among contractors, or from any other cause. Thus these two provisions enable the lot owners, by appropriate concert of action, to decide upon the kind of pavement, and should enable them to get it laid at a reasonable rate, leaving to the city authorities the power to determine whether the street is
In the spring of 1892, the common council determined to pave South street, Sunset avenue and several other streets in the city of Utica, all of which are the subject of controversy in this action. While the proceedings were not precisely the same in the case of each of said streets, the method of procedure was substantially the same, so that, unless otherwise mentioned, the effort to pave will be treated as if made in a single proceeding to pave a single street.
Rutger street had been paved in 1886 with asphalt pavement, and the result seemed satisfactory to the citizens, for in 1888, when upper Genesee street was paved, the lot owners not ofdy designated “ Trinidad Asphalt Street Pavement, the same kind laid on Rutger street,” but even petitioned the common council to reconsider its action in awarding the contract to the lowest bidder, asking that it be awarded to the Warren-Scharf Paving Company, the same that had paved Rutger street, which was accordingly done. Subsequently the same designation was used in the case of other streets,, thus indicating a decided preference on the part of lot owners for the kind of pavement in use on Rutger street. This is. significant in view of the fact that in the meantime other experiments in asphalt paving had been made that were not regarded as satisfactory.
After the common council had determined to pave the streets in question, and in March, 1892, lot owners representing the requisite frontage, designated “ Trinidad Asphalt Street Pavement” as the kind they wished to have laid, adding that the variety of asphalt to be used should be “ the same as that used in the pavement laid on Rutger, Genesee and Columbia streets.” The usual action was thereupon taken by the com-, mon council, and specifications were prepared, requiring the use of “ the best quality of refined Trinidad Asplialtum, obtained from Pitch Lake in the Island of Trinidad.” After duly advertising, proposals were received, and the bid of the Warren-Scharf Asphalt Paving Company, which was based
June third, the proposals that had been presented were opened, and those made by the Warren-Scharf Company, which was the only bidder, were declared the most reasonable. At the same meeting, the corporation counsel was directed to
Notice was given in the usual way that bids would be received until July twenty-seventh at seven-thirty p. m., and
James J. Dwyer.................at $2.38 per square yard.
John Marsden..................at $2.65 per square yard.
'The Warren-Scharf Asphalt Paving
Co...........................at $2.81 per square yard.
'The Sicilian Asphalt Paving Co.... at $2.84 per square yard.
The kind of asphalt to be used and the place from which it was to be obtained were thus described:
By Mr. Dwyer: “The best quality obtained from the
Pitch Lake, situated in Bermudez, Venezuela, S. A., and to contain 95 per cent bitumen.”
By Mr. Marsden: “ Refined Trinidad Asphalt, equal to .any brought from the Island of Trinidad.”
By the Warren-Scharf Paving Co.: “ The best quality of refined Trinidad Pitch Lake Asphalt to be obtained directly from the well-known Pitch Lake on the Island of Trinidad, W. I.”
By the Sicilian Asphalt Paving Co.: “ The best quality of Asphalt obtained from the Pitch Lake in the Island of Trinidad.”
A bond accompanied each proposal, conditioned that the contractor should do the work at the price named, according to the plans and specifications and subject to the supervision and approval of the city surveyor, and specifying a certain sum to be paid to the city as liquidated damages in case of nonperformance of the paving contract. The sum so specified by the Warren-Scharf Paving Company was the highest, and it was the only bidder whose bond in terms covered the warranty of the work, as required by the specifications. Its proposal was declared favorable and reasonable by a vote of eight to four, a motion to substitute the proposal of Mr. Dwyer having been lost bv a like vote.
As the specifications provide for a warranty, a proposal to do the work according to the specifications was a proposal to do the work with the warranty therein contained. The common council had not fixed the amount of the liquidated damages to be inserted in the bond, and the specifications were silent upon the subject, so that bidders had nothing to guide them in that regard.
In- August, 1890, a resolution was adopted by the council directing the city surveyor to “ add to the specifications to be filed, with the city clerk an estimate of the cost of the work, and the bidders be required to deposit with their proposals a certified check for ten per cent of the estimated cost,” but no notice of this appeared in the specifications in question, although there was indorsed upon them the word “ estimate,” followed by the amount thereof in dollars and cents. The raising of so many technical objections, which was not usual with the common council, and some of which, at least, were untenable, gives support to the charge that the aldermen were
The various resolutions of the council with reference to paving the streets in question, aside from the mere determination to pave and the like, were, with one or two exceptions, adopted by a vote of eight to four, the same aldermen uniformly constituting the majority and the minority. The mayor interposed his veto power with like uniformity, and there was a long struggle, covering a period of more than six months, between the majority of the council on the one hand and the mayor and a minority of the council on the other. The majority were of the opinion that only asphalt from Pitch lake should be used, because two-thirds of the taxpayers wanted that kind and no other, while the minority claimed that that particular quality of asphalt was controlled by the Warren-Scharf Paving Company and its confederates, and hence that competitive bidding would be impossible if limited in this way. As early as April the mayor had said in unofficial communication to the council that “ the charter contemplates competition. The specifications as now drawn with the words £ Trinidad Asphalt from, Pitch Lake ’ entirely crush it out, for it has come to our knowledge recently, and in such a way as not to be disregarded, that this kind of asphalt can only be procured by one party here bidding, which is equivalent to saying to this one party, £ Go on and do the work at. your own prices and hand in your bill.’ ”
After the temporary injunction was granted, the specifications were modified, but in such a way as, in the light of alii the surrounding circumstances, indicated simply an attempt to-
During the protracted controversy already alluded to the main point of difference between the contending interests was whether Pitch lake asphalt was a monopoly or not, and although the subject obtained wide publicity no one appears to have offered to sell or furnish that kind of asphalt for pay
Although different companies pave with Pitch lake asphalt, they do not compete with each other, but each taking a district comprising certain territory, confines itself to that locality. Whether this is by express or implied agreement, or without any agreement at all, makes no practical difference, for the result is to fasten a monoply in Pitch lake asphalt upon the city of Utica. While good asphalt pavement can be laid out of asphalt not obtained from Pitch lake, I do not regard the fact as of importance in this case, because the abutting owners had the right to designate the kind of pavement, including, as a necessary part thereof, the kind of asphalt out of which it •should be made. Although the common council could not, under the circumstances, lay any other kind, it wras their duty upon learning that the kind designated was for all practical purposes a monopoly, to refuse to lay any at all until the designation was changed or the monoply ended. Their persistent endeavor to force Pitch lake asphalt upon the city at an increase in expense of from $15,000 to $25,000 was illegal, even if they acted from good motives and in the honest belief that the wishes of abutting owners must control. Two-thirds of the lot owners cannot control to the extent of forcing a monopoly upon the other third as well as upon the general taxpayers, who pay one-tliird of the expense of all pavements. The one-third of the cost represented by the one-third of nonassenting lot owners, when added to the one-third paid by the city at large, show’s the large interest affected by the monopoly and in no wise consenting thereto. The members of
Without further protracting this discussion, I am of the-opinion that the plaintiffs are entitled to a permanent injunction, substantially in the form demanded in their complaint,, with costs to be paid by those members of the common council-whose action made it necessary to resort to the court for. relief.
Findings and a decree may be prepared accordingly by the-attorney for the plaintiff, and settled before me upon a notice.of two days to the attorney for the defendants.
Decree accordingly.