Harlem Gas Light Co. v. The Mayor, Aldermen & Commonalty of the City of New York

3 Rob. 100 | The Superior Court of New York City | 1865

Lead Opinion

Monell, J.

This submission is for the purpose of determining the liability of the defendants to pay for gas furnished by the plaintiffs to the public lamps in the month of September, 1864. The written contract between the parties expired by its limitation in July, 1859. No agreement has since been made, and it is contended by the defendants none can be implied.

The Harlem Graslight Company was incorporated in 1855, under the general incorporating act, passed in 1848, (Session Laws 1848, p. 48,) “for the purpose of manufacturing and supplying gas for lighting the streets and the public and private buildings,” in that part of the city north of Seventy-ninth street. At that time, no other gas company had obtained permission from the common council to lay conductors for conducting gas in any of the streets north of Seventy-ninth street, nor were any conductors laid therein. Companies organized under the general law are authorized to lay conductors only with the consent of the municipal authorities, which consent may be given “ under such reasonable regulations as they may prescribe.”

The permission granted to this company by the common ' council was contained in a resolution passed in 1855. It gave the consent of the corporate authorities “ in consideration of the following articles (among others) being faithfully complied with,” namely; that the company should furnish a supply of gas to all persons who might desire the same ; that it should proceed immediately * * * to lay mains in the district embraced in the grant, and within two years supply gas to be used by the corporate authorities or private consumers. The common council reserved the right to revoke the permission, upon proof of the failure of the company to comply with the conditions therein expressed, or with any resolution or ordinance which might be thereafter adopted.

The charter gave the defendants power to light the public streets, and confided its exercise to the street department. Hence it became the duty of the corporation to provide the necessary means for that purpose. (Hutson v. The Mayor, &c. of New York, 9 N. Y. Rep. 163.) The permission given was accepted by the gas company with all its conditions and reservations, and thereby became a valid subsisting contract on their part. (Attorney General v. The Mayor, &c. of New York, 12 N. Y. Leg. Obs. 17. People v. Platt, 17 John. 195. Benson v. The Mayor, &c. of New York, 10 Barb. 223. McLaren v. Pennington, 1 Paige, 102.) The obligations imposed by this contract were, that the gas company would supply gas to the corporate authorities for the purpose of lighting the public streets, at such times and in such places, within their district, as the common council might from time to time prescribe ; and that they would also comply with any resolution or ordinance which might be adopted.

Two parties are required in the formation of a contract. It must be supported by a sufficient consideration, and must be mutually binding. By the adoption of the resolution of permission, upon the consideration therein expressed, and with the reservations and conditions therein contained, and its acceptance by the plaintiffs, the defendants became a party to the contract. Their authority to .engage in it was derived as well from their general duty to light the streets as from the general incorporating act before referred to, which in express terms empowered them to prescribe such “ reasonable regulations ” as they might deem proper. Such authority to give its consent, and to impose such restrictions and conditions as would furnish a consideration for the valuable privilege given, was a grant of power to the defendants to make a contract with the plaintiffs for a supply of gas to the public lamps. Putting, therefore, these transactions of the corporation and the gas company together, they furnish all the essential ingredients of a complete contract between the parties.

Ho statute that I am acquainted with prescribed any form of contracts, and it was not even necessary that they should be in writing. In Bonesteel v. The Mayor, &c. of New York, (22 N. Y. Rep. 168,) it was held that the bid by the contractor and its acceptance by the corporation constituted the agreement.

It cannot be doubted, I think, that as the parties stood upon the adoption and acceptance of the resolution, the plaintiffs were bound (under a liability to have the license revoked for a failure to comply) to supply gas to be used by the corporate authorities, as directed by any ordinance of! the common council.

The contract being mutual, it imposed a corresponding obligation on the defendants'to allow conductors to be laid in the public streets, and, by implication, a promise to pay a reasonable price for the gas furnished. The latter is upon the familiar principle that where a person buys an article without stipulating for the price, he is presumed to have undertaken to pay its market value. In the absence, therefore, of any stipulation in the contract fixing the price or compensation for the gas to be furnished, and the contract being otherwise complete and within the scope of the authority of the parties, the law will supply a promise to pay its reasonable value.

The permisssion to lay conductors was unlimited in dura- . tion, but could be annulled by failure to comply with the conditions contained in the resolution. Until annulled, the plaintiffs are bound to supply gas wherever required by the corporation.

The contract of July, 1858, merely fixed the price of gas furnished to street lamps for one year, and does not annul the previous agreement. It was auxiliary to it. When it expired by its limitation, the price was left to be ascertained by the value of the commodity at the time of its consumption. By the charter of 1849, (Sess. Laws 1849, p. 278,) the department of streets and lamps had cognizance of procuring the necessary supplies for, and lighting the public streets. In this department there was a bureau, the chief officer of which was called the “ superintendent of lamps and gas.” It is admitted in the case before us that since the organization of the plaintiffs' company the lamps have been lighted within the plaintiffs’ district, under the direction and superintendence of that officer, whose duty it was to superintend the carrying into effect the ordinances of the common council, in respect to lighting the public streets, and to discharge the duty of the defendants in that respect. Although a delegated power to an officer to superintend does not. necessarily clothe him with authority to bind the city by contract in respect to the functions of his office, yet I apprehend that his acts, as the authorized agent of the corporation, in directing the lighting of the public lamps in pursuance of general or particular ordinances, are binding, as being within the immediate scope of his authority, and merely in. the discharge of a duty resting on the corporation, and as carrying into effect the contract with the plaintiffs to supply gas where required. It appears that since the permission granted to the plaintiffs, the common council have, from time to time, adopted ordinances directing the plaintiffs to lay conductors in various streets not before lighted; and such streets have been supplied with gas by the plaintiffs under the original resolution of permission, and by direction of the defendants’ superintendent. Ho new contract was made ; but both parties recognized the existing contract as being in force. The corporation asserted its right to require the plaintiffs to supply gas under the resolution of April, 1855, and the plaintiffs admitted the obligation to furnish it.

It further appears that the corporation has annually represented to the legislature that a certain amount of money would be required for lighting, &c. the public streets, and the legislature has been asked to authorize the sum to be raised by tax ; and in 1864 the sum of $430,247 was authorized to be so raised. These several applications to, and acts of the legislature extending from the organization of the plaintiffs’ company to the present time, a period of ten years, are recognitions by the corporation of their obligation to pay, and ratifications by the legislature of the power of the corporation to light the streets, and necessarily, of their power to contract therefor, and may be regarded in the light of enabling acts.

In concluding this view of the question, I cannot see any reason for holding that there has not been, at all times, a subsisting legal contract by the corporation with the plaintiffs ; a contract authorized by law, complete in all essential parts, and of binding force and effect; under which the corporation may be compelled to pay the reasonable value of all gas furnished to it by the plaintiffs.

But it is contended by the defendants that all contracts, to be binding upon the corporation, must be made in the manner prescribed by the charter, which requires that all work to be done, or supplies to be furnished for the corporation, shall be by contract, founded on sealed bids or proposals made in compliance with public notice, and shall be given to the lowest bidder. (Charters o/1849 and 1857.) If the claim of the plaintiffs rested upon a contract required to be made in pursuance of the foregoing provision, it cannot be sustained. Hone of those provisions were complied with, and the contract would therefore be void. (Brady v. The Mayor, &c. of New York, 20 N. Y. Rep. 312. Bonesteel v. The Same, ubi sup.)

In the view, however, which I have taken of the question, the provisions of the charter relative to the formation of contracts has no application whatever. The general act of 1848, for the incorporation of gas companies, has not been repealed by any of the charters of the defendants, or otherwise; and the power it conferred upon the municipal authority, to contract in the form adopted, with the plaintiffs, is unchanged by any subsequent statute.

In the interpretation of a statute, a thing not within the spirit or intent is not within the letter, (James v. Potter, 2 Seld. 9,) and when the intent is ascertained, it will prevail over, and give construction to the words used.

The object of the provision in the charters referred to, was to open to general competition all work and supplies needed by the public authorities. Bids or proposals are required to be invited by public notice, and contracts must he awarded, to the lowest bidder. It is not perhaps too much to say that in every species of work or supplies which can be competed for, it is the duty of the corporation to invite proposals, and to give the contract to the lowest bidder. But where there is no possibility of competition, and in respect to whose manufacture one company has the complete monopoly, it seems to me that the provisions of the charter cannot be deemed to apply, and therefore impose no duty. The law must have a reasonable construction. If the object in a given case fails of accomplishment, the law construed by its intention must also fail. To advertise for proposals for a supply of gas in a district exclusively occupied by one gas company, would be a practical absurdity. It would enable that company to propose for the supply at a price much beyond the fair value ; and its single bid, (under the charter of 1861,) would entitle it to the contract at the price named, thus defeating the end designed, to secure the city from favoritism and jobbing.

It is not necessary to deny that illuminating gas comes under the denomination of supplies;, but the word in its application to the subject of contracts must be restricted in its signification and meaning to supplies which are, or may be the subject of a general competition, and which can be furnished by more than one person or company. Any other meaning given to the word would impute to the legislature the design of scheming with contractors to defraud the corporation, rather than an intention to protect its public treasury.

In The People v. Flagg, (17 N. Y. Rep. 584,) a city surveyor, under a resolution of the common council, had prepared maps of wharves and piers belonging to the corporation. Upon a mandamus to the comptroller to compel him to pay, Judge Comstock says : “ The language of this provision is somewhat broad, but I am quite well satisfied that it does not include the services of the particular kind now in question. In a large sense, the term “ work” may include all labor, whether mental or corporeal; but it has a more restricted sense, which may confine it to the various kinds of manual labor which may properly be the subject of general competition, and can safely be awarded to the lowest bidder.” The' case went off on other grounds, and the language quoted from the opinion was not adopted by the court, and was repudiated by one of the judges, but expressly upon the ground that the work could have been competed for. Nevertheless, the case sustains the proposition that the restrictive power of the corporation .to contract must be confined within the spirit and intent of the law, is not universal in its application, and, although directory as regards subjects within its purview, does not deprive the corporation of power to contract in other ways, in respect to matters not embraced within the restrictive clause. The corporation, irrespective of its charter, has general power to contract. The restriction is modal merely. (Peterson v. The Mayor, &c. of New York, 17 N. Y. Rep. 449.) Judge Hoffman, in The Farmers’ Loan and Trust Co. v. The Mayor, &c. of New York, (4 Bosw. 89,) says., there must be a class of cases in which the very object of the exercise of a municipal power would indicate the inapplicability of the provision; as where the whole object would be defeated if the corporation was compelled to advertise and give the contract to the lowest bidder.

In the exercise of all governmental powers, the officers of the government must be clothed, necessarily, with some discretion; statutes intended to weaken or destroy such discretion must be regarded as in derogation of a natural right, and should not be extended beyond the plain intent. Hence any interference with vested rights and powers must be restricted to subjects intended to be affected, and not enlarged to cover cases not within the object to be accomplished.

Enough,'I think, has been said to show that the corporation, in obedience to its duty to light the streets, is not compelled to advertise for proposals for a supply of gas. There could be no competition, and but one bid. It is true, the obligation to light the streets does not necessarily require the use of gas. Oil lamps could be employed. But the right to use gas is clearly within the discretion of the corporation, and their contract with the plaintiffs requires that they shall use it, and it would be a breach of faith, as well as of contract, to use any other commodity.

Although it may not be regarded as an open question in this court, I am, nevertheless, of the opinion that the plaintiffs having, by the request of the defendants, supplied gas to the public lamps, which had been received, accepted and consumed by them, the.plaintiffs are entitled to recover upon a quantum meruit. It is a general principle, that when a void or voidable contract has been fully executed, and its benefits have been received and accepted, the law will imply a promise to pay a reasonable compensation; this principle, in its application to persons and private corporations, is undoubted. (Feeter v. Heath, 11 Wend. 477. Sherman v. N. Y. Central Railroad Co., 22 Barb. 239.) And I can discover no reason for not applying it to a public or municipal body. The case of McSpedon v. The Mayor, &c. of New York, (7 Bosw. 601,) I know holds the other way; and if this case turned on that point, I should be bound by that decision. In that case, the common council directed, by resolution, the printing of Yalentine’s Manual, and the court said there should have been sealed bids invited by public notice, and held there was no contract, and no recovery could be had upon a quantum meruit.

Contracts, which are ultra vires, cannot be made at all by a corporation; therefore none can be implied. But when the power is clear, and the omission is something merely modal, neither a natural person nor an artificial body can be allowed to accept the benefit and escape the liability. Hodges v. The City of Buffalo, (2 Denio, 110,) and Halstead v. The Mayor, &c. of New York, (3 Comst. 430.) were cases of contracts, ultra vires. There being no original power to contract, no subsequent act of acceptance or ratification could imply a promise. I do not understand any of the cases, with the exception of McSpedon v. The Mayor, as going any further. In Peterson v. The Mayor, supra, Judge Denio says : “ That when the public functionaries omit to observe designated forms, no subsequent act] of recognition can supply a defect in these respects.” But the right to recover on a quantum meruit was not involved, and the case was decided upon another ground.

With the exception, therefore, of the case in this court, I think the question may be regarded as an open one, and I think the weight of reason, as well as authority, (as I will presently show,) is opposed to the doctrine of that case. Parties dealing fairly and honestly with a corporation, in the belief that the officials and agents are faithful in the discharge of duty, ought not to be deprived of a reasonable compensation by reason of any dereliction of such, officers. No wrong can be done to the corporation or those they represent. The same end, in effect, is attained as would be rendered by giving public notice; for it is presumed that no proposal below a fair and reasonable price would be made, and such is the only measure of a recovery upon a quantum meruit.

The English cases are uniform on this subject. In Clark v. The Guardians of the Cuchfield Union, (1 Low. & M. 81,) Wightman, J., says : “ Whenever the purposes for which a corporation is created renders it necessary that work should be done or goods supplied to carry such purposes into effect, and orders are given at a board regularly constituted, and having general authority to make contracts for work or goods necessary for the purpose for which the corporation was created, and the work is done or goods are supplied and accepted by the corporation, and the whole consideration for payment is executed, the corporation cannot keep the goods, or the benefit, and refuse to pay on the ground that though the members of the corporation, who ordered the goods or work done, were competent to make a contract and bind the rest, the formality of a deed, or of affixing a seal, is wanting, and therefore that no action lies, as they were not competent to make a parol contract, and may avail themsleves of their own disability.” And in Sanders v. St. Neot’s Union, (8 Q. B. 810,) where the action was for gates furnished for the workhouse of the Union, the court says : “We think the defendants cannot take the objection that the contract was by parol, inasmuch as the work in question, after it was done and completed, was adopted by them for purposes connected with the corporation.”

Mills v. Gleason, (11 Wis. R. 470,) involved the effect of a subsequent ratification by a municipal corporation, in rendering valid acts which were previously unauthorized. Paine, J. says : “ If the city adopts it, and receives the benefit of it, it is as much bound as if they had authorized it in the first instance ; every thing was done necessary to authorize the issuing of the bonds, except the publication of the charter, all the parties supposing it to be in force. If, after it was in force, the city received the proceeds, and appropriated them to its own use, and recognized the validity of the bonds, we could not well imagine a case more fit for the application of this rule.” I also refer to the case of Bigelow v. City of Perth Amboy, (1 Dutch. 297,) and to Messenger v. City of Buffalo, (21 N. Y. Rep. 196.)

The notice given by the plaintiffs in August, 1864, of a change of price, does not, it seems to me, affect this question. It was not agreed to, or acted upon by the defendants. Under the existing contract they are liable only for the reasonable value of the gas consumed ; they cannot be deemed, by their silence to have acquiesced in any other measure of compensation. It is, however, unimportant, inasmuch as it is admitted that the reasonable value of the gas is the same as stated in the notice.

Upon the whole, I am of opinion that the plaintiffs are entitled to judgment for $13,037.50, the amount claimed for gas consumed, and $721.03 government tax, with interest upon these sums from the time of the demand, with costs.

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Concurrence Opinion

Moncrief, J.

The learned counsel for the defendants concedes that in the absence of any restriction or limitation of the corporate powers, or legislative restraint upon the officers or agents of a corporation, contracts may be implied against corporations as against natural persons. It will be borne in mind that the claim made by the plaintiffs does not arise upon an allegation that a contract has been entered into with the defendants which might or might not conform to the provisions of the statute ■; and it must he assumed that each party to the controversy has acted in perfect good faith, and without intent to evade the requirements of the law, relative to the manner and form in which the defendants must contract for supplies to be furnished for the corporation. Every cáse to which we have been referred, as an authority against this claim, arose out of contract. In Appleby v. The Mayor, &c. (15 How Pr. 428,) the contract was made with the highest and not the lowest bidder, and contrary to an express provision of law, and therefore held to he illegal and void. In Brady v. The Mayor, &c. (2 Bosw. 173,) the ground of claim set forth in the complaint is simply a special contract made with the defendants, duly performed by the plaintiff, and his work accepted ; and the court say, at page 179: “It is obvious to observe that there are no issues in this action to raise the question, upon the consideration of which the referee has decided in favor of the plaintiff, viz. that the plaintiff, having done the work, was entitled to receive what the work performed in making such rock excavation was reasonably worth ; and that the defendants have legal power to pay for work on the basis of a quantum meruit, though it was done without contract, or under an illegal and void contract.” McSpedon, &c. v. The Mayor, &c. (7 Bosw. 601,) was for work done, &c. under a contract-made with the clerk of the common council. In each of these cases, in which a contract was sought to be enforced, it was held that the contract, not being in compliance with the law, was illegal and void, and the conclusion was inevitable, that if the work, &c. was done, delivered, and accepted under an illegal contract, no implied .obligation of the defendants to pay the just value thereof could be invoked, for the reason that such implication must proceed out of, and issue, from that which never had a legal existence. The contract being annihilated for inherent vice, cannot be restored in another form to effectuate the same purpose for the contractor violating the law: “ Ex nihilo nihil Jit.” The plaintiffs, in good faith, against their wish, have had their property taken from them by the defendants, and the same has been consumed for public purposes ; the defendants continue to use such property, and assert that they have no legal right to do so, except under contract, as especially provided by law, and are therefore not legally bound to pay what they admit it is reasonably and justly worth. This proposition seems to me to shock the moral sense, and to be at variance with all principles of justice, and should not be affirmed, unless upon some authority directly in point. I can find no such authority. This case, upon the facts as presented to us, would seem to be anomalous.

The defendants ought not to be allowed to say : “We are not permitted to make a parol contract, and we avail ourselves of our own disability.” It is said, in Hall v. The Mayor, &c. of Swansea, (5 Q. B. 547,) that if a municipal corporation has wrongfully got possession of the money of a stranger, or the money of one of its own members, the law raises an implied promise from the corporate body to refund the amount, just the same as in the ordinary case of a receipt of money by a private individual, which the latter has no right in conscience or equity to retain. “If the corporation have helped themselves to another man’s money, it would be absurd to say that they must bind themselves under seal to return it.” The defendants here have helped themselves to the property of the plaintiffs, and have consumed it for public purposes, so that the thing taken cannot be returned to the plaintiffs. It seems to me there can be no doubt of the liability of the defendants to restore to the plaintiffs the value of the property thus taken.

The plaintiffs are not actors in violating or attempting to avoid any law ; they have made no contract, oral or written, which can be questioned or denounced as illegal; it is not claimed by them that the defendants are liable by virtue of a contract made with them ; the plaintiffs simply say to the defendants : “ Having taken and consumed our property, the law should require that you shall make' us compensation by paying what it is worth.” (See 1 Atk. 196, ex parte Meymot. Hecker v. Mayor, &c. 28 How. Pr. 211. And see Bissell v. The Mich. South. and N. I. R. R. Co., 22 N. Y. Rep. 258.)

While it is true, as a general rule, that a corporation cannot, by its own act, enlarge its capacities, powers, or rights, and when it attempts to make contracts, must be held to a strict compliance with the statutory requirement's, and persons seeking to enforce such contracts must establish that the law has been satisfied by being made, &c. in the prescribed form, it does not, in my opinion, necessarily follow that it may not incur liabilities for which it must respond. In The People v. Flagg, (17 N. Y. Rep. 584,) it was argued by an able member of the court, in a matter quasi ex contractu, that the corporation were liable for services requiring scientific knowledge, without a contract. In The Farmers’ Loan and Trust Company v. The Mayor, &c. (4 Bosw. 80,) .the action was for use and oocupation of a pier, upon an implied assumpsit to pay what its use was reasonably worth. So, too, it is not doubted corporations can be held liable in cases where property is used for sudden or special occasions or , great emergencies, as where. gunpowder might be appropriated to stay extensive conflagration, by blowing up buildings, under the direction of the Mayor and other officials. Assuming, therefore, that the gas consumed in lighting the streets of the city, under the criticism of this court in the Farmers’ Loan &c. v. The Mayor (supra,) can properly be termed a “ supply,” I am of the opinion that the defendants, having appropriated it to public uses, under the circumstances of this case, are liable.to pay to the plaintiff's what it was reasonably worth.

I concur with my brother Monell, that judgment should be directed to be entered against the defendants for the sum claimed and agreed upon, with costs.

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Dissenting Opinion

Robertson, J. (dissenting.)

The first question which.this case presents is whether the corporation of the city of Hew York can bind themselves to pay for gas furnished to public lamps in said city by a contract made in any other mode than according to the first section of the statute of 1861, “ relative to contracts,” by such corporation, (Laws of 1861, ch. 308, Val. Comp. C. N. Y. 480,) and the thirty-eighth section of that of 1857, amendatory of the charter of such city. (Laws of 1857, ch. 446, Val. Comp. 278.) In regard. to a prior statute to the same effect, (Laws of 1863, ch. 217, § 12,, Val. Comp. 266,) this court has twice decided at general term, (Brady v. The Mayor of New York, 2 Bosw. 173; S. C., 20 N. Y. Rep. 312; McSpedon v. Same, 7 Bosw. 608,) that in reference to work to be done, or supplies furnished, they could not do . so. But for the authority of these cases I should have been inclined to think such corporation cóuld so bind themselves. In the first place, long before either of these statutes •were passed, such corporation were authorized to make contracts ; that was done by a far earlier charter ; and it is settled that a new law giving rights similar to those previously existing, but in a modified form, is not to be construed as excluding the exercise of such rights in such prior form, without express words or unavoidable implication to that effect; (Fairchild v. Gwynne, 14 Abb. 121. Evans v. Chapin, 20 How. Pr. 289.) In the next place, the statute of 1857 (§ 40) provides a sanction for its requirements by punishing criminally the officers who violate them ; and it would be an absurdity and oppressive to punish them for an act not only void, but necessarily carrying with it the evidence of its invalidity for all purposes. '

The title of the act of 1861 intimates that its purpose was rather to control officers in making contracts, than to restrict the power of the corporation to make them. The contracts, also, to be made by such corporation, are not mere private ones for their own private advantage; they are the discharge of a public duty for the public benefit; and rather than have the public suffer for the want of that which it was the object of such contract to accomplish, forms, although prescribed by statute, if not indispensable to such purpose, may be disregarded as not of the- essence of such contract. (Cole v. Green, 6 Man. & Gr. 872.) For a similar reason a disregard of statutory formalities does not vitiate an election either of public officers, (People v. Cook, 8 N. Y. Rep. 67; Cunningham v. Cassidy, 17 id. 276,) provided the will of the actual voters at such election is not thereby defeated, or the officers of private corporations. (Matter of Mohawk and Hudson R. R. Co., 19 Wend. 135. Matter of Chenango County Mut. Ins. Co., Id. 635.) It would be a greater injury to have the city of Hew York in darkness at night by reason of a failure by the city corporation to observe the statutory forms in making a contract for lighting it, than to make such a contract binding.

The statutes of 1857 or 1861 do not expressly exclude all other forms of' contracting, except that prescribed ; which is necessary to create a prohibition; and they require a security to be given for the performance of every contract, to be approved by the comptroller, before it is binding; neither of which acts is to be done by the corporation, or forms a limitation of their mode of making contracts. The exposure of every contract to offers by advertisement was for the benefit of the corporation, not of the bidders. A mandamus will not lie at the instance of the lowest bidder, “ who has given adequate security.” (People v. Smith, 2 Abb. 33. People ex rel. Beldon v. Contracting Board, Court of Appeals, Feb. 1865.) So that a contract under the statutes of 1857 and 1861 does not become complete and binding merely by force of the advertisement for offers and a bid ; otherwise there would be no necessity for having them signed by the heads of departments, in the name of the corporation.

These considerations were overlooked in the the two cases already cited, decided in this court y possibly they might have given a different direction to the decision, if they had been presented ; but as they stand unreversed, I feel bound to yield to their authority. To whatever criticism the first of those cases (Brady v. The Mayor, &c.) may be subjected, as authority for the doctrine that the city corporation can only contract for supplies and work pursuant to the statutes of 1857 and 1861, upon the ground that in it no cause of action founded upon an implied contract was alleged in the complaint, and no evidence was given on the trial before the referee of the worth of the services of the plaintiff, the second of such cases (McSpedon v. The Mayor, &c.) is entirely free from it. In that case such a cause of action was alleged, evidence was furnished of the value of the services, the point was distinctly made by the counsel for the plaintiff, and passed upon by the court in its opinion. This court in giving its opinion, even in the first case, by holding that no cause of action could arise for work done, where a contract had been attempted to be made in a form forbidden by law in relation to it, fixed the kind of illegality attached to it; it not only considered it as being incapable of being enforced in the form in which it was made, but also in the light of a violation of a prohibitory statute, such as those forbidding acts as against, public, policy, (Bissell v. Mich. S. and N. Ind. R. R. Co., 22 N. Y. Rep. 297 to 305, per Selden, J.) so that acts done under them could confer no rights. Such a view necessarily excludes a right. to recover upon, a quantum meruit for the services which had been rendered under a contract made in a. form forbidden by statute. The greater part of the opinion of the court in that case was devoted to examining whether the plaintiff could recover upon an implied, contract if the special contract were illegal, as had been held by the referee. In the course of that examination' the power of such corporation to make such implied contracts was fully discussed. But in the second of those cases (at the hearing of which, the learned judge who delivered the opinion1 in the first case, sat upon the bench, without, expressing- any change of views) this court expressly held the decision in the prior case to be decisive of- the question ■ of the want of power to make such contracts for supplies and work in any other than the statutory mode.

The language employed by the learned judge who delivered the opinion-of the court, in the first case, was quite strong and emphatic. He considered “ the answer” to the question, whether the defendants were liable to the plaintiff -upon as quantum meruit, because the work had been performed and was accepted, “ inevitable and too obvious to allow of extended discussion;” if “ answered affirmatively, * * officers and agents through whom alone the corporation could act, might disregard the statute, and in practice repeal it.” It was to “ the mind of the court the prominent objection to the plaintiff's case, and laying out of view every other objection * * it seemed to them fatal to it.” He founded such conclusions upon the principle that where- a statute has defined the mode of making a contract, no other could be adopted, citing therefor a remark in the case of The Farmers’ Loan and Trust Co. v. Carroll, (5 Barb. 649,) and holding that persons dealing with such corporation were bound to know the restrictions upon its powers.

In the second of such cases, in which, as I have stated, the same question was fairly and technically presented by the pleadings, it was again considered by the court. The learned judge who delivered its opinion, declared in, if possible, still more decided language, that such city corporation could “ make no contract' or-promise, express" or implied, except in-the manner and with all the formalities prescribed by the statute. Ho promise or engagement, or act of acceptance or ratification, by the officers or agents-of a corporation thus incapacitated, could render it liable or give to any one-a cause, of action "against it.” Adding, that a “ different doctrine would render void all attempts at legal restraint upon the conduct or acts of the defendants.”

It is true that in neither of such cases was the question directly discussed, whether the - statute under consideration, (1853,) from which the statute of 1857, in that respect, was copied, was absolutely ■ restrictive on the power of the city corporation to: make contracts, or only directory, and guarded by penal laws against officers who should violate or evade it. It was perhaps assumed that it was the former ; but whether this court was then right or wrong in that view, I do not consider that it is now at liberty to disregard such solemn and reiterated decisions, whether well or ill founded, or accompanied by the reasoning on which it was founded, or not.. The fact that other grounds were given in the first case for the. decision would not impair the authority of the second, sustained as it is by the necessity for such: decision therein, and by its own reasoning as well as that of such first casé.

That view óf the law would be decisive of this case, if furnishing gas for the public lamps be supplies furnished, within the meaning of the statutes of 1857 and 1861, to be contracted for by a proposal and bids, and a contract therefor is not excepted therefrom. But it is contended that some obligation was imposed upon the corporation to consume and pay for the gas of such company, and some correlative right vested in the latter-to furnish such gas, leaving the-value to be subsequently and . otherwise determined ; and that such obligation and right arose from the formation of the Harlem Gaslight Company under the general law for forming such companies. (Laws of 1848, ch. 37, § 18 ; 3 Stat. at Large, by Edmonds, 849,) the imposition on the city corporation, or the department of streets and lamps, by the charter of the former, or the amendments thereto of 1849, creating the latter, (Val. Comp. 260,) and those of 1857, (ut supra,) of the duty of lighting the city, and the license by the common council of such city to such company to lay main pipes to conduct gas for lighting lamps through a certain portion of such city, pursuant to the eleventh section of such general act; and that the provisions of the statute of 1857 and 1861, in regard to contracts before referred to, were not applicable to the mere determination of the value of the gas so to be consumed. The fact that the lowest price for all kinds of supplies necessary for the discharge of the duties of the city government is the main, if not almost the sole, object aimed at by the restrictions on the mode of making contracts prescribed by such statute, would be á complete answer to any supposed efficacy in dispensing with such restrictions, attributable to such an indefinite obligation or right; and the supply of that ingredient would be essential to make such an obligation so definite a contract as to be capable of being enforced in a court of law. But I have been unable to bring myself to the conclusion, that the mere imposition of a duty upon a municipal corporation to light public streets, accompanied by the grant of a power to it to license the laying of gas pipes in such streets by gas companies created under a general act of incorporation ; and the actual creation of a company under such act, and a license granted to it by such corporation to lay such pipes in a particular part of the city, either created any obligation by the latter to give to the former the exclusive privilege of furnishing gas to light that part of the city, or relieved such corporation from the duty of making such contract in the mode in which they would have been bound to make it, if the gas company had been a private individual, and the license to lay pipes had been granted by some other person or body. Such city corporation might, it is true, virtually create a monopoly by refusing to license another company to lay gas pipes as a competitor to the first; but it is clear it could not have the right to do so merely to prevent competition. Any abuse of its discretion in that respect, which is a public trust, if it could not be corrected by the courts, might be by the legislature. And although it may be a matter of mere form to advertise for bids, if all other licenses were refused, because but one bid could be "given, and that by the existing company, the publicity of the advertisement and bids might at least operate to call the attention of the public to their character. The members of the corporation might also, at least, determine whether an exorbitant demand should be complied with; for I cannot construe the statute of 1861, any more than that of 1857, as creating a contract ipso facto in favor of the lowest bidder, without the possibility of escape therefrom by the municipal authorities. A contract, at all events, so made, would be determinate. Any corrective for the greed of a company or the negligence or corruption of a municipal corporation might be left to the legislature. At all events, no court being at liberty to hold that a statutory form may be dispensed with because rendered in its opinion useless, the remedy is with that same body.

I do not perceive the analogy of the cases of The People v. Flagg, (17 N. Y. Rep. 584,) The Farmers’ Loan and Trust Co. v. The Mayor, &c. of New York, (4 Bosw. 89,) or Smith v. Mayor, &c. of New York, (21 How. 1,) to a case like the present, where the monopoly or exclusive advantages of the company are the result of the joint action or omission of it and the municipal corporation. The first of such cases was for work done; and was put upon the sole ground of the individual and peculiar skill of the party employed as a professional man, which would characterize his services, and could not be imparted to or employed or possessed by any other ; the second, upon the peculiar merits of a piece of land as a building site for a market; and the third, upon the ground of the suddenness of the occasion for the services to be rendered, and the impossibility of ascertaining beforehand their duration. There could certainly be no such peculiar quality in the gas to be furnished hy the company for lighting purposes, as to make it essential that its manufacture alone should he used. Ho peculiar mode of lighting the streets is imposed upon such municipal corporation as a duty ; and the latter; after ascertaining, without any advertisement for bids, that the only company in1 existence could not or would not' furnish .the gas at a reasonable price, are not debarred from adopting other methods of lighting the streets, in case a new company should not be formed. The duty was imposed before the company was created, and the regulation of its performance must be carried on without regard to the existence of" the latter, unless directly required bylaw to be contracted with for its performance. "

Another argument in favor of the company is drawn from a supposed irreparable- injury, in case -a contract for furnishing gas fór lighting the Streets in the district which it ’supplies, is not entered into with it.' If that be so, it clearly has the monopoly, and may dictate its own terms. The legislature, however, could not have intended to give it such power, at least so far as the first cited acts were concerned, or they ’would have done so in -express terms. Hone of their -acts aré tó be-construed as intended to produce that result, unless as an inevitable consequence. Remedies for want of light or substitutes for gas, however inadequate to take its place entirely, may always be provided. It is an alarming power tó be possessed by any one, to be able to prescribe on what terms an indispensable article shall be supplied, in consequence of their monopoly óf it. If they really possess it, a contract would be unnecessary; they only néed prescribe the terms in order to become entitled to them; I' do not, therefore!, think the argument ab incorivenienti sufficiently strong to take the case out of the statutes of 1857 and 1861. ■ ■ '

It can hardly be necessary to discuss the question whether gas is a supply, within the meaning of the statute. It must be equally so with any other illuminating, fluid, although gaseous in form and flowing "through pipes, instead of being carried in vessels and measured by a meter instead of a vessel of liquid measure. I can find, therefore, no reason for exempting the gas company in this case from being subjected to the statute of 1857 as to making a contract in the mode therein prescribed, if that is inevitable in all cases of supplies furnished. But even if it were otherwise, it would be difficult to establish, from the facts admitted in tins case, any contract by:the city corporation with the company, since such contract must be made either directly by the former or by agents ■ lawfully authorized to make the same, of neither of which is there sufficient evidence in this case.

With the exception of public lamps on the Eighth avenue, between Eighty-fourth and One Hundred and Twenty-fifth streets, which were ordered to be lighted since September last, no direct action was taken by the common council' of the city since their first contract of July, 1860, requiring lamps supplied by the company with gas under it to be continued to be so supplied. The materials for any agreement for that purpose, as detailed in the case submitted, consist of the ordering and furnishing by such common council, of lamps placed within the districts lighted by the company; and paying for their erection and for the gas consumed therein,'until the month of September last, at' a" rate-fixed by a -Written contract, which expired in July, 1860. During that month the public lamps in such district were lighted with gas furnished by the company, under the superintendence' and by the' direction of the superintendent of gas and lamps, during the parts of the day designated by the street commissioner. In August last, notice was given by the company of an intention to raise the price of such gas, after the 1st of September following, to that now claimed by them. I have not been able to satisfy myself that the connection of the lamps erected by the common council with the gas pipes of the company, and the payment by the former of bills for furnishing of such lamps with gas down to September, 1864, and the furnishing of such gas by the company, and lighting of such lamps subsequently, under the direction of such superintendent, would together create a direct contract by the city corporation with such company, to pay for the gas consumed during such month of September, at the rate mentioned in such notice, although admitted to be its reasonable value. Such first contract might possibly, upon the principles applicable to leases of houses or hiring of servants, or an established custom, be assumed tó be continued on the same terms. (Jackson v. McLeod, 12 John. 182. Anderson v. Prindle, 23 Wend. 616. Evertson v. Sawyer, 2 id. 507. Chitty on Cont. 20, 323.) But unless the goods furnished at the enhanced rate were actually received by the party to whom they were furnished, or their agents duly authorized for the purpose, after notice of such price, such party would not be bound for that price. In no case would previous express or implied contracts to pay at a different price bind the city corporation to pay at such enhanced price, and they may therefore be discarded as evidence of a contract at the latter price for September^ 1864.

The corporation of the city of New York cannot be said to have actually accepted and consumed the article in question, unless by authorizing its receipt and consumption by others. Although charged with the performance of public duties, and representing the public in their discharge, they are not so identical with that public, who enjoy the benefit of the consumption of the gas, and may thus be said to have received it, as to become liable by such receipt. For the benefit so received there is no mode of reaching such public by an action.

If, therefore, the gas was not to be considered as furnished under an implied contract at the same price as before, or any express or implied direct assent of such corporation to a new price, the superintendent of lamps derived no new power to bind the corporation for such price from any previous consumption of gas without a contract, and payment of a ■ less price, since all the power he had was derived from the recent statutes altering the city charter. He was not an agent of the corporation as an artificial person or body corporate ; but only of that portion of the public who might inhabit, and be liable to taxation in, the county of New York, pursuant to authority delegated to him by statute. (Darlington v. The Mayor, &c. of New York, 31 N. Y. Rep. 164.)

By the amendments of the city charter in 1857, (Val. Comp. 268,) thé legislative power only of the body politic known as “The mayor, aldermen and commonalty of the city of Mew York," was vested in a common council, an elective body, (§ 2 ;) its executive power in a mayor, also elected by the people, and executive departments, (§ 16,) composed of various officers, some of whom were elected, (§ 19,) and some appointed, (Id.;) such executive department have various duties assigned to them, (§§ 22 to 29,) and their heads are to be appointed by the mayor, with the consent of the board of aldermen, (§ 19 ;) in several departments, (including the street department, (§ 23,) bureaux are created, (§§ 22, 23 to 28,) whose chiefs are to be appointed by the head of the department; (§ 21,) the power of creating other bureaux besides those specially named, is delegated to the common council of such city, as well as that of assigning to them and to the departments and bureaux thereby created, duties not inconsistent with that act, (§ 28.) Such statutes also directed the duties of such bureaux and departments to be performed according to the laws, charter, and ordinances of such city (Id.) Among such executive departments is “ the street department," to have cognizance, among other things, of “ lighting streets, roads, places, and avenues." A bureau in such department is called that “ of lamps and gas,” and its chief officer “ superintendent of lamps and gas,” • (§ 23.) The common council of such city, in their legislative capacity, discharged the duty devolved on them by such statute, of assigning to various departments, including the street department and its various bureaux (including that of “ lamps and gas,”) various duties in regard to the matters placed under their cognizance by such statute, bypassing various ordinances in relation thereto. Such ordinances were revised and repassed in the year 1859, and the duties and powers of the street department and bureau of lamps and gas are to be found in the first, second, and ninth articles of the fourth chapter of that collection. By them, such department was to have cognizance of the same matters as was prescribed in the twenty-third section of such statute, as well as doing and furnishing all necessary work, repairs, and supplies, not provided for. in other departments. (P. 79, § 1.) The chief officer of it,: (street commissioner,) was to have general charge and direction of all matters intrusted to it.' (P. 80, § 3.) He is required to make all contracts for “ work, material, or supplies/’ relating to any of the matters under the ^cognizance of his department. (Icl: § 5.) But all expenditure over a certain sum ($250) is forbidden to be made for any work or supplies within such cognizance, unless authorized by the common council. ■ (Id. § 6.) The bureau of lamps and gas1 is also thereby charged with the duty of superintending the lighting of the public streets, and the constructing of, and procuring necessary supplies and fixtures for public lamps. (P. 98, § 77.) The head of it (superintendent) is required to take charge of,, and superintend" the lighting of such lamps, (p. 99, § 80 ;) to report to the street commissioner " violations -of contracts ■ for supplying the city with gas for such lighting, (Id. § 82,): and to be under the control of such commissioner generally, in all matters connected with his bureau. (P. 100, § 87.) The statute of 1857 also forbade the incurring of any expense by- any- department or officer, whether ordered by the common council'or not, without' a previous appropriation to cover it. .

It seems to be settled by the recent cases of Darlington v. The Mayor, &c. in the Court of Appeals, supra, that the corporation of the city of New York is in no sense a private one, except- so far as it can take, hold, or transfer property, and then only as the: representative of the; state; of course, with the samé rights and liabilities in relation thereto as other owners. (Brower v. The Mayor, &c. 3 Barb. 254. Lacour v. Same, 3 Duer, 406.) Its “boards ‘of aldermen and councilmen and other Officers ” are, in the prevailing opinion in that cáse, declared to' be-' “as truly public officers as the boards of supervisors and sheriffs'and clerks of counties'.” The devolution upon the street commissioner and chief of the bureau of lamps and gas of the duties prescribed in the statute of 1857, or ordinances made ini pursuance thereof, rendered" them also, as to such duties, quasi civil and public officer's, and not mere servants of the corporation. (Martin v. The Mayor of Brooklyn, 1 Hill, 545.) .. How far by such devolution the corporation was relieved from any liability, by indictment or action, for the non-performance of such duties, may be still an open question. (Martin v. Mayor, &c. of Brooklyn, ubi sup. Weet v. Trustees of Brooklyn, 16 N. Y. Rep. 161.) Such powers may be concurrent, and. the exercise of them by either may relieve the other from all liability for non-performance. At all events, the discharge of such duties by the proper officer would not be, in any case, so far the result of his being an agent of such corporation, as to confer on him, as such, additional powers, not expressly granted, although their exercise might be necessary for the performance of such duty. In other words, the duty of superintending the lighting of public lamps would not carry with it the right of making contracts binding such corporation for furnishing an illuminating fluid.

The “ procuring all necessary supplies ” for public lamps by the superintendent of lamps and gas in section seventy-seven of the fourth chapter of the corporation ordinances did not refer to gas, as is evident by reference to the fifth, sixth, and eightieth sections of the same chapter. The first of those sections requires contracts for any supplies to be made by the street commissioner ; the second forbids any expenditure for supplies unless authorized by the common council, or the expense does not exceed two hundred and fifty dollars ; and.the, third requires the superintendent to keep such supplies in a place to be prescribed by a street commissioner.

Whether, therefore, the superintendent of lamps and gas was a public officer, whose power and. duties were limited by statute, or was an agent of the corporation whose authority was limited by such ordinances, he was not authorized to make any contract for furnishing gas, and any supposed consumption by him of that furnished by the Harlem company, by the lighting of burners of lamps through which it flowed, could not be an acceptance by the city corporation. The resolution of the common council passed after the month of September, 1864, for lighting lamps- in the Eighth avenue from the gas of the company in the. same manner as the other street lamps in such district, could not be construed into a ratification of the previous • consumption of gas in lamps so previously lighted during that month. And there was no such other evidence of such ratification as to bring this case within those of Peterson v. The Mayor, &c. of New York, (17 N. Y. Rep. 449,) and The People v. Flagg, (Id. 584,) where the contracts of agents, or their fruits, were directly adopted or received by the corporation, with full knowledge of the nature of the contract.

I think, therefore, judgment should be given for the defendants, with costs.

J udgment for the plaintiffs. .

Case Details

Case Name: Harlem Gas Light Co. v. The Mayor, Aldermen & Commonalty of the City of New York

Court Name: The Superior Court of New York City

Date Published: Mar 4, 1865

Citation: 3 Rob. 100