Opinion
September Term, 1865
William F. Allen, for the appellants.
Henry P. McGoun and Henry H. Anderson, for the respondents.
From the facts conceded in the case on which the question is submitted, the law implies a contract between the parties which it is the duty of the courts to enforce, unless the liability be one of those which the municipal authorities are disabled from incurring in this form, by some statutory prohibition.
It is claimed that this was the case of a contract for supplies, to be furnished for a particular purpose, and involving an expenditure of over $250; and that it therefore falls within the inhibition of the amended charter, which prohibits such contracts, unless executed in duplicate by the appropriate heads of departments, in favor of the lowest bidders, on advertisement for sealed proposals. (1 Laws of 1857, p. 886, § 38; Laws of 1853, p. 412, § 12, repealed by § 54 of the act of 1857.)
The contract in question is not within the legitimate scope and intent of these provisions in the amended charter. They were designed to regulate contracts for the performance of work and the purchase of supplies. The gas was manufactured by the company for itself, and not for the corporation. It never became the property of the city by purchase, in the sense applicable to ordinary supplies. The contract, though spoken of in a loose and general sense as one for the sale of gas by the company, was in substance and effect an agreement, that the city authorities should have the privilege of using the property of the plaintiff, for the purpose of lighting the streets and avenues in a particular district, to such an extent as, in the judgment of the common council, the public necessities might require. To extend the provisions of this section of the amended charter to such a case, in disregard of the manifest purpose of the enactment, would involve a departure from the familiar rule, that general words are to be restrained in their application, to the subject matter in reference to which they are employed. ( People v. Flagg, 17 N.Y., 587; Breasted v. The Farmers' Loan Co., 4 Seld., 299; Farmers' Loan Trust Co., 4 Bosw., 89.)
In the present case, an adoption of the construction claimed by the municipal authorities would lead to the absurd conclusion, that the legislature designed to force a provision into the city charter, compelling the corporation to pay whatever price the sole bidder might choose to exact in his sealed proposals, for the use of property in which he has an absolute monopoly, and in relation to which there can be no competition within the range of legal possibility.
The only remaining question is, whether the written contract between the parties, which expired on the 9th of July, 1859, and which, by its terms, was applicable only to the year then ending, continues to operate proprio vigore on all their subsequent contracts, springing from the facts by implication of law. There is nothing in the case to bring it within the exception to the general rule, that an agreement becomes functus officio when the purposes for which it was concluded have been accomplished. The contract was not in its nature one running from year to year; and no inference is deducible from the authorities which would warrant the courts in engrafting the rates it prescribed on subsequent contracts between the parties, as in the exceptional cases of a continuing relation, like that of master and servant or landlord and tenant. The defendants are liable for the value of gas they used; and they cannot claim the benefit of an agreement, made when its value was less, and which neither party chose to renew.
Under the internal revenue act, the plaintiff is also entitled to recover the amount of the duties imposed by the government, on the gas consumed by the corporation. Ordinarily, the producer cannot transfer to the consumer his share of the public burdens imposed by law in respect to the profits of his business. But an exception to the general rule was made by act of congress in favor of those engaged in the manufacture of gas. (Statutes at Large, 1864, p. 264, § 94.)
The judgment should be affirmed.
The Harlem Gaslight Company was incorporated in February, 1855, under the general law for the formation of gaslight companies, and on the 15th of April, thereafter, it obtained from the mayor and common council of the city of New York the right to lay its conductors for conducting gas through the streets, avenues, lanes, c., of the city above 79th street, upon certain conditions expressed in the resolutions of the common council of that date. One of these was that the company should proceed immediately, or within one year from the time of the adoption of the resolutions, to lay down their mains in the district embraced in the grant, and supply, at least within two years from that time, gas to be used by the corporate authorities of the city and private consumers. The mayor and common council also reserved to themselves the right to revoke the permission granted by the resolution upon the happening of certain contingencies therein mentioned. The mains or conductors were laid down and the street lamps erected and gas furnished as prescribed in the resolution. On the 9th of July, 1858, an agreement for one year was duly made between the gaslight company and the city corporation, by which the latter had the right to order the mains of the company to be extended in and along all the streets, avenues and public places in the district, and the company were also required to attach their pipes to and prepare for lighting the public lamps placed in such streets by the corporation, and the company were to receive from the corporation, for gas consumed in such public lamps, the sum of $28.80 for each lamp, allowing 3,800 hours per annum for each lamp, and a pro rata price for such additional hours as the same should be kept lighted by direction of the corporation. No written agreement was made between the parties since that date, but the common council, since that time, have ordered public street lamps to be placed by the company in different parts of the district. The corporation has also furnished such lamps and paid for their erection, and caused the same to be lighted, and paid for the gas consumed therein at the rate specified in the agreement of 1858, in monthly payments as the bills have been rendered. There is no other gaslight company having mains or pipes laid in the district north of 79th street. There are other companies furnishing gas in the city, but they are confined to particular districts, and no company or person could enter into competition with the Harlem Gaslight Company in furnishing the light in question. From the organization of the company to the present time, the public lamps within the district have been lighted under the direction of the superintendent of gas lamps, at hours designated by the street commissioners by direction of the common council, which, until September, 1864, has been paid for by the common council upon demand, from time to time, from moneys authorized by the legislature to be raised by taxation. In 1864 like authority was given by the legislature to raise in like manner $430,247, for purchasing, repairing and maintaining public lamps in the city, and the same was raised and appropriated by the common council for that purpose. On the 22d of August, 1864, the company caused to be served upon the corporation a written notice that the company would, on and after the 1st day of September, 1864, charge the city at the rate of $50 per annum for each and every street lamp lighted by the company in that portion of the city north of 79th street. No formal action was taken by the common council upon the subject, but during all the month of September, 1864, the street lamps in the district, 3,129 in number, were lighted as usual under direction of the city authorities. The gas consumed in such lamps for the month mentioned, was 2,884,155 cubic feet, of the value of $13,037.50, at the rate of $50 per annum for each lamp. This sum (which by stipulation is agreed to have been the fair value of the gas at the time it was furnished) the corporation refused to pay upon demand, and therefore the parties submitted the questions arising upon the foregoing facts, in a case made pursuant to section 372 of the Code, to the Superior Court of the city of New York, which rendered judgment for the plaintiff, from which the defendants appealed to this court.
The power and duty of the municipal government to furnish light for the streets and avenues of the city, is not disputed or put in controversy in this action. Indeed it could not be with any show of reason or good sense. In our northern latitudes, when darkness prevails over half the 24 hours for a large part of the year, light diffused through the public streets and avenues is a predominant and urgent necessity which no well governed city can do without. This beneficent application of artificial light is one of the distinguishing characteristics between the city of modern times and those of the middle ages, when darkness reigned supreme for no inconsiderable portion of the time, broken only to become more visible by the occasional torch of the linkboy or the lantern of the solitary watchman. The modern gaslight, diffusing its rays over every part of the public thorougfare, is a source of pleasure and comfort and convenience, as well as a security against crime and disorder which no other agency can supply. It is indispensable at all times, and no municipality can be said to be well governed which is not able to command its presence under all circumstances. Nor can it be maintained that a municipal corporation may not be made liable like a natural person upon an implied assumpsit, unless the general rule is modified and changed by some positive legislation. Such corporations are in constant and daily need of innumerable things which cannot well become the subject of an express contract, and unless the general principle for the better security of the city has been restrained or modified, the corporation must be held liable upon an implied promise to make adequate remuneration upon a quantum meruit or quantum valebat, as the case may be. The counsel for the defendants concedes all this, but alleges, in defense of the action, that the general rule before stated has been modified in its application to the city of New York by the 38th section of the act of the 14th of April, 1857, to amend the city charter, and the first section of the act of the 18th April, 1861, in regard to contracts by the mayor and common council. The first of these declares, amongst other things, that "whenever any work is necessary to be done to complete or perfect a particular job, or any supply is needful for any particular purpose, which job is to be undertaken or supply furnished for the corporation, and the several parts of the said work or supply shall together involve the expenditure of more than $250, the same shall be by contract under such regulations concerning it, as shall be established by ordinance of the common council, unless by a vote of three-fourths of the members elected it shall be ordered otherwise." And the other provision referred to directs, that "all contracts by or on behalf of the mayor, aldermen and commonalty of the city of New York, shall be awarded to the lowest bidder for the same respectively, with adequate security, and every such contract shall be deemed confirmed in and to such lowest bidder at the time of the opening of the bids, estimates or proposals therefor, and such contract shall be forthwith duly executed in the name of the mayor, aldermen and commonalty by the head of the department having cognizance thereof, with such lowest bidder." Whenever the expenditure is to exceed $250, bids must be invited and competition induced, and the furnishing the labor, supplies and materials are to be awarded to and a written contract entered into with the lowest bidder therefor. If the statutory provisions I have quoted are to have a literal interpretation, and be made to apply to every possible service and supply furnished the city, then the plaintiff cannot recover for the gas furnished, because that article would be included in such a wide and extended construction; and then it would also follow that the corporate authorities have been in the habitual violation of the statutes, with the sanction of the legislature, since the 9th of July, 1859, and exposed to the penalties provided in another section of the act of 1857. ( Brady v. The Mayor, c., 20 N.Y., 312.) The question occurs, however, whether the acts referred to are to have such a construction as to include any possible kind of service, and of property and supplies which the city in its vast and varied operations may need. The purpose of the statutes is to insure economy in the public administration, and honesty, fidelity and good morality in the administrative officers. Competitive offers or bids have no other object but to insure economy and exclude favoritism and corruption in the furnishing of labor, services, property and materials for the uses of the city. This was the purpose and the only purpose of the framers of the statutes, and when they have this effect given to them, nothing further is needed. They are not to have such a construction as to defeat this purpose, to impede the usual and regular progress of the public business, or to deprive the inhabitants, even temporarily, of those things necessary and indispensable to their subsistence, their health, or the security and protection of their persons or property. Contingencies may arise when services, materials and property, above the prescribed value, may be immediately needed, and where competitive offers and written contracts would be unserviceable or impossible. In such a case the statutes would not apply, because such application could not have been intended. Whenever the nature of the service, or of the property needed for the public uses, or the time within which it must be had to prevent irreparable mischief under competitive offers is impossible, then the provisions of the acts referred to cannot apply, because such could not have been the intention of the law makers, and such emergencies were not amongst the mischiefs which the provisions referred to were designed to correct. The city needs lands in a particular locality for a public market, an engine house or other public building. It requires professional services, those of an engineer, a physician, a lawyer or an artist, or it may require services of any kind, and property to be furnished upon a sudden and unforeseen emergency, of greater value than the $250. If these things can only be obtained through the forms prescribed by the statutes, they cannot be obtained at all, for these things cannot become the subject of a competitive offer to be consummated by a written contract with the person making the most favorable offer. To this effect are the remarks of Judge COMSTOCK, upon the sections of the statutes referred to in the case of the People v. Flagg ( 17 N.Y., 584), and seem to me to be marked by reason and sound sense, and commend themselves as expressing the true construction of the legislative intention. In the case we are considering, the case shows that the plaintiff's mains and conductors were the only things of the kind laid down in the streets of the city north of the center of 79th street, and that there was no other individual company or corporation having the ability and the means to supply the city with illuminating gas to light the streets. Knowing this, the common council, in granting to the Harlem company the privilege of occupying the streets with their mains, did so upon condition that the latter should supply the streets of the city with gas for street purposes, within two years from the time of the passage of the resolutions. This condition is wholly inconsistent with the idea of competition from several bidders, and the contract awarded to him whose offer was the best for the city. Had the common council, in place of this condition, invited proposals in the usual form, there could have been but a single offer at best, and the provisions of the statutes would have failed of effect because they were not applicable to such a subject. I lay no stress upon the implied sanction given to the transaction between the company and the city corporation for furnishing gas by the legislative appropriations of moneys from year to year, to pay the identical bills in controversy because I think I see a way clear enough to such a construction of the statutes as shall give them all the effect their authors intended, and at the same time save the city from the consequences of applying them to subjects where, from the nature of things, there can be no competition.
The judgment of the Superior Court should be affirmed.
All the judges concurring,
Judgment affirmed.