McMullen v. Hopper

O’Brien, J.:

The plaintiffs sued upon four causes of action, one of which was admitted, and under the other three they were allowed to recover. The single question arising upon the referee’s rulings, which requires discussion, relates to his holding that the plaintiffs were entitled to re cover §37,079.97, included in their undivided first cause of action, which was fifteen per cent reserve on plaintiffs’ entire work. It is not disputed that the work has been done to the satisfaction of the chief engineer, and that the plaintiffs will ultimately be entitled to recover the amount in question. It is insisted, however, that the action was prematurely brought, the defendant claiming that at the time of the commencement thereof the plaintiffs’ work had not been accepted by the chief engineer in charge of the work under the city contract, and that the plaintiffs were not entitled to the fifteen per cent reserve until thirty days after the completion of the entire city work; and that, conceding the plaintiffs to be entitled to the percentage within thirty days after acceptance of their particular work, they failed to show an acceptance thirty days prior to the bringing of this action. The plaintiffs, on the other hand, claim that by the terms of their contract they were not obliged to wait until the defendant received the fifteen per cent reserve from the city, but that they were entitled to this “ on or before thirty days after ” the city’s engineer had accepted their work; and that the latter had accepted it more than thirty days prior to the commencement of this action. If the defendant’s construction of the contract is right, that the percentage reserved was not payable until thirty days after the completion of the entire city work, as this was not completed when the action was commenced, then the action was prematurely brought. The determination of this question necessarily involves the construction of the contract between the parties ; and as this was subsidiary to the main one between the defendant and the city, the latter contract may be referred to for the purpose of making certain what the parties meant by the language used in the contract between them.

Upon the question of payment it was provided in the contract between the defendant and the city as follows: “ The engineer shall, from time to time, as the work progresses, but not often er than once a month, make an estimate of the amount of work done under this contract since the last preceding estimate was made, and of the value thereof, according to the terms of this contract. Upon such estimate being made eighty-five per cent of such estimated value shall be paid to the said party of the second part. And whenever, in the opinion of the said engineer, the party of the second part shall have completely performed this contract on his part, the said engineer shall certify the same in writing, to the commissioner of public works, together with his estimate of the whole amount of materials furnished and work done in such performance by said party of the second part, and of the value of such work and materials under and according to the terms of this contract. Thereupon the parties of the first part will, on or before the expiration of thirty days after such completion and the delivery of said certificate, pay * * * to the said party of the second part, in cash, the whole amount of money accruing to the said party of the second part under this contract. * * * ”

The contract between these parties recites the fact that a contract had been entered into between the defendant and the city; that the plaintiffs offer to do a portion of the work, and that said bid has been accepted. Then follows the agreement of the plaintiffs to perform, under tlie direction of the engineers employed by the mayor, etc., “ and in conformity with the plans and specifications referred to in said contract, all the pnemnatic worh * * * described,” etc. Upon the question of payments the provision is as follows: “ Payments to be made monthly, at the times and in accordance with the provisions of the said contract between the party of the first part and the city of Hew York, excepting that the payment of percentage reserved shall be made on or before thirty days after the work embraced in this contract shall have been accepted by the chief engineer in charge of the said city contract.”

By the terms of both contracts the monthly payments are to be made at the times and in accordance with the provisions of the city contract; but under the McMullen-Hopper contract, which is the one here involved, the reserved percentage is specially excepted from the provisions of the city contract. That this difference exists in the contracts is conceded, the provision in the city contract as to the payment of the reserved percentage being expressly excepted from operation in the McMullen-Hopper contract. It is contended by the defendant, however, that all the provisions of the city contract relating to the payment of the reserved percentage are effective against the plaintiffs up to and including the final certificate of the chief engineer, after which final acceptance plaintiffs are relieved by the exception in their contract, and that the purpose intended to be served by this exception was to relieve the plaintiffs from that part of the city contract which, after directing the payment, provided “ that nothing herein contained be construed to affect the right hereby reserved, of the said commissioner to reject the whole or any portion of the aforesaid work should the said certificates, or any of them, be found or known to be inconsistent with the terms of this agreement, or otherwise than properly given.” To relieve the plaintiffs from this provision, it is insisted, was the only object of incorporating, in the McMullen-Hopper contract, the exception as to the reserved percentage. This is a concession that the plaintiffs were not to be affected by a rejection of any portion or the whole of the work by the city. And it is clear, therefore, that, as no final certificate would in that event be given, it was not intended. to have the plaintiffs’ right to the reserved percentage dependent on the final certificate.

Apart from the inconsistency involved, we think that such a construction is not only strained, hut, in view of the attitude of the parties and what they were contracting about, does violence to the language used. The defendant had taken a contract for the construction of the entire bridge and had sublet to the plaintiffs “ the pneumatic work,” which involved that portion of the work under water and in connection with the piers and abutments which were to sustain the superstructure of the bridge. Both contracting parties knew what the testimony here shows, and, therefore, it is to be presumed that it was within the contemplation of the parties, when contracting, that after the pneumatic work was completed it would require two years or more to place the. superstructure thereon and complete the bridge. The pneumatic work was a complete thing in itself, and might well, have been the subject of an independent contract by the city, because in no way would it interfere with the details of the other portions of the work connected with the superstructure, which latter could not be even commenced until the pneumatic work was completed. Under the defendant’s construction the plaintiffs would be obliged to wait two years or more before receiving their money, although they had done their work to the satisfaction of the chief engineer, and it had been examined and accepted by Hopper. It was to avoid any such result that the contract in words and terms provided that the work should be accepted, and the payment of the reserved percentage made on or before thirty days after the work embraced in the contract between the plaintiffs and the defendant should have been accepted by the chief engineer in charge of the city contract. Because, as we must observe, the exception removes the reserved percentage from the operation of the terms and provisions of the city contract, and the work to be accepted is that embraced in the McMullen-Hopper contract, and not that in the city contract — the language being, “ the work embraced in ¿Ms contract shall have been accepted,” etc. As correctly urged, therefore, by the respondents, if it had been intended that the payment for the plaintiffs’ work should not be made until the city contract was performed, this exception would not have been made as to the reserved percentage, and a separate certificate as to this work would not have been required. It must be remembered, moreover, that the completion of the city contract was something over which the plaintiffs had no control. The defendant might abandon the work under the city contract before completion, and never complete it. Hence, this clause was inserted, providing a different method of payment under the McMullen-Hopper contract from that provided in the city contract as to the reserved percentage.

In cases of doubt we have frequently resorted to the construction which the parties themselves have given to the language used. The plaintiffs concededly completed their work in September, 1895, which was more than thirty days before this action was commenced. At that time the city’s engineers measured up the work and made and delivered a certificate to the defendant covering, with other work, the entire amount of work called for and to be done by the plaintiffs under their contract. Thereafter the plaintiffs went to the chief engineer and asked him if the work was satisfactory and if he would accept the same, and to both he assented. The chief engineer testified that in September the work was completed; that he ordered it to be measured up and made a decision accepting- the work, which had never been set aside. It is true that the McMullen-Hopper contract did not provide the manner or form in which the work of the plaintiffs should be accepted by the chief engineer. It did not provide that such acceptance should be evidenced by a certificate or by any instrument in writing. It simply provided for payment thirty days after acceptance. Great stress is placed upon this omission as tending to show that the word acceptance, as used, was equivalent to the requirement of a written certificate at the time and in the manner provided for in the city contract.

It is contended that by the city contract the chief engineer was not obliged and had no right to bind the city by accepting the plaintiffs’ work, there being no provision for his giving a separate certificate, and further that the city would not be bound by any acceptance prior to the final certificate of the chief engineer. All this turns upon the one central idea, that the final certificate of the engineer as provided for in the city contract was not only a condition precedent, but a sine qua non to the plaintiffs’ recovery of their portion of the reserved percentage. To such an argument there naturally occur two answers : One furnished by the contention of the defendant, who, in explanation of the difference between the language used in his contract with the plaintiffs and that in the city contract, states that it was intended to prevent the plaintiffs being affected in any way or delayed by reason of the refusal of the chief engineer to give the final certificate in case he should reject any portion of the work other than that performed by the plaintiffs. The defendant concedes that, as he understood it, if the work was completed and a dispute should arise, not with reference to the plaintiffs’ work, but in regard to defects in the superstructure, from which there might result a refusal on the part of the chief engineer to furnish the certificate, under the language of the McMullenHopper contract, the plaintiffs would be entitled to recover. This seems to us to be a concession that, whatever the importance and weight to be attached to a final certificate as between the defendant and the city, it was not to figure so prominently or play any such significant part in determining the plaintiffs’ right to their portion of such reserved percentage.

Again, we think that an argument which would hold the plaintiffs rigidly to the terms of the contract between the defendant and the city, over which they had no control, proceeds upon an entirely erroneous theory. The parties, as between themselves, were perfectly competent to enter into a contract for any specific portion of the work, to be paid for by the defendant irrespective of when, according to the terms of his contract with the city, he was to receive payment for the same work, and they could have agreed as to any means of determining whether the work was satisfactorily done, and could have left it, as they did here, to the judgment of the chief engineer. That the latter understood that, under the McMullen-Hopper contract, the acceptance of the plaintiffs’ work was left to him, clearly appears from the certificate which he actually did give and from his testimony. In addition, we have the certificates of the other engineers upon the work and of the city officers, which covered the entire amount of the plaintiffs’ work. And even though we assume that the city would not be bound by any acceptance of all the engineers on the work and by the certificates of the city’s officers in charge of it prior to the final certificate of the chief engineer and the department of public works, this at most would be a question between the defendant and the city under the city contract, with wiiich the plaintiffs had nothing to do, over which they had no control, and by which they were not bound except so far as they contracted to be bound. As already said, without regard to the terms of the city contract, the plaintiffs and defendant could contract in reference to some portion of the work, and if the plaintiffs fully performed such contract, and after its completion secured the acceptance of the one who by the terms thereof was selected by both parties as the arbitrator, then, having fulfilled all conditions, they would be entitled to recover.

And, in addition to the practical construction placed upon the contract by the plaintiffs and the chief engineer and city officers, we have a letter of the defendant, dated October 7, 1895, which is significant as to the view which he took, and which was written after the city estimates had been made by the engineer, as follows: “ As I received a check from the city to-day for September estimate on Third Avenue Bridge, please send me statement of your account. I would like to clean up with you this time if I can.” While, therefore, we think that the language of the McMullen-Hopper contract expressly excepts the reserved percentage from the provisions of the city contract, and provides that payment shall be made when the plaintiffs’ work shall be accepted by the chief engineer, all doubt as to the true construction is removed by the practical construction given to this language by all the parties.

To say that the exception as to payment of the reserved percentage is to be read as though the contract stated that such payments were to be made as provided in the city contract, would render this clause meaningless ; for, instead of making an exception as to the payment of the reserved percentage for the work embraced in “ this contract,” it would thus be made to read that such payments should not be excejffed, but should be made in the manner provided for in the city contract.

As in our view, therefore, the parties intended to be bound by the determination of the chief engineer, the question litigated as to the acceptance by him was, upon the conflicting evidence, one of fact. It is not disputed that the work was completed in September, or that certificates were then given by the city to the defendant, covering all the work embraced in the plaintiffs’ contract. Upon the question of the actual acceptance of the work, it was shown that the engineer ordered the succeeding work upon the contract to proceed, which impliedly involved an adoption of the plaintiffs’ work. In addition, there was evidence tending to support a verbal acceptance by the chief engineer. As against this, upon the question of the date of actual acceptance, we have the letter of the chief engineer to the plaintiffs, dated March 13, 1896, in which he says: “ The work was accepted by the chief engineer, December 1st, 1895.” With much plausibility, it has been suggested that the acceptance in December, referred to in the letter, was an affirmance only of an acceptance made in October, 1895, not involving in any manner the work, but a reclassification of items involving about fifty or sixty dollars. As we have said, therefore, upon this evidence as to the date of actual acceptance, there was a conflict which the referee has resolved in plaintiffs’ favor, and as against the view taken by him, the evidence is not so preponderating as to justify our disturbing his conclusion.

In this connection our attention is called to the ruling of the referee in preventing the chief engineer from stating the date of actual acceptance. If we assume that the statement thus offered was not a conclusion to be drawn from all the facts, and that its. rejection was erroneous, this would not justify our reversing this judgment, because what was said and done by the engineer, bearing upon the question of acceptance, including his own examination upon that point, was fully gone into ; and if he had, in answer to the question, given December first as the date of acceptance, which was the one fixed by his letter, it would still have left the question one of fact. The verbal statement .by the engineer, however, that the date was December first — assuming that that would have been his testimony — would make the case no stronger than it was by the introduction of his letter, the force of which is to be measured, not by his verbal assertion alone supporting that date, but by what he said and did with respect to an actual acceptance.

The other items included in the judgment are fully discussed by Mr. Justice Ingraham in his opinion, and in his conclusions thereon we concur.

The judgment should be affirmed, with costs.

Van Brunt, P. J., and Williams, J., concurred; Ingraham and Patterson, JJ., dissented.