Alfred Nathan, Appellant, v. John H. O'Brien, as Commissioner of Water Supply, Gas and Electricity of the City of New York, and Others, Respondents

Alfred Nathan, Appellant, v. John H. O’Brien, as Commissioner of Water Supply, Gas and Electricity of the City of New York, and Others, Respondents. First Department, February 25, 1907. Municipal corporations —proposals for contract for pumping engines — requirement that bidder give evidence of ability to perform — when interested taxpayer cannot restrain acceptance of bid. A provision in proposals for a municipal contract for primping engines that the bidders shall give Satisfactory evidence that they have built the .type of engines required and are able to complete the work as specified, is for the benefit of the city and intended to exclude irresponsible bidders unable to complete the contract. It is not for the benefit of other or higher bidders, nor does it, bind the city to reject bids because the bidder does not fully comply with the expresk1 , requirements as to proof of ability to perform. .. Thus when the Icwest" bidder has permitted the city engineer to .investigate the ’ pumps supplied by it to other public works, and the municipal authorities decide to. accept the bid; a taxpayer who is connected with a bidder $68,000 in excess of the bid accepted cannot enjoin the letting, of the contract on the ' theory that the lower bidder did not give adequate proof of ability io perform, ■ where there does not appear to be any other person who refrained from bidding by reason of the provision aforesaid. • ■ Taxpayer’s" actions are brought to allow the illegal acts of public Officials to be controlled by courts and to .protect the corporation. They are not allowed for .the. purpose of enabling corporations or individuals to require the award of a public contract on bids _in excess of those made by other competent and responsible bidders. _ • „ ' When it appears that such action is not brought for the interest of the municipality but for the ulterior purpose of imposing an additional burden on the municipality by an interested taxpayer, a court of equity will not enjoin the ' letting of a contract to a bidder who is responsible. Appeal by the plaintiff, Alfred Hath an, from an order of the Supreme Court, made at the Hew York Special Term and entered in the office of the clerk of the county of Hew York on the 24th day of December, 1906, denying the plaintiff’s motion to continue pendente lite an injunction theretofore granted herein. Samuel Untermyer, for the appellant. Theodore Oonmoly, for the respondents O’Brien and the City of Hew York. ' Henry JD. HotehMss, for the respondent Davis & Farnum Manufacturing Company. [MAJORITY — Ingraham, J.:] Ingraham, J.: The defendant O’Brien, as commissioner of water supply, gas and electricity of the city of Hew York, advertised proposals for bids to furnish four pumping engines for the city of Hew York. The advertised proposals for bids provided.that “ Each bidder shall submit with his bid or estimate evidence that will prove to the satisfaction of the Commissioner that he is prepared to furnish all the necessary materials, possesses the necessary plant and means, to completé all the work in the manner and time herein specified. Heither experimental nor unused types of engines will be accepted. Each bidder must be able to prove that he has built vertical engines, either triple or compound, with cylinders supported either on single ‘A’ frames or double ‘A’ frames. These engines shall be of the same general type, although not necessarily of the same capacity as the engines he proposes to furnish, and the bidder shall state where these engines have been or are being installed.” Several bids were received, of which the bid of the- defendant Davis & Farnum Manufacturing Company was for $340,000, the lowest that complied with the proposals. The next bid was for $348,000, but that bid was withdrawn, and then came a bid of the Holly Mann-factoring Company of Buffalo, Hew York, of $408,000, $68,000 in excess of the bid of the Davis & Farnum Manufacturing Company. Other bids were received which were ■ higher. These bids were opened on July 25, 1906. After the bids were received the Davis & Fárnum Company Was required to produce the proof required in the proposals for bids.. The engineers of the city of New York visited their manufacturing ■ establishment and investigated the pumps that they had supplied for other public works, and Upon the report of the engineers the commissioner decided to accept the bid of the' defendant Davis' & Fárnum Manufacturing' Company. Whereupon - a taxpayer who was connected with the next highest . bidder,- $68,000 in* excess of the bidder whose bid was accepted-commenced this action as a taxpayer to restrain the city from awarding the bid to7 the lowest bidder upon the* ground that the. bidder whose bid was accepted did not furnish the.proof which should have satisfied the commissioner as to their ability to.furnish the engines, or that it had 'neyer built vertical engines, either triple or'com*'pound, with cylinders supported - either on single “A” frames or double “ A ” frames. - - Thus, a taxpayer, Under statutes (Code Civ. Proc. § 1925; Laws 1892, chap. 301; Greater N. Y. charter [Laws of 1901, chap. 466], § 59) which authorized a taxpayer to apply to tlie court; to prevent waste or misappropriation of the city’s money or property, seeks to prevent the city from making a contract with a bidder, who was required to .give a bon'd in the sum of $250,000 to secure the faithful performance of. its contract, so that the city will be compelled to purchase of a corporation with which the taxpayer is connected, the same property and pay $68,000 more for it. All this' is done in the interest of the taxpayers and the. city. This particular taxpayer, assumingly acting for the benefit of the corporation with wliich lie is connected, seeks to .use statutes which are designed for the protection of' taxpayers and municipal corporations to impose upon the municipal corporation an expenditure of $68,000 more- than the city will have to expend if the contract based upon the accepted bid is completed. The plaintiff, upon these - facts, comes into a.court of equity and asks tha¡t the court enjoin ,the city and the city officials’ from making "what, they consider an advantageous contract because the lowest bidder has. not produced to the commissioner evidence which should satisfy him that _ it is able to perform its contract. These provisions in the proposals are for the benefit of the city and to exclude irresponsible bidders who are unable to complete such a contract if it should be awarded to them. It is not for the benefit ■of other or higher bidders; nor does it purport to bind the city to reject any bids of persons who do not fully comply with the proposals as to the nature of the proof that is to satisfy the commissioner. It is claimed that.the city has been injured because many "other bidders who could not,furnish the proof to the commissioner that he required were prevented from bidding and that it was, therefore, a fraud upon all the bidders and a fraud upon the city to insert such a provision unless the commissioner intended to strictly enforce it. Ho bidder, however, is produced who has stated that but for this provision he would have made a bid, and there is no evidence to show that there are any manufacturers anxious to perform work of this kind or who would have made bids for this work but for this provision of the proposals. Before it can be assumed that the action of the city officials in waiving • a strict compliance with this provision, if such a compliance was waived in this case, was fraudulent or caused damage to the city, there must be some proof to justify the court in finding that a bidder was prevented from making a bid by this provision of the proposals. The statutes under which these taxpayers’ actions are brought are to allow the acts of public officials to be controlled by the courts when the action is illegal or will impose upon the municipal corporation or the public burdens in excess of that which should be borne. They are not passed for the purpose of enabling corporations or combinations of individuals to compel the city to award contracts which will require the payment of an amount in excess of that for which competent and responsible bidders can be obtained to do the work. A court of equity is certainly justified in refusing to grant an injunction where it is perfectly apparent upon the face 'of the papers that the application is not made for the purpose of protecting the taxpayers or a municipal corporation, but for an ulterior purpose which will impose an additional burden upon a municipality, and - while an act which is clearly illegal, although it might be to the advantage of the municipal corporation, will be enjoined, a mere failure of a public officer to exercise a discretion in such a manner as will impose a large additional cost upon a municipality should never be enjoined. Upon the conceded facts of this case this application is not made in good faith to protect thé city or the taxpayers, but to compel the’city officials to accept a bid largely in excess of that which the public officers have accepted.and impose additional burdens upon the city of blew York; ■ .Of course the court would have the power at any time to restrain the action of the city officials to so use such a provision as to prevent competent persons from making bids or to enable the city officials to award contracts, to favored bidders,, and the court would not hesitate to enjoin the awarding of any contract based upon a bid where there .was proof to justify a finding of such an intent, but certainly the court will not award an injunction which would have the effect of compelling the city to award-a bid at a much higher price than that .to be paid to a successful bidder upon the assumption" without proof that other bidders were prevented from bidding because of the insertion of a provision of this kind in a proposal for a public contract. I think the order appealed from should be affirmed, with ten ' dollars costs and disbursements. " ' Laughlin, Houghton and Lambert, JJ., concurred; Patterson, P. J., concurred in result. Order affirmed, with ten dollars costs and disbursements. Order filed. ■