text:
    Litchfield Construction Company et al., Appellants, v. The City of New York, Respondent.
    New York city — contract —• Rapid Transit Act — no ground for application of special rules of construction to contract made by Public Service Commission under Rapid Transit Act — city of New York liable to contractor for damages caused by delay of engineer of Commission in performing his duties — sufficiency of evidence to sustain finding that plaintiff is entitled to recover for increased cost of work — interest on percentages of moneys earned but retained by city improperly allowed — evidence of payrolls of contractor properly received — loss from elimination of work provided for in contract properly allowed contractor —■ no damages from over-estimation where contractor was warned estimated quantities were approximate.
    1. The Rapid Transit Act (L. 1891, ch. 4) does not compel the city of New York to construct rapid transit railroads at the expense of the city for the benefit of the people of the State. It merely regulates the manner in which such railroads shall be laid out and constructed after the city or the voters of the city have decided that such railroads shall be constructed. Though the contract must be made by State officers acting for and in behalf of the city, yet city officers must approve both its form and substance before it becomes effective and it is in real sense the voluntary contract of the city. No ground exists for applying special rules of construction to the provisions of such contract, and breach of obligation created by its terms, fairly construed, gives rise to liability for resultant damages.
    2. In an action, therefore, against the city of New York to recover, among other things, for breach of a contract for construction of portions of a subway railroad, a decision, as matter of law, that no liability rests upon the city for damages caused to the contractor by delay of the engineer of the Public Service Commission in carrying out his duties for the reason that the engineer acted in the performance of his duties as an officer of the State and not as an agent of the city, is erroneous. The city is liable for failure of the engineer to act with promptness because the city undertook by its contract that the engineer should perform his duties in accordance with that contract.
    3. The Appellate Division has not passed upon the question whether the evidence in this ease sustains the finding that delay by the engineer in furnishing drawings and approving plans has caused damage to the plaintiff in the sum of $813,000. An examination of the record, however, shows that upon the entire evidence the jury was justified in finding that the engineer failed almost continuously to show promptitude of action in furnishing drawings which were reasonably and neeesarily required in view of the short time allowed by the contract for the completion of the work and that this lack of promptitude on the part of the engineer was the sole cause of the failure of the contractor to obtain structural steel and that failure to obtain structural steel in turn caused the contractor to use a method of construction which was more expensive than the method that would have been used if from the beginning steel had been available for erection as the excavation progressed. The evidence further shows that, in spite of all difficulties and other causes of delay, the work would have been completed in time if the supply of structural steel had been steadily available. The jury has so found and other evidence did not require a contrary inference. Its verdict, therefore, in favor of plaintiff, for the increased cost of the work should not have been set aside.
    4. Interest on percentages of moneys earned which the city retained under the provisions of the contract, was, however, improperly allowed. It cannot be said that delay in completing the work caused the contractor to lose interest on moneys that would have been paid upon earlier completion when those moneys would have been earned only by expenditure of further capital.

      5. A contention that even if the evidence is sufficient to sustain the finding of damages in favor of the plaintiffs, a new trial is necessary because of the improper admission in evidence of the payrolls of the contractor, cannot be sustained. There is no question that foundation for the introduction in evidence of the payrolls was sufficiently laid according to the strictest and most technical rules of evidence, in so far as they were made up from timesheets for workers during the day. It is said that without the oral testimony of the men who cheeked the time of the workers on the night shifts, the payrolls were inadmissible. Testimony of the timekeepers is sufficient to make the entries admissible as evidence that each man who received pay for work was actually working on the day or night for which he was paid, and tends to show that with possibly unsubstantial exceptions the labor which was paid for was performed. The plaintiffs were not required to go further.
    6. The trial court properly directed a verdict for the amount of loss suffered by the contractor by the elimination from the contract of a spur track described therein and a holding by the Appellate Division that the contractor is not entitled to these damages because the contract provided that the Commission reserved the right “ to alter, in any way it may deem necessary for the public interest, the drawings aforesaid, in part or altogether, * * * without constituting grounds for any claim by the contractor,” is erroneous. Changes in the drawings might alter the manner in which such work was to be performed, but changes in the drawings could not change the description of the work itself as contained in the contract.
    7. Plaintiffs may not recover any damages caused to the contractor by over-estimation where it was warned that the estimated quantities were “ approximate and only for the purpose of comparing on a uniform basis the bids offered for the work.”

      Litchfield Construction Co. v. City of New York, 216 App. Div. 517, modified.
    (Argued November 17, 1926;
    decided December 31, 1926.)
    Appeal from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered May 13, 1926, modifying and affirming as modified a judgment in favor of plaintiff entered upon a verdict partly directed by the court and upon a dismissal of the counterclaim.

      Edward M. Grout and Dean Potter for appellants.
    The city voluntarily made this contract by the Public Service Commission as its agent, after the State had created the Commission to serve as said agent if the city approved, and the city voluntarily undertook that the engineer of the Commission would furnish the contractor with “ working drawings amplifying the contract, the first within thirty days and the remainder as reasonably and necessarily required by the contractor,” and" is liable for the engineer’s breach of the city’s undertaking. (Bailey v. Mayor, 3 Hill, 531; Lloyd v. City, 5 N. Y. 374; Maximilian v. Mayor, 62 N. Y. 160; Oakes Mfg. Co. v. City, 206 N. Y. 221; Canavan v. City of Mechanicville 229 N. Y. 473; Matter of R. T. R. R. Comrs., 197 N. Y. 81; Sun Printing & Publishing Assn. v. Mayor, 152 N. Y. 257; People ex rel. Dunkirk, etc., v. Batchellor, 53 N. Y. 128; Admiral Realty Co. v. City, 206 N. Y. 110; Crowley v. Lewis, 239 N. Y. 264.) The State, in dealing with its creatures, the cities, towns, counties and other political subdivisions of the State, may create agencies for such creatures of the State through which they must act if they act at all. (Bailey v. Mayor, etc., 3 Hill, 531; Matter of Rapid Transit R. R. Comrs., 197 N. Y. 81; Barnes v. District of Columbia, 91 U. S. 552; Mayor, etc., v. Tenth National Bank, 111 N. Y. 446; Coyne v. Town of Greenburgh, 194 App. Div. 861; Walsh v. Mayor, 107 N. Y. 220; American Pipe & Construction Co. v. Westchester County, 225 Fed. Rep. 947; Horton v. Andrews, 191 N. Y. 231; Peterson v. City of New York, 205 N. Y. 323.) The city is liable for the engineer’s breach of its undertaking to furnish working drawings. (Del Genovese v. Third Ave. R. R. Co., 13 App. Div. 412; 162 N. Y. 614; McGovern v. City, 185 App. Div. 609; Borough Const. Co. v. City, 200 N. Y. 149; Delafield v. Village of Westfield, 41 App. Div. 24; 169 N. Y. 582; Johnson v. City of New York, 191 App. Div. 205; 231 N. Y. 564; Barnum v. Williams, 115 App. Div. 694; Mansfield v. N. Y. C. & H. R. R. R. Co., 102 N. Y. 205.) Whether or not the city could control the Public Service Commission or its engineer is immaterial. This action depends neither upon the doctrine of respondeat superior, nor merely upon agency by the engineer for the city. It depends really and finally upon the city’s voluntary and express covenant that the engineer would furnish the drawings as required by the contractor. (Miller v. United States, 49 U. S. Court of Claims, 276; Del Genovese v. Third Ave. R. R. Co., 13 App. Div. 412; 162 N. Y. 614; People ex rel. Cranford v. Willcox, 153 App. Div. 759; 207 N. Y. 743; People ex rel. R. T. S. Const. Co. v. Craven, 210 N. Y. 443; People ex rel. N. Y. Dock Co. v. Delaney, 192 App. Div. 734.) It was error for the Appellate Division to reverse plaintiffs’ recovery of the damages amounting to $16,813.65, sustained by being prevented from performing a part of the contract work, to wit, the spur running into Central Park, and to direct judgment for the defendant thereon. (Peterson v. City, 205 N. Y. 323; Kinser Construction Co. v. State, 204 N. Y. 381.) It was error for the Appellate Division to reverse plaintiffs’ recovery of the damages, amounting to $40,296.05, caused by the false estimation, in breach of the representation or warranty of the quantities of the work to be done, and to direct judgment for the defendant thereon. (Pilkington Co., Inc., v. City, 211 App. Div. 558; Jackson v. State, 210 App. Div. 115; 241 N. Y. 563; Hollerbach v. United States, 233 U. S. 165; United States v. Atlantic Dredging Co., 253 U. S. 1; McGovern v. City, 202 App. Div. 317; 235 N. Y. 275.) The Appellate Division erred in holding that the item of $11,094.18, interest included in the verdict of $813,000, was improper. (Taylor v. Mayor, 67 N. Y. 87; Sweeney v. City, 173 N. Y. 414; O’Keefe v. City, 176 N. Y. 297; Smith v. Bd. of Education, 208 N. Y. 84; Blackwell v. Finlay, 233 N. Y. 361; Griffin v. Colver, 16 N. Y. 489; Mortimer v. Otto, 206 N. Y. 89; Roebling’s Sons Co. v. City, 110 App. Div. 366; Leopold v. City, 184 App. Div. 244; Bradley v. McDonald, 218 N. Y. 351; Keenan & Sons, Inc., v. Johns-Manville Co., 184 App. Div. 98.)

      Louis 8. Carpenter, Albert J. Kenyon and James L. Quackenbush for Rapid Transit Subway Construction Company, amicus curice.

    The Public Service Commission for the first district, and its engineers, acted as the agents of the city in the execution of and carrying out the provisions of the dual contracts, executed March 19, 1913, and also the contract entered into May 21, 1915, between the city of New York and Litchfield Construction Company; and the delay on the part of the engineers, whereby the city failed to supply plans and working drawings within the times fixed by the contract, was the default of the agents of the city, chargeable to it, and was a breach of contract on the part of the city, for which the city is liable in damages to the plaintiffs. (Sun Publishing Assn. v. Mayor, 152 N. Y. 257; Admiral Realty Co. v. City of New York, 206 N. Y. 110; City of New York v. Interborough Rapid Transit Co., 236 N. Y. 557; Matter of Craig, 233 N. Y. 544; Matter of McAneny v. Board of Estimate & Apportionment, 232 N. Y. 377; Schieffelin v. Hylan, 227 N. Y. 593; McGovern v. City of New York, 234 N. Y. 377; Bakerman v. City of New York, 230 N. Y. 554; Wines v. Mayor, etc., 70 N. Y. 613; Dunham v. Townshend, 118 N. Y. 281; Matter of Cooper, 93 N. Y. 507;. Stemmier v. Mayor, etc., 179 N. Y. 473; Matter of City of New York [Newport Ave.], 218 N. Y. 274.)

      George P. Nicholson, Corporation Counsel (John F. O’Brien, Willard S. Allen and William E. C. Mayer of counsel), for respondent.
    The Public Service Commission and its engineer have been created by statute and by the contract at bar as agents of the city only to effect the public city purpose decreed by the sovereign power. In the absence of statute, neither the Commission nor its engineer was agent of the city to the extent of imposing liability upon the city for a breach of contract, if any such occurred, caused by delay, negligence or any other tort or no nfeasance of the Commission or its engineer. (Sun

      Pub. Assn. v. Mayor, 8 App. Div. 230; 152 N. Y. 257; Gubner v. McClellan, 130 App. Div. 716; Admiral Realty Co. v. City of New York, 206 N. Y. 110; Matter of McAneny, 232 N. Y. 377; Matter of Continental G. Corp., 240 N. Y. 354; People v. Crane, 214 N. Y. 154; McGovern v. City of New York, 185 App. Div. 609; Heim v. McCall, 239 U. S. 175; O’Brien v. City of New York, 182 App. Div. 810; People ex rel. N. Y. Dock Co. v. Delaney, 192 App. Div. 734; Degnon Cont. Co. v. City of New York, 202 App. Div. 390; Mahoney v. Boston, 171 Mass. 427; Murphy v. Nawn Cont. Co., 223 Mass. 404; McGovern v. Boston, 229 Mass. 394.) The Public Service Commission and its engineer, if agents of either party-in the commission of a breach of contract arising from neglect, delay or other form of misfeasance or nonfeasance, were agents of the contrai ¿or in no lesser degree than they were agents of the city. (Degnon Cont. Co. v. City of New York, 202 App. Div. 390; Matter of McAneny v. Bd. of Estimate, etc., 232 N. Y. 377; Heim v. McCall, 239 U. S. 175.) The trial court committed reversible error in admitting the contractor’s payrolls in evidence without proof of the prerequisites. (Collins v. Carlin, 106 App. Div. 204; Mayor v. Second Avenue R. R. Co., 102 N. Y. 572; Pneumatic Signal Co. v. Pac. Ry. Co., 216 N. Y. 374.) Appellants were not entitled to recover for the elimination of the stub track construction in Central Park. (Admiral Realty Co. v. Gaynor, 147 App. Div. 719.) The defendant was not liable to the plaintiffs for alleged overestimation of the quantities. (Cameron-Hawn Realty Co. v. City of Albany, 207 N. Y. 377; Allen v. City of Oneida, 210 N. Y. 496; Dunn v. City of New York, 205 N. Y. 343; Snare & Triest Co. v. City of New York, 191 App. Div. 184; 233 N. Y. 528; Leary v. City of Watervliet, 222 N. Y. 337; Matter of Sempler v. Duffey, 227 N. Y. 151.) Plaintiffs are not entitled to interest prior to the date when they filed their claim with the comptroller. (Ryan v. City of New York, 179 App. Div. 181; O’ Keeffe v. City of

      New York, 176 N. Y. 297; Smith v. Board of Education, 208 N. Y. 84; Sweeney v. City of New York, 173 N. Y. 414; Taylor v. Mayor, etc., 67 N. Y. 87; Dock Contractor Co. v. City of New York, 296 Fed. Rep. 272.)
   Lehman, J.

The Litchfield Construction Company entered into a contract in May, 1915, for the construction of certain sections of a subway or underground railroad, part of a route adopted by Rapid Transit Railway Commissioners for the city of New York in the year 1905. The contract called for the completion of the work sufficient to permit railroad operation by March 26, 1917, and the entire completion of the work by July 26, 1917. ' In fact, the work was ready for railroad operation only in March, 1919, and was entirely completed only in May, 1919. After completion of the work the plaintiffs brought this action to recover moneys which they claim are due to the Litchfield Construction Company from the city of New York under the provisions of the contract, and also to recover damages which they allege have been caused by breach of contract on the part of the city.

The plaintiffs’ claims embrace numerous separate items. The trial judge directed a verdict in their favor as to some of the items where there was no dispute as to the facts. Where claim rested upon disputed facts, the jury found in favor of the plaintiffs. Upon appeal to the Appellate Division the judgment was reversed as to some of the plaintiffs’ claims and affirmed as to others. Since the defendant has not appealed from the judgment we may review only the claims of the plaintiffs for which redress has been denied. The plaintiffs claim that delay in completing the railroad was due solely to the failure of the engineer of the Public Service Commission to perform at stipulated times the duties imposed upon him under the terms of the contract. For consequent damages they seek to impose liability upon the city. The city denies such liability and has retained, and refused to pay to the contractor, a percentage of moneys earned under the contract, upon the claim that an amount far exceeding the sum retained is due from the contractor under a clause of the contract that it shall pay stipulated damages of $600 for each and every day the contractor shall be in default in completing the work necessary to put the railroad in condition for operation after expiration of the time fixed by the contract. For the excess of such stipulated damage the city has interposed a counterclaim.

The jury has resolved the dispute in favor of the plaintiffs. It has found that the delay in the work was caused solely by the failure of the engineer to carry out promptly, and in strict accordance with the terms of the contract, the duties which the contracting parties have agreed he should perform and that this failure has increased the cost of the work and caused damage to the contractor in the sum of $813,000. As a result, the counterclaim of the city of New York was dismissed by the trial court and the judgment in favor of the plaintiffs, entered thereafter, includes the damages so found and also the sum of $71,090.15 payable under the terms of the contract with interest from December 31, 1919.

The contract purports to be made between The City of New York, hereinafter called the City, acting by the Public Service Commission for the First District, hereinafter called the Commission, party of the first part, and Litchfield Construction Co., a corporation organized and existing under the laws of the State of New York, hereinafter called the Contractor, party of the second part.” The Public Service Commission was given authority, subject to certain limitations, to make such a contract for and in behalf of the City of New York.” (Rapid Transit Act, section 26; Laws 1891, ch. 4.) The Commission has made this contract pursuant to the powers so given. The contractor under the terms of the contract agreed “ to construct the part hereinafter described of a Rapid Transit Railroad with its appurtenances.” The city agreed to pay the contractor stipulated sums of money in the manner and upon the terms and conditions set forth in the contract. The contractor was required to complete the railroad at a fixed date or pay stipulated damages of $600 for each day’s delay beyond such fixed date, unless the time for completion was extended. The contract provided for continuous control of the work and supervision of the details of the work by the Public Service Commission or its engineer. The engineer was at various stages of the work required to give directions to the contractor as to the manner in which the work should be done. Without directions from the engineer or approval of plan of work or drawings prepared by the contractor the work could not proceed. Indeed, no work might be begun until the Commission should issue to the contractor a permit authorizing him to proceed, and the contract provided that no permits for excavations will be issued until the contractor has given satisfactory assurance to the engineer that the structural steel and other material needed for construction will be available.” (Specifications, section 18.) The contract is too long for detailed analysis in this opinion. It is sufficient now to point out that throughout the contract are provisions which render impossible prompt performance of the work without the constant co-operation of the engineer. Though permit for excavation will not be granted without assurance to the engineer that structural steel will be available, it appears that such steel could not be fabricated until “ working drawings to amplify the contract ” were furnished by the engineer to the. contractor. From these working drawings the contractor was required to make shop drawings which in turn required the approval of the engineer. The evidence shows that the speed with which the work could be carried on by a willing and efficient contractor was in large part dependent upon the •promptness of the engineer, first in furnishing the working drawings and then in approving the shop drawings sent to him, and in giving other directions necessary for steady progress of the work.

Concededly the work could not be finished within the required time unless promptly begun and steadily and efficiently prosecuted. Even where the contract is silent as to the time within which the engineer must act, duty may be implied under such circumstances that he should act with due promptness, and not by delay or other act of commission or omission unreasonably hinder progress. In regard to the furnishing of working drawings by the engineer and approval by him of shop drawings submitted by the contractor, the contract expressly fixes the time during which he must act. The first of these working drawings will be given to the contractor within thirty (30) days after this contract is delivered and the remainder from time to time as may be reasonably and necessarily required by the contractor, and the contractor shall promptly upon the delivery of this contract furnish a written statement to the -engineer showing the order in which he desires the working drawings to facilitate the prosecution of his work, and this order.' will be followed so far as reasonably practicable and"' necessary.” (Specifications, section 4.) Again the contract provides that no work called for by said working or shop drawings shall be done until the approval of the engineer be obtained, which must be given or refused within twenty (20) working days after delivery to him at his office of such drawings in duplicate.” The plaintiffs claim that the engineer gave the contractor the first of the working drawings more than thirty days after the contract was delivered, and failed to give the contractor the remainder of the drawings from time to time as they were reasonably and necessarily required, and also failed to approve within reasonable time the shop or detailed drawings for the doing of the work.

There is at least some evidence that the engineer did not at all times act with the promptness stipulated in the contract. Indeed, the evidence shows without 'dispute that the first working drawings were not furnished within thirty days. Economical method of doing the work required that the structural steel should be erected as the excavation progressed. Because such steel was not at that time available the contractor used a slower and more expensive method. War was declared against Germany in, April, 1917, at approximately the date set by the contract for substantial completion of the work.' War conditions greatly increased construction costs thereafter. The jury has found that delay on the part of the engineer prevented delivery of structural steel at the time when excavation was being made and prevented completion of the contract before the declaration of war. Consequent damages it fixed at $813,000.

The Appellate Division has not held that there was no evidence to sustain the findings. It has decided as a matter of law that no liability rests upon the city for damages caused to the contractor by any delay of the engineer in carrying out his duties. It bases its conclusion in favor of the city upon the view that the engineer of the Public Service Commission acts in the performance of his duties as an officer of the State and not as an agent of the city. The decision is in accord with the opinion of the Appellate Division in the case of Degnon Contracting Co. v. City of New York (202 App. Div. 390). Upon appeal to this court that decision was affirmed, but on other ground. (Reported 235 N. Y. 481, 486.) The question of liability of the city for misfeasance or non-feasance on the part of the engineer was expressly left undecided. We hold this conclusion even though we assume, without deciding it, that the city was liable for damages caused by the neglect of an engineer in the employ and under the control of the Public Service Commission which had executed in its behalf the contract in question.”

The Public Service Commissioners are not city officers. “ Rapid transit for the city of New York has, for many years, been a matter of public interest, affecting not only the people of that city, but of the whole State. It has been generally regarded as a State affair.” (Matter of McAneny v. Board of Estimate, 232 N. Y. 377, 393.) The Rapid Transit Act which conferred power upon State officers to enter into a contract for the construction of a rapid transit railroad “ for and in behalf ” of the city embodies a recognition of State interest in the matter. Nevertheless the construction of a rapid transit railroad like the building of streets or highways constitutes a “city purpose.” (Sun Publishing Association v. Mayor, etc., 152 N. Y. 257.) In constructing such a railroad, the city acts not as sovereign but as proprietor. (Matter of Rapid Transit Commissioners, 197 N. Y. 81.) The Commissioners are the agency created by the State to make contracts for the construction of such railroads in behalf of the city. (Admiral Realty Co. v. City of New York, 206 N. Y. 110.)

It has not been questioned that the Public Service Commissioners could bind the city to pay for the railroad in accordance with the terms of the contract made in its behalf. In the cases cited above, and in many others, this court has decided directly or indirectly that such contractual liability may be imposed on the city. It is said, however, that the city has not agreed to pay damages for non-performance of duties by the engineer, and that it cannot be held responsible for his misfeasance or nonfeasance on the theory of respondeat superior because it never appointed him its agent. His powers and duties, it is said, devolve on him as employee of a State Commission and are not conferred upon him by the city; and the State has not made the Commission or its employees agents of the city except perhaps for the limited purpose of making the contract in its behalf. We shall not now consider whether the Commission or its employees are in other sense agents for the city or whether the city, in some case that may arise hereafter, might be held liable for negligence or wrong in the performance of their statutory duties. We find that in this case the city is liable for failure of the engineer to act with promptness because the city undertook by its contract that the engineer should perform his duties in accordance with that contract. We base our decision not on a finding that the Public Service Commission and its employees are statutory agents of the city in regard to the construction of a rapid transit railroad, but on a finding that there has been a breach of contractual obligation assumed by the city.

The Rapid Transit Act does not compel the city of New York to construct rapid transit railroads at the expense of the city for the benefit of the people of the State. It merely regulates the manner in which such railroads shall be laid out and constructed after the city or the voters of the city have decided that such railroads shall be constructed. (Sun Publishing Company v. Mayor, etc., supra; Matter of Rapid Transit R. R. Commissioners, supra.) Though the contract must be made by State officers acting for and in behalf of the city, yet city officers must approve both its form and substance before it becomes effective. “ All such contracts must before execution be approved as to form by the corporation counsel, or other chief legal adviser of such city.” (Rapid Transit Act, sec. 36.) Consent of the board of estimate is required before the contract may be made. (Section 37.) These and other provisions scattered through the Rapid Transit Act show that a contract made in accordance therewith is in real sense the voluntary contract of the city, and that city officers share, at least to some extent, with State officers, the responsibility of protecting the interests of the city by insistence upon a fair and proper contract. No ground exists for applying special rules of construction o to the provisions of such contract, and breach of obligation created by its terms, fairly construed, gives rise to liability for resultant damages.

We have pointed out that duty to act with promptness is imposed upon the engineer by express and by implied terms of the contract. Question still remains whether under a fair construction of the contract, the city undertook that the engineer would perform that duty. The answer to that question is hardly doubtful. In the case of Degnon Contracting Co. v. City of New York (235 N. Y. 481) this court in construing similar contracts stated: “ The defendant by the contracts thus executed undertook to furnish certain plans for the steel work through engineers whom the Public Service Commission solely appointed and controlled.” The undertaking to furnish these plans is inseparably connected with provision of the contract fixing the time and manner in which such plans must be furnished. Argument that, since the engineer was not the employee of the city, provision that he shall furnish the plans and drawings for the work should not be construed as impliedly .creating an obligation on the part of the city, ignores the relations of the parties and the evident intention of the contract. The contractor expressly agrees to perform work according to the contract and the specifications which are part of the contract. The specifications contain express statements that the engineer shall perform certain functions in specified manner. Unless the engineer does so the contractor cannot perform his contract. The contractor promises to perform because he has assurance in the contract itself that the engineer will act in prescribed manner. That assurance is given him by the city as the ■ basis of the contract and in giving that assurance the city promises that its terms will be carried out. It is liable for damages if the promise is broken. The trial judge correctly so held. Indeed, the contract in express terms recognizes that the contractor might claim compensation for damage “ sustained by reason of any act, neglect, fault or default of the * *- * Commission or their agents,” for in article XLIV it provides that statement of the nature of such claim must be filed with the engineer by the contractor; or otherwise his' claim may be forfeited.

• The Appellate Division has not passed upon the question whether the evidence in this case sustains the finding that delay by the engineer in furnishing drawings and approving plans has caused damage to the plaintiff in the sum of $813,000. It has affirmed the judgment in so far as it dismisses the counterclaim and permits recovery of the sums of money, payable under the contract, which the defendant has retained. Those parts of the judgment rest.upon a finding that completion of the work was delayed by fault of the engineer and right to payment of stipulated damages thereby lost to the city. (Mosler Safe Co. v. Maiden Lane Safe Deposit Co., 199 N. Y. 479.) We may not review this finding after it has been unanimously affirmed by the Appellate Division. No finding as to the damage caused by the engineer’s default or as to the length of time such default continued is necessary to sustain those parts of the judgment which have been affirmed. We must, therefore, examine the record to determine whether the evidence is sufficient to show that delay in completing the work for almost two years beyond the contract time, and damage of over $800,000 was caused by the engineer’s default.

Under the contract the engineer was bound to furnish the first of the working drawings within thirty days of the delivery of the contract. We have already pointed out that the undisputed evidence shows that the drawings were not delivered within that time. This delay was perhaps in itself not serious. Certainly within twenty-six days of the stipulated time complete working drawings for the first part of the work were supplied. Such delay of twenty-six days at, the inception of the work would hardly be sufficient to cause delay of almost two years in its completion. We have pointed out that the contract required prompt action by the engineer even after the first drawings were given to the contractor. Other drawings must follow “ as reasonably and necessarily ” required by the contractor. The plaintiffs produced evidence to show that if the contractor could have obtained the additional drawings earlier it could have performed the work more expeditiously and more economically. The defendant attempted to show that the engineer acted with reasonable speed. It is difficult, perhaps impossible, to point out what particular drawings should have been prepared and delivered more speedily; yet we think that upon the entire evidence the jury was justified in finding that the engineer failed almost continuously to show promptitude of action in furnishing drawings which were “ reasonably and necessarily required in view of the short time allowed by the contract for the completion of the work. There is evidence to the contrary which is by no means without persuasive force, yet upon the whole record a question of fact is presented. The plaintiffs further produced evidence without objection which tends to show that this lack of promptitude on the part of the engineer was the sole cause of the failure of the contractor to obtain structural steel and that failure to obtain structural steel in turn caused the contractor to use a method of construction which was more expensive than the method that would have been used if from the beginning steel had been available for erection as the excavation progressed. Method was adopted by which erection of the steel was postponed till a later stage of the work and timbers were temporarily used to hold up the top and sides of the space excavated till the steel could be put in their place. It is said that the method so adopted, in' itself, retarded the work and thereby compelled the contractor to do part of the work after the time when it would otherwise haye been completed, and during the period when entrance of this country into the war caused disruption of industry and tremendous increase of cost of all construction work.

The city urges that the contract allowed the contractor choice of method of construction, and that the city may not be held liable for damage caused by the contractor’s choice of an uneconomical method. If option provided by the contract was in fact left open to .the contractor, he may not complain because his' choice of method caused him loss. In this case the jury has found upon sufficient evidence that the option was not left open. Choice of method was dictated by necessity of proceeding with the work without steel, since no steel was then available. An unbroken chain of cause and effect leads from the delay of the engineer in furnishing drawings to the adoption by the contractor of method of construction more expensive than would have been used if no such delay had occurred, and damage may be traced directly to the original default. There is more ground for contention that even though delay by the engineer in. furnishing the working drawings naturally caused some delay in completing the work, other cause of delay also, intervened and that at least in part the work would have been incomplete at the outbreak of the war even though the structural steel had been on hand when the work began. Undoubtedly other causes not contemplated when the contract was made may have intervened to delay the work to some extent. The question underlying recovery by the contractor for the entire increased cost of completing the work after April, 1917, is whether the work would have been completed at that time but for delay occasioned by the engineer. Otherwise, of course, the plaintiffs would not be entitled to recover more than the increased cost of such work as was left unfinished because of fault of the engineer. The plaintiffs produced evidence to show that, in spite of all difficulties and other causes of delay, the work would have been completed in time if the supply of structural steel had been steadily available. The jury has so found. Other evidence did not require contrary inference. No ruling on other question of law has been pointed out to us which would justify an appellate court in setting aside as matter of law the finding that the plaintiffs are entitled to recover the full sum of $813,000 as damages for delays which the city has by contract given assurance should not occur, except in so far as this amount includes an item for interest on percentages of moneys- earned which the city retained under the provisions of the contract.

If the contract had been completed within the contract period the city would have been compelled to pay to the contractor the full contract price before January 1st, 1918. At that date the contract was incomplete, and the city retained the sum of $114,896 out of moneys actually earned before that time. At the end of each month thereafter the city was bound to make payment of moneys earned during the progress of the work, subject to its right to retain an agreed percentage thereof. The amounts so retained at the end of each month till the end of the work varied from $129,000 to $69,000. Interest on the sums so retained till December 31st, 1919, the date when plaintiffs filed their claims with the comptroller, amounts to $11,094.18. The Appellate Division has correctly held that the plaintiffs were not entitled to recover such interest. There is no claim that all moneys were not paid as provided by the contract as the work progressed. The city had the right to retain a percentage of the moneys earned. The contractor became entitled to receive the retained percentage only when it fully completed the work. Delays by the engineer in turn delayed the completion of the work by the contractor. At.no time during such delay had the contractor furnished to the city the labor and materials upon which further payments could be required. The money which the contractor would be compelled to use in furnishing labor and materials necessary to complete the' contract was stil unexpended by the contractor. It cannot be said that delay in completing the work caused the contractor to lose interest on moneys that would have been paid upon earlier completion when those moneys would have been earned only by expenditure of further capital. There is no more ground for the allowance of interest on retained percentages which became payable only when additional work was completed than there would be for similar allowance of interest on payments to be made for such additional work. In neither case did payments become due until additional moneys were expended in the performance of additional work, and it cannot be said that the contractor is damaged by loss of interest on withheld payment as a result of the engineer’s fault unless we might balance against such loss of interest, interest on moneys which must be expended by the contractor before payment became due. The plaintiffs are, therefore, not entitled to recover the sum of $11,094.18 interest on retained percentages which is included in the verdict of $813,000.

The city urges and the Appellate Division has held that even if the evidence is sufficient to sustain the finding of damages in favor of the plaintiffs, a new trial is necessary “ because of the improper admission in evidence of the payrolls of the contractor, because proof necessary to their admission was lacking.” The plaintiffs proved their damages by showing the actual cost of completing the work after April, 1917, and the estimated amount the . same work would have cost if performed during the contract period.- They proved payment of actual cost by checks and vouchers. A great mass of documents supporting the vouchers was admitted in evidence. Testimony to lay the foundation for the introduction of this documentary evidence occupied two days of the time of the court. Both parties agreed that the jury might be excused while this testimony was being given. Hardly any of the documents are printed in the record; yet we are asked to reverse a judgment entered upon the verdict of the jury after a month’s trial because payrolls not printed in the record on appeal were introduced without sufficient foundation laid by •preliminary oral testimony while the jury was absent.

These payrolls were kept in the usual course of business by employees of the contractor. Checks and vouchers show that the contractor paid its workmen in accordance with the lime they worked as shown on the payrolls. Every person who made up these payrolls was produced or his absence properly accounted for. These payrolls were made up from timesheets kept by timekeepers. These timekeepers were also produced or their absence accounted for. The timekeepers testified in effect that they checked up the timesheets during the day, and when they left the work at the close of the day they checked the names of the men who then came to the work on the night shifts. Cross-examination elicited testimony that others checked the time of the night shifts while they were working and when they left at night. The men who checked the time of the night shifts during the night were not produced. There is no question that foundation for the introduction in evidence of the payrolls was sufficiently laid according to the strictest and most technical rules of evidence, in so far as they were made up from timesheets for workers during the day. It is said that without the oral testimony of the men who checked the time of the workers on the night shifts, the payrolls were inadmissible, under authority of the case of Mayor, etc., of New York v. Second Avenue R. R. Co. (102 N. Y. 572).

The documentary evidence, books, checks, voucher^ etc., were introduced by the plaintiffs to prove the actual cost of the work. They show beyond possibility of dispute actual payments for particular labor and materials which they include in the cost. The payrolls were admitted merely as part of the mass of documents which together tend to show that the labor and materials paid for were actually furnished. No one in this case is interested in the question of whether a particular workman at a particular hour of the night was doing a particular piece of work. It may well be that if such facts were material they could not be proven by entries in books so1 seating, at least without the supporting testimony of the man who gave the information contained in those entries. The plaintiffs here were establishing cost of work amounting to over a million dollars. Testimony of the timekeepers under the rule applied in Mayor, etc., of N. Y. v. Second Ave. R. R. Co. (supra) is sufficient to make the entries admissible as evidence that each man who received pay for work was actually working on the day or night for which he was paid. Such evidence does not exclude possibility that in some cases men did not work all the hours entered on the timesheet. None the less it tends to show that with possibly unsubstantial exceptions the labor which was paid for was performed. The plaintiffs were not required to go further. We do not now consider whether the same general principles and practical standards which in the case of Mayor, etc., of N. Y. v. Second Avenue R. R. Co. led to some relaxation of antiquated rule, might not, if applied to questions arising at the present time, lead to a broader statement of the field where relaxation is permissible. (See The Spica, 289 Fed. Rep. 436.) In the present case the evidence is admissible even without further relaxation of any established rule.

Two other claims for damages caused by alleged breach of contract on the part of the city still require consideration.

The section of the railroad which the contractor agreed to construct is of course described in the contract. That description includes the words including a spur curving northwesterly under Seventh Avenue, West Fifty-ninth Street, and Central Park, to a point about twenty-two feet west of the westerly building line of Seventh Avenue.” Subsequently the contractor received a notice that The Commission on June 1st, 1916, took action eliminating from the contract this stub track construction.” By the elimination from the contract of this part of the work the contractor suffered damages in the sum of $16,813.65. The trial judge directed a verdict in their favor for this amount. The Appellate Division has held that the contractor is not entitled to these undisputed damages because the contract provided that the Commission reserved the right to alter, in any way it may deem necessary for the public interest, the drawings aforesaid, in part or altogether, * * , * without constituting grounds for any claim by the contractor.” (216 App. Div. 517.) Although the spur which the contractor agreed to construct was only 187 feet long, it is part of the work as described in the contract which the contractor was bound to do and which the city was bound to pay for. Changes in the drawings might alter the manner in which such work was to be performed, but changes in the drawings could not change the description of the work itself as contained in the contract. (See McMaster v. State of New York, 108 N. Y. 542; Petersen v. City of New York, 205 N. Y. 323.)

The invitation to contractors to bid on the contract for the construction of the railroad included a statement of the estimated approximate quantities of the various classes of work which would be required for performance of the contract. These estimated quantities were thirteen per cent higher than the work actually required in the performance of the contract. The contractors were warned that the estimated quantities were approximate and only for the purpose of comparing on a uniform basis the bids offered for the work.” We agree with the Appellate Division that under these circumstances the plaintiffs may not recover any damages caused to the contractor by overestimation.

Grant of extra allowance rests within the discretion of the courts below. We may not interfere with such discretion.

For these reasons the judgment of the Appellate Division should be modified in accordance with this opinion and as modified affirmed, with costs to the appellant in this court and in the Appellate Division.

His cock, Ch. J., Cardozo, Pound, McLaughlin, Crane and Andrews, JJ., concur.

Judgment accordingly.


source: Caselaw Access Project

author: Pound, J.

license: Public Domain

text:
    Edward J. Batchelar, Respondent, v. Annie L. Batchelar et al., Defendants. Elmer W. Baker, Appellant.
    Vendor and purchaser — judicial sale — practice — motion by purchaser at judicial sale to be relieved from purchase for delay in perfecting title — error to hold that purchaser having acquiesced in delay could not put referee in default without notice — relief in discretion of court and rule to be applied is that of fairness.
    1. The rule, that when time of performance has been waived by the parties to a contract notice to perform is a condition precedent to liability for damages based on rescission, does not apply to judicial sales of real property.
    2. It is, therefore, error for the court to hold, on motion by a purchaser of real property at a partition sale to be relieved of his purchase for delay in perfecting title, that the purchaser, having once acquiesced in the delay, could not place the referee in default without first giving him notice to perfect the title within a reasonable time. When a reasonable time has elapsed after closing day and the title remains defective, the purchaser may move the court to be relieved from his purchase and the court may, in its discretion, deny the application absolutely or conditionally or may grant it. The rule to be applied is that of fairness.

      Batchelar v. Batchelar, 217 App. Div. 771, reversed.
    (Argued January 11, 1927;
    decided January 18, 1927.)
    Appeal from an order of the Appellate Division of the Supreme Court in the second judicial department, entered July 7, 1926, which reversed an order of Special Term granting a motion, by appellant herein, to be relieved of his purchase, made at a partition sale, and denied the motion.

      Charles II. Street for appellant.
    The Appellate Division erred in reversing the order of the Special Term and denying the purchaser’s application to be relieved of his purchase. (Taylor v. Goelet, 208 N. Y. 253; Brede v. Rosedale Terrace Co., 216 N. Y. 246; Trainor Co. v. Amsinck & Co., Inc., 236 N. Y. 392; People v. N. Y. Building-Loan Banking Co., 189 N. Y. 233; Jordan v. Poillon, 77 N. Y. 518; Fleming v. Burnham, 100 N. Y. 1; Crouter v. Crouter, 133 N. Y. 55; Rice v. Barrett, 99 N. Y. 403; People v. Open Board of Stock Brokers, 92 N. Y. 98; Wetmore v. Wetmore, 162 N. Y. 503; Birge v. Berlin Iron Bridge Co., 133 N. Y. 477; Moore v. Vulcanite Portland Cement Co., 220 N. Y. 320.)

      William A. McLaughlin for respondent.
    Where delay in perfecting title is excused, purchaser is not relieved. (Hubbell v. Von Schoening, 49 N. Y. 327; Schmidt v. Reed, 132 N. Y. 108.)
   Pound, J.

A referee’s sale under an interlocutory judgment in an action for the partition and sale of real property was had on September 2,1925. Appellant bid in two parcels for $29,600. The terms of sale provided for the closing thereof on or before October 5, 1925. The time was postponed to November 4, 1925, and thereafter to November 18, 1925. The purchaser then attended at the proper time and place and was ready to perform on his part provided the referee could give a good and marketable title to the premises. The title was defective. The premises were subject to the lien of an undischarged mortgage not mentioned in the. notice of sale. The purchaser refused to complete his purchase. Further time was requested to which he made no objection. Promises speedily to perfect the title were from time to time made by plaintiff’s attorney. The purchaser was patient and offered no serious objection to the delay. On December 31, 1925, the referee notified plaintiff’s attorney that he had been appointed a city magistrate and that he could no longer act. When nearly two months had elapsed after the purchaser had refused to take title, on January 6, 1926, he caused a written notice to be served on plaintiff’s attorney and the referee stating that he rejected the title to the premises and demanding the return of his deposit and payment of his disbursements. He thereafter on January 13, 1926, moved at Special Term to be relieved from his purchase. On February 4, 1926, his motion.was granted. It did not appear that a new referee had been appointed or that the defect in title had been cured or could be cured without further delay.

The Appellate Division reversed the order of the Special Term “ on the law and not in the exercise of discretion.” It held that the purchaser having once, acquiesced in the delay, could not place the referee in default without first giving him notice to perfect the title within a reasonable time.

Although no authorities are cited in the memorandum opinion, it seems a reasonable inference that the court felt bound by rules laid down in certain cases applicable to private contracts of sale when time of performance has been waived by the parties to the agreement and notice to perform has been held to be a condition precedent to liability for damages based on rescission.

This rule is not applicable to judicial sales of real property. No question of damages is there involved. “ 'The court, however, treats a contract made with one of its officers as being made with the court itself, and will deal with its contractee upon equitable principles.’ ” (People v. N. Y. Building-Loan Banking Co., 189 N. Y. 233, 237.) When a reasonable time has elapsed after closing day and the title remains defective, the purchaser may move the court to be relieved from his purchase. The court may, as the facts permit, in its discretion deny the application absolutely or conditionally or may grant it, and its determination may not be reviewed in this court. But no such question of law is presented as that stated by the Appellate Division. The whole matter is before the Special Term which applies the rule of fairness. If the defect in title is curable, it may give the referee time to remove the cloud. It is no abuse of discretion to refuse further time when it does not appear that the title may be perfected with reasonable diligence. More especially may it exercise such discretion in behalf of the purchaser in a case like this where the referee has resigned or attempted to resign and notice to him would be a barren formality.

An unreasonable delay in furnishing a good title is a sufficient answer to an application to compel the purchaser on a judicial sale to take a conveyance. (Rice v. Barrett, 99 N. Y. 403.) When the purchaser is the moving party no different rule applies.

The order of the Appellate Division should be reversed and that of the Special Term affirmed, with costs in this court and in the Appellate Division.

Cabdozo, Ch. J., Cbane, Andbews and Lehman, JJ., concur; Kellogg, J., not sitting.

Ordered accordingly.


author: Per Curiam.

text:
    The People of the State of New York, Respondent, v. Joseph Daly, Appellant.
    Crimes — false label — counterfeit — strict proof of knowledge of falsity of label required to warrant conviction where article sold was as represented.
    On trial of a defendant, charged with violating section 2354 of the Penal Law in keeping and offering for sale an article bearing a false label, where it appears that though the label was false and counterfeit the article sold was genuine and as represented, strict proof of knowledge of falsity should appear to warrant a judgment of conviction.

      People v. Daly, 216 App. Div. 710, reversed.
    (Argued January 13, 1927;
    decided January 25, 1927.)
    Appeal from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered February 19, 1926, which affirmed a judgment of the Court of Special Sessions of the city of New York convicting the defendant of a violation of section 2354 of the Penal Law.

      Henry Clay Greenberg for appellant.
    The judgment of conviction is wholly unsupported by the evidence. The crime as charged in the information was not committed. The record is barren of any proof showing that the defendant had knowledge of the falsity of the label without the proof of which the People could not establish guilt. (People v. Franklin, 198 App. Div. 712.)

      Joab H. Banton, District Attorney (Edwin B. McGuire of counsel), for respondent.
    The judgment of conviction was warranted by the evidence. (People v. Willis, 158 N. Y. 392; People v. Luhrs, 127 App. Div. 634; 195 N. Y. 377; People v. Sanducci 195 N. Y. 361; People
      v. Poulin, 207 N. Y. 73; People v. Atlas, 183 App. Div. 593; 230 N. Y. 629; People v. Rodawald, 177 N. Y. 408; People v. Long, 150 App. Div. 500.)
   Per Curiam.

The information charges a violation of Penal Law, section 2354, as follows: “ The said defendant on the 21st day of November, 1924, at the City of New York, in the county of New York, unlawfully and knowingly did keep and offer for sale to the public generally an article of merchandise, to wit: an overcoat to which was affixed the markings, Worumbo Manufacturing Company, then and there well knowing that the said markings were false and counterfeit of trademarks of the said Worumbo Manufacturing Company and were affixed to the said coat without the consent of the said company in violation of section 2354 of the Penal Law of the State of New York.”

The evidence establishes that defendant sold an overcoat of genuine Worumbo cloth to which was affixed a false and counterfeit label purporting to be the trade-mark label of the Worumbo Company. He had received labels, not from the Worumbo Company, but from those who manufactured Worumbo cloth into garments to whom the Worumbo Company furnished labels. He had in his possession both genuine and false labels. From the fact that he had spurious labels in his possession, it was inferred that he knew the true from the false. Such might have been a reasonable inference if the false label had been attached to a garment made of a cloth other than that manufactured by the Worumbo Company. Plainly the principal purpose of the Legislature was to protect the manufacturers and the public from deceptive labels attached to goods that were not what the label represented them to be. Strict proof of knowledge of falsity should appear when only the letter of the law is disregarded and the false label is not used to deceive.

For all that appears, defendant, when he sold the overcoat, knew not which was the true label and which the false, and knew not that either was false.

The judgment of the Appellate Division and that of Special Sessions should be reversed and a new trial ordered.

Cardozo, Ch. J., Pound, Crane, Andrews and Lehman, JJ., concur; Kellogg, J., absent.

Judgment reversed, etc.


author: Caedozo, Ch. J.

text:
    The People of the State of New York ex rel. Fordham Manor Reformed Church et al., Appellants, v. William E. Walsh et al., Constituting the Board of Appeals of the City of New York, Respondents. Samuel Marker, Intervenor, Respondent.

      ÍTevr York city — Zoning Ordinance — certiorari — review of decision of board of appeals permitting departure from zoning map on ground of unnecessary hardship ■— return on certiorari must show reasons for finding of hardship — existence of garage in same portion of street in residence- district insufficient, in itself, for permission to erect another next door.
    1. Section 719-a of the charter of the city of New York (L. 1916, ch. 503, § 6) providing for review by certiorari of a decision of the board of appeals, requires that the return to the writ “ must concisely set forth such facts as may be pertinent and material to show the grounds of the decision.”
    2. Where, therefore, upon the petition of a property owner for variation of zoning regulations so as to permit erection of a garage in a residence district, his right to relief, if it exists at all, must have its foundation in section 21 of the Zoning Resolution whereby the board of appeals is invested with dispensing power “ where there are practical difficulties, or unnecessary hardships ” in the way of carrying out the strict letter of the law and, obviously, there are no practical difficulties, so that the inquiry is reduced to whether there is any support for a finding of unnecessary hardship, reasons assigned for granting the relief, in a return to a writ of certiorari to review the decision of the board, which amount to nothing more than that a garage may be built because there is another one next door, are insufficient to supply a basis for a departure from the zoning map. Under the Zoning Ordinance a garage already existing in the same portion of the street is not a sufficient reason, in and of itself, for the allowance of another in a district set apart for residences. There must be a showing of “ unnecessary hardship ” and if such hardship exists the reasons therefor should appear from the return. A review by certiorari becomes impossible if without supporting evidence .or allegations in the answer equivalent to evidence the mere conclusion of hardship is sufficient and decisive. (People ex rel. Werner v. Walsh, 240 N. Y. 689; People ex rel. Facey v. Leo, 230 N. Y. 602, distinguished.)

      Matter of Fordham Manor Reformed Church v. Walsh, 217 App. Div. 177, reversed.
    (Argued January 10, 1927;
    decided February 23, 1927.)
    Appeal from, an order of the Appellate Division of the Supreme Court in the first judicial department, entered June 4, 1926, which reversed an order of Special Term annulling a determination of the board of appeals of the city of New York and confirmed said determination.

      Abel E. Blackmar and John N. Regan for appellants.
    The power conferred upon the board of standards and appeals by section 21 of the Zoning Resolution is judicial and not administrative. (People ex rel. Werner v. Walsh, 212 App. Div. 635; People ex rel. Steward v. Railroad Commissioners, 160 N. Y. 202; People ex rel. Loughran v. Railroad Commissioners, 158 N. Y. 421.) Certiorari lies to review the decision of the board in finding that there are practical difficulties or unnecessary hardships and also in determining that the variance of the provisions of the resolution is in harmony with its general purpose and intent. (Matter of Goldenberg v. Walsh, 215 App. Div. 396; 242 N. Y. 576; People ex rel. Werner v. Walsh, 212 App. Div. 635; 240 N. Y. 659.) The return and the record before the board were not sufficient to justify a finding of practical difficulties or unnecessary hardships. (N. Y. Charter, § 719-a, subd. 3; L. 1916, ch. 503, § 6.)

      George P. Nicholson, Corporation Counsel (John F. O’Brien, J. Joseph Lilly and William T. Kennedy of

      counsel), for Board of Appeals, respondent.
    If there are any facts tending to support the determination of the board in relation to the existence of a hardship, then its action is not arbitrary and it will be sustained. Courts will not substitute their judgment for that of the board. (People ex rel. Werner v. Walsh, 212 App. Div. 635; 240 N. Y. 689; Matter of Goldenberg v. Walsh, 215 App. Div. 396; 242 N. Y. 576; Matter of Boyd v. Walsh, 217 App. Div. 461; People ex rel. N. Y. & Q. Co. Gas Co. v. McCall, 219 N. Y. 84; 245 U. S. 345; City of Rochester v. R. G. & El. Co., 233 N. Y. 39; People ex rel. Penn. Gas Co. v. Pub. Serv. Com., 211 App. Div. 253; People ex rel. Schau v. McWilliams, 185 N. Y. 92; People ex rel. Moriarty v. Creelman, 206 N. Y. 92.) The board’s determination is supported by the facts. (People ex rel. Facey. v. Leo, 230 N. Y. 602; People ex rel. Smith v. Walsh, 240 N. Y. 607.)

      Monroe Goldwater and Nathan B. Kuklin for intervenor, respondent.
    A real hardship would be imposed upon the property of the intervenor, respondent, by the denial of his application.' (People ex rel. Werner v. Walsh, 212 App. Div. 635; 240 N. Y. 689.) The determination of the board of appeals should not be interfered with in the absence of the sure exercise of discrimination or the gross abuse of discretion. (People ex rel. Werner v. Walsh, 212 App. Div. 635; 240 N. Y. 689; Multiplex Garages, Inc., v. Walsh, 213 App. Div. 155; Matter of Goldenberg v. Walsh, 215 App. Div. 396; People ex rel. Boyd v. Walsh, 210 N. Y. Supp. 46.)
   Caedozo, Ch. J.

The city of New York has been divided by its Board of Estimate and Apportionment into zones or districts of three classes: residence districts, business districts, and unrestricted districts (Ordinances New York City, Zoning Resolution, §§ 2, 3, 4, 5). In residence districts, buildings may be used for dwellings, clubs, churches, schools, hospitals, railroad passenger stations, and a few other kindred purposes. In business districts, enumerated forms of trade and industry, forty-five in number,, are prohibited. Garages for more than five motor vehicles are among the buildings barred. In unrestricted districts, there are no restraints upon use.

The Board of Appeals, after public notice and hearing, may permit in a business district the erection of a garage in any portion of a street between two intersecting streets in which portion there exists a garage for more than five motor vehicles * * * which existed on July 25, 1916,” (Zoning Resolution, § 7, subd. e). No provision is made for a like variation in residence districts. The Board may also permit the erection of a garage in either a business or a residence district if “ the petitioner files the consents duly acknowledged of the owners of 80 per cent, of the frontage deemed by the Board to be immediately affected by the proposed garage,” (§ 7, g). Finally, where there are practical difficulties or unnecessary hardships in the way of carrying out the strict letter of the provisions of this resolution, the Board of Appeals shall have power in a specific case to vary any such provision in harmony with its general purpose and intent, so that the public health, safety and general welfare may be secured and substantial justice done,” (Zoning Resolution, § 21; cf. Greater New York Charter, § 242-b).

One Samuel Marer was the owner in May, 1925, of a plot of land, 150 feet in width, fronting on the west side of Aqueduct avenue, between Kingsbridge road and One Hundred and Ninety-second street in the borough of The Bronx. He owned also at this time a plot to the north, extending to Kingsbridge road, about 86 feet in width. Kingsbridge road, together with a strip of land 100 feet along it, is in a business district. Aqueduct avenue except for this strip of 100 feet is in a residence district. Marer wished to build a garage upon the southerly 150 feet of his total plottage, but the zoning law forbade. The greater part of the 150 feet was in a district classified as residence. His plans being rejected by the superintendent of buildings, he petitioned the Board of Appeals to vary the zoning regulations in his case. He could not bring himself within Zoning Resolution, section 7-e. There was, it is true, another garage on the same block, immediately to the south, a garage erected before July 25, 1916, when the zoning law took effect. The presence of such a garage, without more, permits the Board in its discretion to authorize a new garage in a business district. It has no such effect in a residence district. He could not bring himself within section 7-b, which prescribes the powers of the Board “ where a use district boundary line divides a lot in a single ownership.” “A use authorized on either portion of such lot ” may then be extended “ to the entire lot, but not more than 25 feet beyond the boundary line of the district in which such use is authorized.” Besides, there is nothing to show that the northerly 14 feet of the land to be used for the proposed garage could not have been combined in some appropriate use with the 86 feet, vacant and in the same ownership, extending to Kingsbridge road. He could not bring himself within section 7-g, for he did not file the consents of the owners of 80 per cent of the frontage affected by the change. His right to relief, if it exists [it all, must have its foundation in section 21, whereby the Board of Appeals is invested with dispensing power “where there are practical difficulties or unnecessary hardships ” in the way of carrying out the strict letter of the law. Practical difficulties there obviously are none. The inquiry is thus reduced to this, whether there is any support for a finding of unnecessary hardship.

We have seen that the plot immediately adjoining to the south is already occupied by a garage. The existence of this garage was known presumably to the Board of Estimate and Apportionment when it adopted the zoning map. None the less, it placed the street within the boundaries of a residence district. This was a manifestation of its will that the residence use should be maintained unless unnecessary hardship in individual or peculiar cases would otherwise result. The section is a growing one, as yet but sparsely settled. The use to be made of Marer’s lot, with its frontage of 150 feet, will fix for years to come the quality of the street. Next to the old garage, on the south, there is a lot still vacant, 62% feet wide. Its owner has appeared in this proceeding and protests against the qhange. Next is an apartment house. The owner of that lot consents. On the same side of Aqueduct avenue, but across One Hundred and Ninety-second street, is another apartment house. The owner of that lot protests. On the other side of Aqueduct avenue between Kingsbridge road and One Hundred and Ninety-second street is a strip of land belonging to the city of New York, laid out as a park. Many children play there. Its attractiveness as a playground will be impaired, at least in some degree, by the multiplication of garages. The next street to the east, Grant avenue, also in a residence district, is occupied by dwellings. The rear windows of these dwellings look out across the strip of park upon the site of the proposed garage. Many of the owners protest against the change. The next street to the west, University avenue, also in a residence district, is occupied chiefly by dwellings, though there are some lots in use for business. The rear of the proposed garage will be contiguous to the rear of one of these dwellings, an apartment house. Its owner has not consented to a variation of the use.

Upon a record made up for the most part of informal colloquy with counsel, the Board granted the petition, one member dissenting. Owners of near-by property conceiving themselves aggrieved sued out a writ of certiorari under Greater New York charter, section 719-a. By the terms of the statute, the return is to contain a copy of any papers acted upon by the Board, and “ must concisely set forth such other facts as may be pertinent and material to show the grounds of the decision.” The court may take evidence either through a referee or otherwise, “ if, upon the hearing, it shall appear * * * that testimony is necessary for the proper disposition of the matter ” (cf. People ex rel. Manhattan R. Co. v. Barker, 152 N. Y. 417, 430, 431). The return to this writ annexes a copy of the proceedings at the hearing, and states the following reasons for the action of the Board:

“ (1) There is an existing one-story garage immediately adjoining the proposed garage which has a frontage on Aqueduct Avenue of 67 feet 5 inches and runs through the entire block from Aqueduct ■ Avenue to University Avenue as shown on the blue print plan. The existence of said garage which accommodates approximately 180 cars is sufficient justification to permit another garage next door. This is precisely what the Board has done by its decision herein.

(2) The Board of Appeals is of the opinion that a real hardship would be imposed on the owner of said property if prevented from using it for garage purposes.

“ (3) The public health, safety and general welfare is secured and substantial justice done to all the parties interested by the decision of the Board of Appeals in view of the character of the neighborhood and the existing garage next door. No hardship or injustice is imposed upon the objecting property owners.

(4) The plot of ground on which it is proposed to erect said garage has a frontage on Aqueduct Avenue of 150 feet by a depth of 109 feet 3 inches, located about 86 feet southerly from Kingsbridge Road. Rigid conditions have been imposed, and said proposed garage is limited to one-story in height.”

We think the reasons assigned are insufficient to supply a basis for a departure from the map. They amount to nothing more than this, that a garage may be built because there is another one next door. A garage already existing in the same portion of the street is a sufficient ground under section 7-e for the allowance of a new garage in a district set apart for business. It is not a sufficient reason in and of itself in a district set apart for residences. There must then be a showing of something more, a showing of “ unnecessary hardship.” If such hardship exists, the reasons for its existence should appear from the return. Only thus can a court know whether they are substantial or illusory. The reasons may be made to appear in one or other of two ways. The hardship may be found as an inference from evidence submitted at a hearing. Dealers in real estate or other qualified experts may show, for illustration, that the land cannot yield a fair income if occupied as a dwelling. The discrepancy, even if not decisive in all cases, would be highly significant in many. At all events, when there is evidence in the record, whatever inferences therefrom are proper will be presumed, n aid of the dispensing resolution, to have been drawn by the Board. The statements of the witnesses do not have to comply with the technical requirements applicable to testimony in court. They are not even under oath. It is enough that reasonable men could view them as entitled to probative "effect. But the power of the Board to do justice informally and promptly is not limited to cases where witnesses have been heard. Without any witnesses at all, it may act of its own knowledge, for, as constituted by the statute (Greater New York charter, § 718), it is made up of men with special qualifications of training and experience. In that event, however, it must set forth in its return the facts known to its members, but not otherwise disclosed. To characterize the situation as a hardship without more does not tend in any substantial degree to enlighten a reviewing court. There must be disclosure of the facts from which hardship is inferred.

We find neither evidence at the hearing, nor any statement, equivalent to evidence, by the Board in its return, that this land, if not occupied by a garage, is incapable of application to a profitable use. The omission leaves the permit unsupported by the proofs. The court is not informed as a matter of judicial notice that land cannot profitably be improved by an apartment house in sections of modest or humble quality for the mere reason that next door there is a garage a single story high. One of the members of the Board stated at the hearing that such a garage, far from decreasing the fitness of the site, has a substantial tendency to increase it by assuring light and air. If he was in error, there was no one who ventured to contradict him at the time. The disadvantage, if any, of the neighboring garage was offset to some extent, as was pointed out at the same time, by the pleasing prospect assured to dwellers in such an apartment house by the strip of park in front. The Board or a majority of its members may have known, aside from any evidence submitted by the owner or his witnesses, that the effect of a garage is to destroy the value of adjoining dwellings in districts of modest homes as in those of wealth and fashion. If that is so, there has been a failure to disclose the knowledge, or the facts that would lead to knowledge, in the answer to the writ. A pronouncement so sweeping might have far-reaching effects upon the development of residence districts in other sections of the city. We cannot read it into the answer as the result of doubtful inference. Presumably this owner, who acquired the parcels with notice of the zoning resolution, paid a consideration appropriate to the limitation of the use. There is no element of the unexpected or the incalculable to aggravate his plight. So far as the record shows, the mere presence of another garage upon the lot immediately adjoining has been made the excuse, without other explanation of the hardship, for changing the quality of the street and nullifying the map.

We say the quality of the street is changed, and so indubitably it is. Beside the old garage, 67feet wide, there is to be a new one even wider. Out of a total block frontage of about 518 feet, 217^ feet will be devoted hereafter to a prohibited use. No one can doubt that Aqueduct avenue at this point will be taken out of the residence district as effectively as if the old map had been withdrawn and another with a new contour established in its stead. The power to change the map is reserved by the charter to the Board of Estimate and Apportionment. The power of the Board of Appeals is confined to variations in special cases to meet some unusual emergency, some unnecessary hardship. The consequences at times may not be greatly different. All the more obvious is the need that the nature of the hardship and the reasons for declaring its existence be disclosed with reasonable certainty. Disclosure may come, as we have already pointed out, from the evidence at the hearing. It may come, when such evidence is lacking, from the allegations of the answer, which must then take such a form as to be equivalent to evidence. In the absence of one basis or the other, the resolution may not stand.

Previous decisions of this court have conceded a wide scope to the discretion of the Board. We have no thought to retract or qualify them by anything now said. At times the Board has declined to permit a departure from the map. The situation must be rare indeed where the concession of such a privilege can be demanded as of right. A typical case is People ex rel. Werner v. Walsh (240 N. Y. 689). The owner whose petition had been denied, complained that he was the victim of arbitrary discrimination in that other applications had been granted at the instance of neighboring owners not differently situated. We found a basis in the record for the exercise of judgment. Not improbably the Board had made a mistake in granting like favors to other owners in the past. This did not mean that it was subject to a legal duty to enlarge the field of encroachment and thereby magnify the error. The question was not whether some one else ” had been favored.” The question was whether the petitioner ” had been illegally oppressed ” (Matter of Larkin Co. v. Schwab, 242 N. Y. 330, 336). We have had to deal with other cases where permits have been granted. Typical of these is People ex rel. Facey v. Leo (230 N. Y. 602). A lot in a residence district was already occupied by a stable. All that was asked was to turn the stable into a garage (Zoning Resolution, § 7-a). The barns and power house of a street railway were on the other side of the street. There were also two garages. Witnesses deposed that sleep was made difficult by the noise of the power house. Witnesses deposed also that the land could not be used with reasonable profit except for a garage or stable. The evidence filled the gaps that have been left uncovered here.

We thwart the scheme of the statute if we uphold a resolution for the concession of a privilege with neither evidence at the hearing, nor allegations in the answer to be accepted as a substitute for evidence. The Legislature has said that there shall be review by certiorari (Greater New York charter, § 719-a). Such review becomes impossible if without supporting evidence or equivalent averment the mere conclusion of hardship is sufficient and indeed decisive. There has been confided to the Board a delicate jurisdiction and one easily abused. Upon' a showing of unnecessary hardship, general rules are suspended for the benefit of individual owners, and special privileges established. Nothing is before us to justify or even suggest a doubt of the good faith and sincerity with which the power has been exercised. At the same time judicial review would be reduced to an empty form if the requirement were relaxed that in the return of the proceedings the hardship and its occasion must be exhibited fully and at large. Safeguards of this order have at times an aspect of triviality when our scrutiny is narrowed to one instance or another. Their value is perceived when the outlook is extended to something wider than particulars. Disclosure is the antidote to partiality and favor.

The order of the Appellate Division should be reversed and that of the Special Term affirmed, without prejudice to the renewal of the application to the Board, and without costs to either party (Greater New York charter, § 719-a, subd. 5).

Pound, Crane, Andrews, Lehman and Kellogg, JJ., concur.

Ordered accordingly.


author: Crane, J.

text:
    In the Matter of the Claim of Antonio Filitti against Lerode Homes Corporation et al., Respondents. The State Industrial Board, Appellant.
    Workmen’s compensation — master and servant — workman engaged in excavating alongside building injured by fall of part of cornice thereof entitled to compensation •— accident one arising out of employment.
    A workman, who, while digging a hole in connection with the erection of a building, was struck by a piece of cornice which fell from a building on the lot next to the place where he was working, is entitled to compensation under the Workmen’s Compensation Law for the.injury received. The danger from the falling cornice attached to the spot where the claimant was at work; it was peculiar to the situation and a risk which arose from working alongside or underneath a building. He was working within the zone of special danger and was injured through an accident arising out of his employment. (McCarter v. La Rock, 240 N. Y. 282; Allcock v. Rogers, 11 B. W. C. C. 149, distinguished.)

      Matter of Filitti v. Lerode Homes Corporation, 218 App. Div. 803, reversed.
    (Argued January 10, 1927;
    decided February 23, 1927.)
    Appeal from an order of the Appellate Division of the Supreme Court in the third judicial department, entered December 8, 1926, reversing an award of the State Industrial Board made under the Workmen’s Compensation Law and dismissing the claim.

      Albert Ottinger, Attorney-General (E. C. Aiken of counsel), for appellant.
    The order of the Appellate Division should be reversed. (Bandassi v. Molla, 234 N. Y. 554; Domres v. Syracuse Safe Co., 240 N. Y. 611; Thorn v. Sinclair, 10 B. W. C. C. 220.)

      Jeremiah F. Connor and Daniel Mungall for respondents.
    The injuries received by the claimant did not arise out of his employment. (Matter of McCarter v. LaRock, 240 N. Y. 282; Bateman v. Albion Combing Co., 7 B. W. C. C. 47.)
   Crane, J.

The claimant, Antonio Filitti, was employed by the Lerode Homes Corporation in constructing a brick building at 43 to 47 Seventy-fourth street, Brooklyn. He was a general laborer, and on the tenth day of October, 1925, was digging a hole in which to put an iron beam. While bending over at his work, he was struck by a piece of cornice which fell from the adjoining building, an apartment house, No. 39 Seventy-fourth street. No work was being done by the contractors on this apartment house. The claimant was digging alongside the apartment house which was on the lot next to the place where he was working. The cornice,, therefore, was almost directly above him.

The Appellate Division has dismissed the claim made for compensation under the Workmen’s Compensation Law, holding on the authority of Matter of McCarter v. LaRock (240 N. Y. 282) that, the accident did not arise out of the employment. We think the Appellate Division has misconstrued the McCarter case and that there is a marked distinction between the facts there involved and those which brought about the accident in this case. The claimant in the McCarter case was injured by an exploding shell while working on a building being erected by his employer. A shell which had been preserved on adjoining premises as a souvenir of the war exploded, and flying fragments not only injured the workman, but killed other people. The fact that the injured workman was on the adjoining premises was a mere incident, and did not in itself increase the risks from his work. That is, the danger from the exploding shell was not from its nature confined to the adjoining premises or limited to work carried on there. The adjoining premises were rendered no more dangerous by reason of the shell than the street or other nearby places. It was a danger shared by anybody and everybody within the radius of the carrying charge of the shell. Therefore, the danger to the claimant was not a risk peculiar to or arising out of his employment. This was the point made by this court in the McCarter case, and the one we considered distinguished it from the other cases cited. Chief Judge His cock in his opinion said: “ It was an accident absolutely detached from and foreign to his employment. The fact that the explosion happened upon the adjoining premises is of no consequence in the theory urged for affirming the award, for, if that theory is correct, the explosion might just as well have happened half a mile away.”

The McCarter case on this point was like Allcock v. Rogers (11 B. W. C. C. 149), where it was held that an employee injured in cleaning a plate on an outside door of a public house, and injured by a bomb, dropped by an enemy aircraft, was not entitled to an award. There was no special danger attaching to the spot where the man was told to work.

The case before us is different in this very particular. The danger from the falling cornice attached to the spot where the claimant was at work; it was peculiar to the situation, and a risk which arose from working alongside or underneath a building; the wall might fall down (Thom v. Sinclair, 10 B. W. C. C. 220), or articles might fall from above (Matter of Bandassi v. Molla, 234 N. Y. 554). This claimant was, therefore, working within the zone of special danger ” (Matter of Leonbruno v. Cham plain Silk Mills, 229 N. Y. 470), and was, therefore, injured through an accident arising out of his employment.

The order of the Appellate Division should be reversed, and the award of the State Industrial Board reinstated, with costs in all courts.

Cardozo, Ch. J., Pound, Andrews and Lehman, JJ., concur; Kellogg, J., not sitting.

Ordered accordingly.