First Department, December, 1911.

[Vol. 147. ment. This joint committee invited and received informal proposals from two companies already operating lines in the city of New York, to wit, the Interborough Rapid Transit Company and the Brooklyn Rapid Transit Company. After consideration the joint committee made a report favoring the execution of an operating contract upon terms satisfactory to the Brooklyn company, and which could apparently be carried out only by that company. It is a contract to be made as recommended by this joint committee that it is now sought to enjoin. The learned counsel for the plaintiff has argued before us with much force and earnestness that such a contract would be illegal (1) because it would violate section 10 of article 8 of the Constitution of this State, which forbids any county, city, town or village to give money or property, or loan its money or credit to or in aid of any individual, association or corporation, and (2) that it is ultra vires of the city of New York because no one could bid for the contract except the Brooklyn Rapid Transit Company, and hence that there can be no competition for the right to operate the railroad. The contract foreshadowed by the joint committee is in many respects an unusual and extraordinary one, doubtless because the problem to be solved was itself unusual and extraordinary, but we do not find it necessary at this time to consider or discuss the objections to it which are urged by plaintiff, and expressly forbear to pass upon them, because their discussion and consideration at this time would be premature and academic. For this reason the learned counsel for the respondents has wisely and properly declined to undertake at the present time to enter upon a defense of either the legality or constitutionality of the proposed contract. The act under which rapid transit railroads must be constructed requires that many preliminaries shall be observed before any contract for operation can become operative, in the course of which any proposed contract must withstand the scrutiny and obtain the approval of the counsel to the Public Service Commission and the corporation counsel, neither of whom would be likely to approve a manifestly illegal and unconstitutional contract. It must also be subjected to a public hearing, and must meet the approval both of the Public Service Commission and of the board of estimate and apportionment. No one of these

App. Div.]

First Department, December, 1911.

steps has yet been taken. The joint committee whose report has aroused the apprehensions of the plaintiff was, as has been aptly described by counsel, an extra-statutory or non-statutory body, and its report, although accepted and approved by the Public Service Commission and the board of estimate and apportionment, is really binding upon neither, and both are still free, as a matter of law, to propose and approve any contract which may commend itself to their respective judgments, however widely it may depart from the recommendations of the joint committee. There is, therefore, no such imminence of the execution of a contract as would justify a temporary injunction to prevent its execution, or even an examination of its legality. As to the contract for construction.

That portion of the proposed subway system which is to occupy Lexington avenue was divided into sixteen sections, for all of which bids were invited and received. These bids were made upon what is known as the unit basis, that is to say, instead of bidding a single price for the work as a whole, the classes of work were divided and subdivided into a great number of units, for each of which a separate bid was made. These bids were based upon construction contracts exhibited to the bidders which embraced (a) the contract proper setting forth the agreement between the parties, (b) the specifications setting forth the way in which the work was to be done and the nature of the materials to be used, and (c) the plans or contract drawings. Four of these contracts have been let to the Bradley Contracting Company, and are now in the course of execution. It is these that plaintiff seeks to enjoin. It is not necessary to dwell at length on all the grounds upon which an injunction is sought, for none of them are in our opinion sufficient to justify the issuance of an injunction pendente lite, and the halting of the work until a trial can be had. One of the objections is that, after the advertisement for bids and before the letting of the contracts to the defendant Bradley Contracting Company, the Public Service Commission decided that it would thereafter alter the plans by slightly modifying the size of the conduit. Hence, as it is claimed, the committee let a different contract from that for which it had invited bids. Both the act under which the Commission proceeded and the

First Department, December, 1911.

[Vol. 147. contract which it offered to bidders contemplated and provided for possible modification of the plans and specifications, and the modifications upon which the Commission have now determined are clearly such as might lawfully have been determined upon and made after execution. In point of fact the contracts have been executed exactly as submitted to bidders, and the contemplated changes in the plans are yet to be made. Whether or not these changes are of such a character as would probably induce a change in the unit prices bidden by contractors, was a matter for the Commission to determine. As to the greater number of the sections of the Lovington avenue route, it has concluded that the projected changes may make a difference and has determined to readvertise. As to the four contracts now under consideration, it has concluded that the changes would make no difference. It is not our duty to review the exercise of its discretion in this regard.

Concerning the objection that the construction contracts required the separate and independent approval of the mayor, we are of opinion that contracts for construction only do not require to be thus approved. (See Greater N. Y. Charter [Laws of 1901, chap. 466], §§ 74, 242, as amd. by Laws of 1905, chap. 629; Id. § 74, as amd. by Laws of 1905, chap. 630; Rapid Transit Act [Laws of 1891, chap. 4], § 5, as amd. by Laws of 1905, chap. 631, and Laws of 1909, chap. 498.) The making of a contract by the city of New York merely for the construction of a subway, sewer or other sub-surface structure which is to be and remain the property of the city does not grant to the contractor a franchise or right to use the street within the meaning of the statutory provisions requiring in certain cases the separate and independent approval of the mayor. Whether such approval would be requisite to a contract for operation is a different question which is not presented on this appeal and which we do not consider. The defendant Bradley Contracting Company objects that the city of New York, which is contracting party with it, is not a party to the action, and urges with much force that no action should be taken holding the contracts to be invalid unless both parties to the contract are before the court, so that both shall be bound by the judgment or order to be entered. This objection is not without weight, but the con

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First Department, December, 1911.

clusion at which we have arrived renders it unnecessary to pass upon it at this time.

The order appealed from is affirmed, with ten dollars costs and disbursements.

INGRAHAM, P. J., CLARKE, MILLER and DOWLING, JJ., concurred.

Order affirmed, with ten dollars costs and disbursements.

FRANCIS C. NEALE, INCORPORATED, Respondent, v. NEW YORK STEAM COMPANY, Defendant, Impleaded with HUDSON COMPANIES and HUDSON AND MANHATTAN RAILROAD COMPANY, Appellants.

First Department, December 1, 1911.

Railroad-negligence

construction of terminal building for subway -injury to goods in cellar — proximate cause - certificate to do work-conditions - liability of company - right of one not party to contract to enforce obligations of certificate pleading-saving objection for appeal.

Where a corporation acting as the construction company for a railroad let contracts for the erection of a terminal building partly under ground, and it appears that the necessary excavation for the building, the sinking of caissons and the construction of a sewer which was a necessary part of the work, caused the soil in an intersecting street to subside, that this in turn caused the pipes of a steam heating company, which were lawfully in the street, to break so as to permit the steam to escape and that the escaping steam overheated the cellar and basement of a building used for the storage of wines and liquors thereby injuring the goods, there is an unbroken chain of cause and effect connecting the work and the damage.

Although the court found on the trial of an action to recover for the injuries that there was no evidence of negligence in the construction of the sewer and the jury found that the other work was negligently done, still all the building operations were so inseparably connected as to constitute but a single piece of work.

As the work complained of was all done in a public street it must be regarded as having been done pursuant to the authority of a certificate granted by the board of rapid transit railroad commissioners. Where such certificate provided that the tunnel company should maintain and care for all underground structures during the progress of the work

First Department, December, 1911.

[Vol. 147. and should make good to all property owners any damage caused by the fault or negligence of the company or of any contractor or sub-contractor doing any of the work, both the construction company which did the work and the railroad company which authorized it are liable for any injury caused thereby whether it was the result of negligence or was a necessary consequence of the work done under the authority of the certificate.

Neither company can escape liability on the claim that part of the work was done by independent contractors, or because the plaintiff did not separate the damage done by the construction of the building from that done in the construction of the railroad, nor that resulting from negligence from that occurring as a necessary consequence of the work. As the railroad company and the construction company by accepting and doing work under the certificate assumed the absolute duty safely to maintain the sub-surface structures, any one injured by a breach of that duty has a right of action whether or no he was a party to the contract. Although the work of constructing the railroad was for a public purpose the right to undertake it was conditioned upon the assumption of the duty imposed by the certificate, and it is immaterial whether the failure to discharge that duty was due to negligence. Where the complaint made no reference to the franchise or certificate pursuant to which the work was done, merely alleging that it was the duty of the defendants to perform the work so as not to injure plaintiff, but on the trial the certificate was introduced in evidence without objection, it is too late on appeal for the defendants to contend that the contract for breach of which the action was brought was not sufficiently pleaded.

APPEAL by the defendants, Hudson Companies and another, from a judgment of the Supreme Court in favor of the plaintiff and against said defendants, entered in the office of the clerk of the county of New York on the 1st day of November, 1910, upon the verdict of a jury for $4,349.97, and dismissing the complaint as to the defendant New York Steam Company, and also from an order entered in said clerk's office on the 11th day of November, 1910, as amended by an order entered on the 23d day of November, 1910, denying the appellants' motion for a new trial made upon the minutes.

The plaintiff, as lessee for a term of years, was in possession of premises on the northeast corner of Dey and Church streets in the borough of Manhattan. It brought this action to recover damages for injuries to wines and liquors stored by it in the cellar and basement of said premises during the years 1906 and 1907, caused by the overheating of the basement and cellar by steam which either escaped from the steam pipes of