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App. Div.]

FIRST DEPARTMENT, MARCH TERM, 1897.

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form, under the direction of the engineers employed by the mayor, etc., "and in conformity with the plans and specifications referred to in said contract, all the pneumatic work * described," etc. Upon the question of payments the provision is as follows: "Payments to be made monthly, at the times and in accordance with the provisions of the said contract between the party of the first part and the city of New York, excepting that the payment of percentage reserved shall be made on or before thirty days after the work embraced in this contract shall have been accepted by the chief engineer in charge of the said city contract."

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

FIRST DEPARTMENT MARCH TERM, 1897.

[Vol. 15.

Apart from the inconsistency involved, we think that such a construction is not only strained, but, in view of the attitude of the parties and what they were contracting about, does violence to the language used. The defendant had taken a contract for the construction of the entire bridge and had sublet to the plaintiffs "the pneumatic work," which involved that portion of the work under water and in connection with the piers and abutments which were to sustain the superstructure of the bridge. Both contracting parties knew what the testimony here shows, and, therefore, it is to be presumed that it was within the contemplation of the parties, when contracting, that after the pneumatic work was completed it would require two years or more to place the superstructure thereon and complete the bridge. The pneumatic work was a complete thing in itself, and might well have been the subject of an independent contract by the city, because in no way would it interfere with the details of the other portions of the work connected with the superstructure, which latter could not be even commenced until the pneumatic work was completed. Under the defendant's construction the plaintiffs would be obliged to wait two years or more before receiving their money, although they had done their work to the satisfaction of the chief engineer, and it had been examined and accepted by Hopper. It was to avoid any such result that the contract in words and terms provided that the work should be accepted, and the payment of the reserved percentage made on or before thirty days after the work embraced in the contract between the plaintiffs and the defendant should have been accepted by the chief engineer in charge of the city contract. Because, as we must observe, the exception removes the reserved percentage from the operation of the terms and provisions of the city contract, and the work to be accepted is that embraced in the McMullen-Hopper contract, and not that in the city contract the language being, "the work embraced in this contract shall have been accepted." etc. As correctly urged, therefore, by the respondents, if it had been intended that the payment for the plaintiffs' work should not be made until the city contract was performed, this exception would not have been made as to the reserved percentage, and a separate certificate as to this work would not have been required. It must be remembered, moreover, that the completion of the city contract

App. Div.]

FIRST DEPARTMENT, MARCH TERM, 1897.

was something over which the plaintiffs had no control. The defendant might abandon the work under the city contract before completion, and never complete it. Hence, this clause was inserted, providing a different method of payment under the McMullen-Hopper contract from that provided in the city contract as to the reserved percentage.

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

It is contended that by the city contract the chief engineer was not obliged and had no right to bind the city by accepting the plaintiffs' work, there being no provision for his giving a separate certificate, and further that the city would not be bound by any acceptance prior to the final certificate of the chief engineer. All this turns upon the one central idea, that the final certificate of the engineer as provided for in the city contract was not only a condition precedent, but a sine qua non to the plaintiffs' recovery of their portion of the reserved percentage. To such an argument there naturally occur two answers: One furnished by the contention of the APP. DIV.-VOL. XV. 47

FIRST DEPARTMENT, MARCH TERM, 1897.

[Vol. 15. defendant, who, in explanation of the difference between the language used in his contract with the plaintiffs and that in the city contract, states that it was intended to prevent the plaintiffs being affected in any way or delayed by reason of the refusal of the chief engineer to give the final certificate in case he should reject any portion of the work other than that performed by the plaintiffs. The defendant concedes that, as he understood it, if the work was completed and a dispute should arise, not with reference to the plaintiffs' work, but in regard to defects in the superstructure, from which there might result a refusal on the part of the chief engineer to furnish the certificate, under the language of the McMullenHopper contract, the plaintiffs would be entitled to recover. This seems to us to be a concession that, whatever the importance and weight to be attached to a final certificate as between the defendant and the city, it was not to figure so prominently or play any such significant part in determining the plaintiffs' right to their portion of such reserved percentage.

Again, we think that an argument which would hold the plaintiffs rigidly to the terms of the contract between the defendant and the city, over which they had no control, proceeds upon an entirely erroneous theory. The parties, as between themselves, were perfectly competent to enter into a contract for any specific portion of the work, to be paid for by the defendant irrespective of when, according to the terms of his contract with the city, he was to receive payment for the same work, and they could have agreed as to any means of determining whether the work was satisfactorily done, and could have left it, as they did here, to the judgment of the chief engineer. That the latter understood that, under the McMullen-Hopper contract, the acceptance of the plaintiffs' work was left to him, clearly appears from the certificate which he actually did give and from his testimony. In addition, we have the certificates of the other engineers upon the work and of the city officers, which covered the entire amount of the plaintiffs' work. And even though we assume that the city would not be bound by any acceptance of all the engineers on the work and by the certificates of the city's officers in charge of it prior to the final certificate of the chief engineer and the department of public works, this at most would be a question between the defendant and the city under the

App. Div.]

FIRST DEPARTMENT, MARCH TERM, 1897.

city contract, with which the plaintiffs had nothing to do, over which they had no control, and by which they were not bound except so far as they contracted to be bound. As already said, without regard to the terms of the city contract, the plaintiffs and defendant could contract in reference to some portion of the work, and if the plaintiffs fully performed such contract, and after its completion secured the acceptance of the one who by the terms thereof was selected by both parties as the arbitrator, then, having fulfilled all conditions, they would be entitled to recover.

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

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

As in our view, therefore, the parties intended to be bound by the determination of the chief engineer, the question litigated as to the acceptance by him was, upon the conflicting evidence, one of fact. It is not disputed that the work was completed in September, or that certificates were then given by the city to the defendant, covering all the work embraced in the plaintiffs' contract. Upon the question of the actual acceptance of the work, it was shown that the engineer ordered the succeeding work upon the contract to pro

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