
    The Camden Iron Works, Appellant, v. The City of New York, Defendant, Impleaded with William H. Masterson and Others, Respondents.
    
      Contract to supply materials to a city contractor “ in accordance with the specifications and plans of the Department of Water Supply ” -^refusal to supply material because the inspection was, as- alleged, unreasonable — when it constitutes a breach of the contract, in the absence of pyroof of bad faith on the part of the inspectors.
    
    "William H. Masterson entered into a contract with the city of New York to construct a pipe line. r The contract specified the quality of the pipe and castings to be used in the work, and - provided for the determination of such quality by tests to be made by inspectors appointed by the city at the foundry where the pipe and castings were manufactured, and also upon the line ,of the work. Masterson then entered "into a contract with the Camden Iron Works, which, after reciting the contract between Masterson and the city of New York, com tained an agreement on the part of the Camden Iron Works to furnish and deliver a portion of the pipe and -castings required for the performance óf the contract with the -city, and provided that such pipes'-and special castings should “be made in accordance with the specifications and plans of the Department of Water Supply, New York City.”
    Soon after the Camden Iron Works entered upon the performance of its contract it complained to Masterson of the inspector sent to its foundry to inspect the pipes, saying that such inspector rejected pipes and castings arbitrarily and unreasonably and for unimportant defects.. It finally notified Masterson, who insisted that he could not control the inspector’s conduct, that it would decline to make any more pipe until it was assured of what it considered fair inspection. Masterson then- notified it that unless -it proceeded to make deliveries of i pipe within five days he would purchase the pipe elsewhere. The Camden Iron Works did not furnish the pipe within five days, and Masterson elected to terminate the contraqt.
    Upon the trial of an action to foreclose a mechanic’s lien filed by the Camden Iron Works against Masterson for the price of pipe which -the plaintiff tendered to Masterson after he had assumed to terminate the contract, and which 6 7 Masterson refused to accept, it appeared that Masterson- did everything he could to secure inspectors that would be satisfactory to the plaintiff. It further appeared from the testimony of the inspectors that they acted in good faith in rejecting the pipe, and that it did not comply with the contract and specifications.
    
      Held, that the plaintiff’s complaint was properly dismissed;
    -That-, having accepted the -contract with knowledge that Masterson could not use the pipe- unless it was accepted by the inspectors appointed by the city,1 the plaintiff could not, in the absence of any proof of bad faith on the part of Masterson, the city or the inspectors, insist upon the -acceptance of pipe rejected by the inspectors.
    Van Brunt, P. J., and Patterson, J., dissented.
    
      Appeal by the plaintiff, The Camden Iron Works, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of New York on the 20th day of June, 1904, upon the decision of the court rendered after a trial at the New York Special Term, except that part of said judgment which dismissed the complaint as to the defendant, The City of New York.
    
      Henry Galbraith Ward, for the appellant.
    
      L. Laflin Kellogg, for the respondents.
   Ingraham, J. :

. The plaintiff filed a lien upon'an amount due to the defendant Masterson under a contract by which the plaintiff was to supply to Masterson certain iron pipe to be used by him in the performance of a contract with the city of New York. The plaintiff, after furnishing some pipe under the contract for which it was paid, refused to complete the contract upon the ground that the inspectors appointed by the city to inspect the pipe before delivery had acted unjustly and arbitrarily in rejecting pipe that the plaintiff proposed to deliver, and stated that it would not continue supplying the pipe under the contract unless this complaint was remedied. After considerable correspondence Masterson gave the plaintiff notice that, unless it complied with its contract within a specified time, he would procure the pipe elsewhere, and the plaintiff not complying with this notice, Masterson procured other pipe and so completed his contract with the city. After this notice was given the plaintiff shipped certain pipe to Masterson which he declined to accept, and it was to recover for this pipe so shipped that this action was brought.

The contract between the plaintiff and Masterson was dated December 24, 1900,and recited that Masterson had, on the 16th day of November, 1900, entered into a contract with the city of New York to furnish and lay certain cast iron pipe and special castings, all as set forth in the specifications in said contract between the city and Masterson specifically referred to, and that the plain-. tiff agreed to furnish and deliver to said Masterson “ One-third (-J) of the Cast Iron Pipes, and one-half (£) of the Special Castings named on page nine (9) of said specifications, and to ■ deliver them on cars at Aqueduct and Baldwin Stations and at stations between them, on the. Long Island Railroad, and the said William H. Master-son does hereby agree to receive the pipes and special castings at the above-named stations, and' to pay for them at the rate of Twenty-five dollars and forty cents ($25.40) per ton of 2,240 pounds for the straight pipes; three cents (3c) per pound for ordinary special castings’ and six cents (6c) per pound for such breeches pipes, as ’ may be needed. All of the1 said pipes and special castings are to be made in accordance with the specifications and plans of the Department of Water Supply, New York City, and are to be delivered by hot later than the first day of July, A. D. Nineteen hundred and two.” Subsequently, on February 5,-1901, by a subsequent contract, it was agreed that the plaintiff should furnish and deliver to Masterson one:half instead of one-third of the cast iron pipes therein mentioned. The contract between Masterson and the city of New York specified the quality of pipe and castings that were required and provided for certain tests to determine the quality of the pipe to be delivered under the contract. These tests were to be made by inspectors appointed by the city of New York at the cost and expense of Masterson. The specifications upon .which this contract was made between the city and Masterson provided for the- tests to-be made. One clause of these specifications provided: “ -The castings shall be free from scoria, scabs, cold shuts, sand holes, blow gates, gate shrinks, checks and core cuts, together with any and all imperfections ■ caused by cracked or crushed cores, or other defects- or imperfections caused by improper materials or manipulation. No plugging, cementing or other stopping up of the holes and flaws will be allowed, and no painting shall be done until after the castings have been inspected by the authorized agent.” Another clause provided : All the 48 inch pipe and special' castings shall be subjected to a proof by water pressure of 200 pounds to the square inch; all of the 36 in. and 30 in. pipe and special castings shall be subjected to' a proof by water pressure of 250 pounds to the square inch; all the pipe and special castings. of a smaller diameter than 30 in. shall be subjected to a proof by water pressure of 300 pounds to' the square inch. Each pipe while under the required pressure shall be rapped with a hand hammer from end to-end to discover whether any defects.have been overlooked. Any pipe or special casting which fails under this test shall be rejected.. This inspection and test shall be made at the foundry under the direction of the Inspector and at the expense and risk of the Contractor.” Another clause provided: “ The Contractor shall notify the 'Engineer at léast seven (7) days previous to the commencement, of the manufacture of the castings, of the time and place where the; manufacture is to commence, in order that the Inspector may be present and supervise tile same; any or all castings which may be made without complying in every respect with the terms of this paragraph shall be rejected.”

On the 3d of January, 1901, Masterson inquired of the plaintiff’s agent when the plaintiff would be' ready for the inspector of pipes,, and the plaintiff’s agent answered that it would require the inspector-in one or two weeks. Subsequently, on January 15, 1901, the-plaintiff wrote to Masterson, saying that it would be ready for-the inspector on the seventeenth. Shortly after the plaintiff commenced to complain of -the inspectors, and stated that the experience that it had had with this inspector in the past was such as-to warrant it in strongly objecting to his selection for this part of the work; that it was impossible to make pipes which were absolutely perfect in all points, and that the inspector referred to, on previous work, made it a practice to reject thoroughly good pipe fully coming up to the spirit of the specifications, and pipes that would be accepted by other inspectors. Again, on January 24, 1901, the plaintiff asked whether Masterson had been able to secure “ satisfactory inspection.” And on January twenty-fourth Masterson wrote to the plaintiff to say that he hoped to be able to give definite information in regard to having the inspector transferred. Again, on February twenty-sixth, Masterson wrote to the plaintiff stating that he had endeavored .to obtain instructions for the inspector to accept certain pipes which he had rejected. On September 18 and 23, 1901, the plaintiff again' complained that certain of its pipes had been rejected for unimportant defects, and that the work had been stopped because of impracticable inspection. During all this time Masterson was insisting upon the plaintiff’s complying with its contract; that he had not the control of the inspector, and that. plaintiff should supply pipe in accordance with- the contract that it had made, and there were constant promises by the plaintiff to Comply with these demands.

In July and August, Masterson was insisting, upon the plaintiff-complying with its contract, and complaining of lack of pipe ■required for the work, to which plaintiff replied by constant complaint as to inspection, with promises to ship the pipe; and finally, on September 16, .190.1, the plaintiff wrote .the defendant: “We have been doing our utmost to furnish the needed castings on your order in spite, of most unreasonable, retarding and exceedingly ■costly Inspection. Rejections of large expensive pieces have been made steadily, for most trivial reasons, until now we are compelled to advise you Jhat until ,the difficulty is remedied, we shall’ be obliged to cease making any further pieces, either of specials or of pipe. It is impossible to work under the unprecedented treatment which we have suffered under this present inspection. * * * In the face of this experience we are helpless and we are compelled, therefore, to write as above that we cannot proceed under such experience.” In - answer to - this letter, on September., seventeenth, Masterson wrote the plaintiff : Answering your letter of 16th, regarding inspection we submitted your letter this a,,, m. to the Department ■ and were informed that- the trouble lies in the' pipe and castings which do not come, up to the requirements. Now of course We have done what we could in this matter previously and how, but can accomplish little. You state you shall be obliged to cease making the pipe and specials, and this Mull place us in a bad position as we need the specials in the.worst way as you are aware.. Can you not hurry the^36" pipe and 24" curves as per our telegram. ? These are essential to further progress in the work on the first section.” On November 19, 1901, Masterson wrote the plaintiff that he had not received a shipment of straight pipe since October second, and asking if the plaintiff had cast any since, as lie, would like to know how .the matter stood; and on- November twentieth the plaintiff Mu-ote , to Masterson: “We note your esteemed favor of the 19th as to 48" B. & S. pipe. We. wrote you that the inspection under which we have been compelled',to work had become unendurable, and we 'declined to make any more pipe until we could be kssured of fair and reasonable treatment. We have awaited the action of the( Department on this point. When they are ready to furnish us with an inspector who will treat our work as do other inspectors — even the most exacting — we will arrange to put in your work in the space occupied by other work which we put in while this question was unsettled, and which will run out in two or three weéks. There are many pipes now in our yard — rejected fortrifling reason— which should be taken, and we hope consent will be given to ship them.” On December 4, 1901, Masterson wrote that the plaintiff had failed to observe the conditions of its contract from the beginning, not only in the quality of pipe delivered, but as to the time of delivery; that the damage that Masterson had suffered was very great; that in a letter of November twentieth from the plaintiff it refused to make further deliveries unless Masterson was able to control the inspection of the city' — a matter absolutely beyond Masterson’s power; and the letter continued: “ I therefore give you notice that unless you proceed at once, within five days to make proper, sufficient and continuous deliveries of pipe under my contráctil will treat your failure so to do as a breach of contract, purchase the pipe elsewhere, and hold you responsible, both for the past and future damages resulting from your conduct.”

, It was proved on behalf of the defendant that the last delivery that was made by the plaintiff of any straight pipe was on October 2, 1901; that- there was some special sent after that, but no straight pipe delivered, and there was no attempt to comply with this notice of December 4, 1901, by the plaintiff until the latter part of December. There is no dispute but that the plaintiff, prior to its letter of November twentieth, had stopped work under the contract, had refused to make any more castings until an inspector was appointed who would meet with its views as to the sufficiency of the pipe, and then stood on its notice that it would refuse to further comply with the contract. The necessities of the situation required that Masterson should obtain pipe to complete his contract with the city, as he was under very severe penalties for a failure to comply with it, and immediately after the letter of December fourth he endeavored to secure pipe from other foundries, and finally succeeded in February in making a contract under which pipe was delivered and used. The inspectors who had acted on behalf of the city were called and testified as to the inspection. They testified that they acted in entire good faith in rejecting the pipe, and that it did not comply with the contract and specifications, and the whole evidence shows that Masterson did everything that he could do to secure inspectors who would he satisfactory to the plaintiff. It is apparent from this testimony that when it made the contract the plaintiff understood the situation and the conditions of the contract and specifications between Masterson and the city. It understood that the pipe which it' furnished for Masterson was to pass an inspection by the city inspectors, and the pipe whicli the city, inspectors refused to accept would be perfectly useless to Masterson as it could not be used by him in his contract with the city. A contractor under those circumstances would not be justified in refusing to comply with his contract because the inspectors, who- by the contract were to determine what pipes should be accepted as a compliance with the contract, refused to accept pipes which he claimed should be accepted. What the plaintiff wanted was to have its views as to the quality of, the pipe which it manufactured adopted, instead of the views of the inspectors who by the contract with the city were to determine whether or not the pipe was of the quality-required by the contract, and when plaintiff took the position that it would refuse, to deliver anymore pipe until the inspectors who were to determine whether the pipe was in compliance with the contract or not were changed, there was a distinct breach of its contract which justified Masterson in terminating it and refusing to accept any pipe subsequently offered, and when Masterson in his letter of December 4, jL901, gave the plaintiff five days’ notice to commence delivery of the pipe according to its contract, with a notice that unless it commenced such delivery within that time he would make other arrangements for the completion of the Contract, and the plaintiff failed to comply with that notice, there was an end of the contract, and Masterson was under no obligation to accept further, pipe shipped by the plaintiff. From beginning to end the plaintiff took an untenable position in regard to this inspection, and there is not a particle of evidence to show that there was any bad. faith on the part of Masterson or the city authorities. The utmost that can be said is that there was a difference of opinion as to the ■quality of the pipe manufactured by the plaintiff and the inspectors of the city, a condition which the -clauses in the contract and specifications requiring an inspection by the city inspectors was. expressly designed to meet, and by it the determination of that question was to rest upon the city inspectors.

The principle stated in Montgomery v. Mayor (151 N. Y. 249), I think, applies. That was an action by contractors against the city for damages sustained in consequence of the arbitrary acts of the inspector in refusing to accept materials which the plaintiffs contended were a compliance with the contract, but which the inspector had declined to pass. In affirming a judgment for the defendant in that case the court said: “ The effect of these provisions was to vest in the inspector a right or capacity to pass upon the performance of the work, which came very near to constituting him, as • between the parties, the judge as to that matter. The plaintiffs’ ' cause of action for damages is based upon an increased cost of the work, alleged to be due to' the action of the inspector in delaying' the work, through his rejection of. materials which were in accordance with the plans and specifications. The plaintiffs’ evidence" shows that the inspector frequently did reject the pipe and cement intended to be used, and, possibly enough, that he was very arbitrary in doing so. * * * It may be true that his objections were not sound, and perhaps his superior officers should have listened more indulgently to the plaintiffs’ complaint concerning the inspector’s action. But, assuming the truth of all this, we fail to see how any cause of action has arisen against the city for these damages. It would be very extraordinary, and we think it would constitute an unsafe precedent in future cases, if contractors with the city under these contracts could maintain actions against it for damages, where the execution of the work contracted for was delayed, upon the ground that the delay was caused by the officers ■ who, by the force of the contract, were invested with the power of supervision.”

While in this case the plaintiff was not executing a contract made between itself and the city, it was proceeding to supply to a city contractor pipes which were to be used under the contract with the city, with knowledge - of the fact that before Masterson could use these pipes they would have to be accepted by the city’s inspector who, under the contract between Masterson and the city, was given authority to pass upon the quality of the pipe to be used in the per- , formance of the contract with the city. In the absence of any proof of bad faith on behalf of Masterson,. the city or the inspectors in rejecting pipe manufactured by the plaintiff, the plaintiff could not insist that its pipe should be. accepted when rejected by the inspectors. If, however, the pipé rejected did comply with .the contract and plaintiff was not bound by the decision of the inspect- . ors, it could havé 'délivered the pipe to Masterson and then insisted on such a: delivery as a performance of the contract.

Whether or not this inspection was arbitrary or unnecessarily severe is not the question ; and the testimony which w.as excluded" by the court was entirely immaterial in determining the question at issue, for, upon the undisputed testimony;, the plaintiff gave notice to Masterson that it would refuse to proceed further with its contract, and Masterson' acted upon that assumption, treated the contract as terminated and proceeded to obtain the pipe necessary from other parties. I think that Masterson thus acted clearly within his right, and that the plaintiff had nó cause- to recover for the pipe subsequently delivered.

My conclusion is that the. judgment appealed from’ should be affirmed," with costs.

McLaughlin and Laughlin, JJ., concurred; Van Brunt, P. J., ’ and Patterson, J., dissented.

Patterson, J. (dissenting):

This action was. brought to foreclose a mechanic’s lien'filed by the plaintiff against the- city of New'York; William’IT. Masterson, a contractor with the city; Thbmas.J. Dunn , and John H. Deeves, sureties upon a bond given under the statute to remove the lien and as security to the plaintiff for its claim. After the trial, judgment was entered upon a decision of .the court dismissing the complaint, canceling the lien and directing judgment in favor of the defendant William H. Masterson against the plaintiff upon a counterclaim. [It was stipulated on the trial that no liability rests, upon the city of New York, and consequently that defendant has no further interest, in the litigation.' The contest is, therefore, between the plaintiff and the other defendants. The contract between Master-son and the city was for the furnishing, delivering and laying of a large quantity of forty-eight-inch cast iron pipe for a double pipe line to be laid between “ the Milburn engine house and the Milburn efflux chamber, and for the single pipe line from that point to the gate chamber at Spring Creek,” and for “ the furnishing and setting of the necessary check valves and stop cocks,” pursuant to specifications annexed to the contract, which contract provided that “ each pipe, while under the required pressure shall be rapped with a hand hammer f^om end to end to discover whether any defects have been overlooked. Any pipe or special casting which fails under this test shall be rejected. This inspection and test shall be made at the foundry under the direction of the Inspector and at the expense and risk of the Contractor.” ■ It also provided that a final inspection should be made after delivery of the articles on the line of the work. On December 24,1900, Masterson entered into a contract in writing with the plaintiff, through its agents, Messrs. R. D. Wood & Co., in which the contract with the city of New York is referred to, and in which it is provided that the plaintiff should furnish to Masterson one-third of the cast iron pipes and one-half of the special castings; “ all of the said pipes and special castings are to be made in accordance with the specifications and plans of the Department of Water Supply, New York City, and are to be delivered by not later than the first day of July, A. D. Nineteen hundred and two.” The contract with the plaintiff was subsequently modified on February 5, 1901, and by the modification the plaintiff agreed to furnish one-lialf, instead of one-third, of the cast iron pipes. Deliveries were made by the plaintiff to Masterson of some of the materials embraced in the contract between those parties, and it is alleged in the complaint that the value of such materials so furnished was $83,893.17, upon which a payment of $67,666.01 had been made, leaving an amount due and owing by Masterson to the plaintiff of $16,227.16. It was found by the trial-court that the amount due to the ¡fiaintiff under the contract for pipe and castings, which it would have been entitled to receive had it not been guilty of a breach of its contract, was the sum claimed by the plaintiff,' and it was also found that the plaintiff had been paid on account the amount admitted. As against the claim of the plaintiff for the balance, the defendant Masterson set up in his answer a counterclaim, in which, among other things, it was alleged that the plaintiff was guilty of a breach of its contract and that it had' failed to perform and carry out the same; that it did not deliver pipe andi castings as the contract required, and had failed and refused to carry' out the terms and cbnditions of the contract on its part to be performed. The defendants Dunn and Deeves in their answer set' up as separate defenses the breach of ■ the'cori tract as alleged in the answer of the defendant.Masterson. The plaintiff in its reply admitted that the cast iron pipe-and special' castings mentioned in the counterclaim were to -be furnished and delivered to the defendant as mentioned in. the' specifications of Masterson’s contract with the city, but it did ’not admit that it agreed- to deliver the pipe' within the time mentioned' in the answer. Respecting the substance of the counterclaim, the plaintiff alleged that rió inspectors were furnished to it before the middle of February, 1901, and that the inspection of the pipe and special castings manufactured by it was then and thereafter so unfair, unreasonable and improper that much of the pipe and castings manufactured Jby \ ■it was rejected, although they fully conformed to the specifications contained in the defendant’s contract with the city. As another defense to the counterclaim the plaintiff admitted that,. though it- did on or about the 16th of September, 1901, refuse to continue manufacturing until a reasonable inspection was given its work, still it was ready immediately to deliver pipe and special castings winch had been unreasonably rejected and which conformed to the specifications contained in the defendant’s contract with the > city of New York, arid that it subsequently continued to manufac- • ture and deliver, and the defendant continued to accept, pipe and ' special castings from it until on or about December 30, 1901, when the defendant Masterson refused to accept the pipe already delivered at-Valley Stream and pipe actually in transit, and notified the plaintiffs that he would make a contract with other parties for the pipe yet to be delivered.

That the plaintiff did not deliver pipe to Masterson in accordance with the terms of its contract is-clear, but we are not able to conclude from the evidence that Masterson is entitled to recover damages for mere delay. ■ There is in the record enough to indicate that the failure to deliver from time to time was a matter which the ' parties regarded as something not insisted upon by Masterson arid possibly waived by him. The real controversy relates to the plaintiffs having an honest, valid and sufficient excuse for refusing to proceed with its contract. •

The relations established between the plaintiff and Masterson by their contract are plain. The plaintiff in no way bound itself to .all the terms and conditions of Masterson’s contract with the city. It agreed to manufacture one-half the pipe and a certain portion of the special castings. Nevertheless, it was bound to f urnish such pipe as complied with the specifications of the contract between Masterson and the city. Its contract with Masterson required that all the pipe and special castings should be made in accordance with the specifications and plans of the department of water supply. The specifications of the contract require that the castings “ shall be free from scoria, scabs, cold shuts, sand holes, blow gates, gate shrinks, checks and core cuts, together with any and all imperfections caused by cracked or crushed cores, or other defects or imperfections caused by improper materials or manipulation.” The contract between Masterson and the city provided that pipe to. be furnished should be inspected by inspectors appointed or . selected by the city of New York, and it recites, as. before remarked, that each pipe while under the required pressure shall be rapped with a hand hammer from end to end to discover whether any defects have been overlooked. Any pipe or special casting which fails under this test shall be rejected. This inspection and test shall be made at the foundry under the direction of the Inspector and at the expense and risk of the Contractor.” It also provides for a final inspection of the pipe and special castings after delivery on the line of the work, and that the approval of any pipe or casting by the inspector shall not prevent its rejection if any imperfection shall be discovered at any time before the final acceptance and payment for the entire work included in the contract. Although the plaintiff was not bound by all the terms of the contract between Masterson and the city, its officers understood that the articles to be manufactured and delivered by them under the contract with Masterson were to be subject to the inspection provided for in his contract with the city. The best evidence of that is, that the plaintiff acted upon that understanding and placed its reply to the counterclaim of Masterson upon the ground that the inspection by the city inspectors of its product was not made in good faith and that much of the product of its factory intended for Masterson was arbitrarily and unjustly rejected by those inspectors. In addition, it invited ^he attendance of the inspector! While the inspectors were not, in a strict sense, agents of Masterson, yet by his contract with the city, he clothed them with authority to pass upon the sufficiency of the articles to be furnished. He made the sub-contract with -the plaintiff in view of the inspection thus to be' made, and he had stipulated with the city that it be made at the place of manufacture. It was with his consent that the inspectors went there, and the plaintiff contracted with him and not with the city as to inspection. That inspection was required for Masterson’s protection. There was no privity between the city and the plaintiff. Masterson authorized the city inspectors to act, and if they actecT in bad faith the plaintiff had no remedy against or claim upon the municipality, Tlie right of inspection was conceded, but the good faith of the inspectors in rejecting the articles is open to inquiry. If the articles were manufactured in accordance with the specifications Masterson was under obligation to take them. If they did not conform to the specifications, and were honestly and fairly rejected by the inspectors, then there was a breach of the contract by the plaintiff in refusing to make deliveries, and it would properly be held responsi- • ble for damages sustained.

It is urged by the. respondents that the refusal of the city inspectors to accept the pipe would not justify the plaintiff in refusing to perform its contract. We are of opinion that it would. Misconduct of the inspectors amounting to bad faith would certainly have been an excuse to Masterson (Gearty v. Mayor, etc., of New York, 171 N. Y. 61), and the same rule should apply between'the plaintiff and the defendant. The contract, although not based in express terms upon city inspection, was construed and acted Upon as requiring the plaintiff to submit to that inspection, and under the reply of the plaintiff to the counterclaim and the proof as made it is immaterial that a provision to that effect was not inserted in the sub-contract.

The facts in connection with the refusal of the plaintiff to complete the contract with Masterson are, in brief, the following : On January 15, 1901, the plaintiff notified Masterson that it was ready for the city inspectors / they went to the plaintiff’s factory early in .February and deliveries under the contract commenced soon thereafter. It was claimed by Masterson that the pipes were not delivered in sufficient quantities, and on February twenty-fifth Draddy, Masterson’s general manager, went to Philadelphia, where he was informed that the plaintiff was having trouble with the inspector. There still being some delay in deliveries Draddy went again to Philadelphia on March second and was again told that the difficulty was with the inspectors; that the pipes were rejected for trivial and insufficient cause. This condition continued until July twenty-sixth when Draddy again went to Philadelphia and the same reason was assigned for delay. During all this time complaint was being made by the city. On September sixteenth, in answer to demands for more pipe, the plaintiff wrote Masterson : “We have been doing our utmost to furnish the needed castings on your order in spite of most unreasonable, retarding and exceedingly costly inspection. Rejections of large expensive pieces have been made steadily, for most trivial reasons, until now we. are compelled to advise you that until the difficulty is remedied, we shall be obliged to cease making any further pieces, either of specials or of pipe. It is impossible to work under the unprecedented treatment which we have suffered under this present inspection.” Masterson replied that he had submitted the plaintiff’s letter to the department and was notified that the trouble lay in the pipe and castings which did not come up to requirements. Again on September twenty-fifth, Masterson wrote urging deliveries, and to this letter a telegram was received, asking him to meet the plaintiff’s treasurer. At this meeting on September twenty-sixth, the representative of the company stated that it could not make pipe under the inspection and would not make any further deliveries. Nevertheless on October second a further shipment was made which was received about the fifteenth. After that Masterson continued to urge further deliveries, and on November nineteenth he wrote stating that lie had received no shipment since the one of October second, and asking how the matter stood. On November twentieth the plaintiff replied : “ We wrote you that the inspection under which we have been compelled to work had become unendurable, and we declined to make any more pipe until we could be assured of fair and reasonable treatment.” On December fourth Masterson notified the plaintiff that unless it proceeded within five days to make deliveries he would treat the failure: to do so as a breach of the contract and purchase elsewhere. Yo pipe within the time fixed b.y this notice was received, and Masterson made efforts to secure the balance at the most reasonable and favorable figures, and finally entered into a contract with the United States Cast Iron Pipe and Foundry Company!

From all this evidence we think it is established that there was a breach of the contract on the part of the plaintiff after December fourth which justified Masterson in procuring the balance of the pipe from sources other than the plaintiff, unless the plaintiff had a valid excuse for its default. Masterson was not bound to look to •* such other sources of supply until it was definitely ascertained that the plaintiff would not proceed with its contract. The excuse consists in the alleged Unfairness and bad faith of the inspectors. The question then remains of the character of the inspection made by the city inspectors. Was it so Unreasonable and unfair as to justify the plaintiff in the course it pursued respecting its contract? The inspection was made at the factory of the plaintiff by three inspectors, Bennett, Bates, and .Samuels, who were witnesses called by the defendant Masterson. Bennett was a “ superintendent inspector-.” . He testified that he inspected nearly all the pipe manufactured by the plaintiff after April'tenth, and that he found defects therein; and that “ none of these pipes that I rejected were" frée'from some-'of • the defects that are mentioned in Section 90 of the contract.”. Bates, another inspector, testified at great 'length as to the finding ‘ of ' defects in the pipe; that some he could see with the naked eye, and" that he would then "test them with the hammer to discover how deep or extensive they Were. Samuels, another inspector, who accompanied Bates, also testified to the inspection and the use O'f the hammer, and that the pipes rejected had defects. ■

On all the evidence upon the subject of inspection, there - arose a disputed question of fact. Although no precise finding was made upon that question by the trial judge, he must "have resolved it in "favor of' the defendant Masterson, and under the proofs we would' not feel justified in reaching any other conclusion; but there are two erroneous, rulings of the court in the rejection of evidence offered by the plaintiff which should have been allowed- on the issue of the character of the inspection. The obvious intent of the plains tiff was to show that the inspection made by the hammer in the way in which it was made injured the pipe, and that defects for which much of it was rejected were created by the inspectors. It is fairly to be inferred from all the evidence.that scoria to some slight extent will be present in all castings such as were the subjects of the plaintiff’s, contract. . Bates testified that whatever scoria there was would necessarily, in such pipe castings, rise to the top of the spigot end,, because it would bp lighter than the molten iron. He testified that the majority of the pipe he rejected was defective in the spigot end,, and that he discovered the defects by the use of the hammer on.the outside edge; that the defects he found were in the rim and in the base of the head; that they were discovered by the eye, but that if his eye told him there was scoria there that would not be enough to-reject the pipe. He would then use the hammer. If there, were a greater amount of it he would have the pipe cut. If there were other indications of scoria, but not very much to be seen, he would want to use the hammer for the purpose of seeing how deep it went; that it was not that the pipe must be absolutely free from scoria, but must be so far free that the usefulness of the pipe would not be affected; that a little,' perhaps, would be of no damage — and he said that it was scoria to a large amount for which he would reject the pipe. Samuels testified that he accompanied Bates and inspected the pipe at the plaintiff’s factory. His method of inspection was slightly different from that followed by Bates, but the use of the hammer was practically the same. This witness (Samuels) was asked on cross-examination whether, if he found that there were, indications of scoria or blow holes' in the end of the pipe, he would pursue it further with the hammer, to which he answered “yes.” He was then asked, “ In order to see how far it went into the iron ? Answer: “Yes.” He .was further asked how far it must go into the iron, in his opinion, to make the pipe defective, to which he replied that he was not supposed to have an opinion upon that, and that he had his specification to go by. “ Q. I ask you your opinion % ” That was objected to. After colloquy between the court and counsel, the court said: “ If you attach much importance to it, I will allow it and overrule the objection.” The witness declined to answer, stating that it was none of his business. Thereupon the court was requested to instruct the witness to answer the question. The witness stated that he would not like to give an answer without the specifications, and he then undertook to present his reasons -for declining to answer. The court refused to instruct the witness as requested, for the reason that the. question called for an expert opinion, which the learned judge did not think he could force the witness to give, and authorized him not to answer the question unless inclined to, to which counsel for the plaintiff excepted. The opinion asked for was not that of a witness called.- merely as an expert. The question called for the opinion of the man who made the inspection, who used the hammer (which was to be ■ used by ■rapping), -and it was put with reference to the particular pipe which he inspected and upon w-hich. he used the hammer. The fullest cross-examination of this witness should have been allowed, and the . competency of the inspector to make the inspection, by the- use. of. the hammer was material to the plaintiff’s case, particularly as it insisted all- through-the trial, that it was the inspection itself that destroyed the-pipe or some of it.

-Again, the court excluded the testimony of expert witnesses by whom the plaintiff intended- to show that the inspection was unusual, improper and unfair and that, by the use of the hammer, pipe "which fully conformed to the specifications were disfigured and in. some cases destroyed by the inspectors. ' It is stated in the record that in order to prevent the waste of time that would be occupied in interrogating the witnesses who were in court, the admissibility ■ of the evidence was considered on an -offer of proof. The court declined to take the testimony of these witnesses,- sustaining an objection of counsel for the defendant Masterson that the plaintiff was bound 'by the inspection just as Masterson was. The plaintiff - insisted upon its right to call the witnesses for the purposes above o stated; and- the court said that it would not permit the plaintiff to' offer proof of anything except fraud, corruption or bad faith on the part of the inspectors. We are of opinion that the plaintiff had the right to show that the inspectors were acting ignorantly and wantonly in disregard of proper inspection, as required by the specifications. The offer of the plaintiff included proof not only, that the inspection was improper but that it disfigured and destroyed the pipe and that the rejected pipe in “a vast majority of cases com formed to the spécifieations.” It is claimed, however, by the defend- , ant Masterson that the inspection was absolutely conclusive and binding upon the plaintiff. That might lie so were it not for the element of bad faith in the conduct of the inspectors. The case of Montgomery v. Mayor (151 N. Y. 249) does not apply. That was a case in which it was held that contractors with the city for work and materials cannot maintain an action against it for damages caused by the rejection of materials by an official vested, by the contract, with the power of inspection and rejection, and whose power has been recognized by the contractors by procuring and completing the work with other materials.' In that case damages were claimed for increased cost of work occasioned by the defendant and its agents in delaying the work. The inspector rejected pipe and cement and the court said that possibly he was very arbitrary in doing so. The- plaintiffs there were not otherwise prevented from going on with the work than by the objections made by the inspector to the suitableness of the materials. In the present case the question is as to the acts of the inspectors not being arbitrary merely, but as .creating defects for which the pipe .was rejected and consequently of their bad faith in rejecting that pipe.. After one rejection it was not incumbent upon the plaintiff to deliver the articles on the line of the work for a second inspection.

The judgment should be reversed arid a new trial ordered, with • costs to appellant to abide the event.

Yah Bbtjnt, P. J., concurred.

Judgment affirmed, with costs.  