
    Guy M. Gest, Respondent, v. City and County Contract Company, Appellant.
    First Department,
    December 17, 1909.
    Principal and agent — when engineer employed by railroad not agent of contractor.
    A civil engineer employed by a railroad who is merely authorized to supervise, inspect and approve materials furnished and work done by a contractor has no authority to bind the contractor by authorizing a sub-contractor to furnish materials not called for by the sub-contract, even though the contractor in order to save the expense of a supervising engineer allowed the engineer of the railroad to supervise the performance of the work.
    The mere fact that the additional material which was called for by the main contract could be purchased at a lower price by ordering it with'the material " called for by the sub-contract did . not confer authority upon the engineer to bind the principal contractor.
    Houghton, J., dissented, with memorandum.
    
      Appeal by the defendant, the City and County Contract. Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 4th day of June, 1909, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 3d day of June, 1909, denying, the defendant’s motion for a new trial made upon the minutes.
    
      George S. Graham [Ralph Polk Buell with him on the brief], for the appellant.
    
      James D. Fessenden, for the respondent.
   Laughlin, J.:

The plaintiff recovered a verdict against the defendant for the sum of $4,954.55, being the purchase price of ninety manhole castings and ninety manhole iron pans which he claims to have been t duly authorized to purchase for the defendant, but which it refused to accept, together with a commission of fifteen per centum on the purchase price for his services and interest on both items.

On the 25th day of April, 1904, the New York, Westchester and Boston Railway Company entered into a contract in writing' with one Charles H. Smith for the purchase of a right of way where not theretofore acquired, and the construction of a railway on the main line of the feompany’s right oí. way between One Hundred and Seventy-seventh street, New York, and Portchester, in accordance with plans, profiles and specifications which were annexed- to the contract. Smith assigned the contract to the defendant. On or prior to the 2d day of July, 1906, the plaintiff, evidently being desirous of obtaining a contract for part of this work, interviewed one Putnam and one Tatnall, who were consulting engineers’ for the railway company, They pointed' out to him on a blue print the .work that they contemplated doing and indicated it by a yellow line thereon. The blue print showed that fifteen manholes would be required on that part of the work which was ready to be proceeded with at once, and that tw.ehty-six would be required on that part of the work inclosed by the yellow lines, on part of which, however-, the grading had not been completed and, therefore, that part was not ready for the electrical work. The plaintiff thereupon made a formal proposal in writing to the defendant under date of July 2, 1906, as follows :'“ We propose to lay the vitrified clay conduits complete with encasing concrete and build all manholes with appurtenances thereto, as per plan shown us for fifteen per cent above cost, said cost to include everything except the clay conduits proper which we are to receive from you at the dock. Work to be begun as soon as your contractors excavate the necessary trenches ready for the duct work. We would appreciate, your formal acknowledgment of this letter if the above statement is in accordance with your understanding of our verbal agreement. Thanking you for the contract, we remain with respect,” etc.

The defendant the next day accepted the proposal in writing, as follows: “We beg to acknowledge receipt of your favor of July 2nd, making a proposition to Jay the electrical ducts in the position pointed out by Messrs. Putnam and Tatnall today for fifteen per cent above the actual cost, including the material, with the exception of the ducts themselves. Your pro position-is satisfactory and accepted. You are authorized to go on with the work at once.”

The plaintiff purchased and laid the conduits and was paid both the purchase price thereof and the percentage for his services specified in the agreement. In the complaint lie- alleges that between the 3d day of July, 1906, and the 27tli day of April, 1907, he did “work of the kind mentioned” in his proposal of July 2, 1906, “ for and at the request of the defendant, and furnished in con- • nection therewith labor and materials. That in or about July, 1906, the defendant requested plaintiff to order and purchase from the American Brake-Shoe and Foundry Company, to be used in the prosecution of the work herein referred to, ninety manhole castings and ninety • manhole iron pans, at the price of Three thousand seven hundred and eighty-eight and 58/100 ($3,788.58) dollars and to pay for the same, which plaintiff did.” ‘ The plaintiff admitted, as a witness in his own behalf,'that he understood that the work in his original contract called for only fifteen manholes and that lie. received blue prints for the installation of only fifteen manholes. He also testified that he “ was never positively directed to build any number in excess of 15 manholes. Of course, as a contracting proposal, as a contractor, we were always making aim for the entire improvement which they told Us would be ultimately constructed.” The plaintiff knew that considerable similar work remained to be done, and it appears that ninety manholes would be required to complete the contract work embraced in the contract between the railway company and Smith, which had been assigned to the defendant. It is quite clear that the original contract between the plaintiff and defendant did not require that he furnish ninety manholes and ninety manhole iron pans, and 1 do not understand that the learned counsel for the respondent contends that it did. It is to be fairly inferred, from the allegation of the complaint herein quoted, that the theory of the plaintiff is that a new contract was made for these manholes in the month of July, 1906. Upon the trial, no evidence was presented tending to • show that any new contract was negotiated directly between the plaintiff and the defendant. The plaintiff relies upon an order given by one Flynn, who was an assistant to the consulting engineer Putnam, for the ninety manholes and ninety manhole iron pans, and it is claimed that Flynn had implied authority from the defendant to authorize the plaintiff to purchase the same. This is based upon testimony showing that Putnam on introducing Flynn to the plaintiff, informed the plaintiff that he should take his orders from Flynn, and upon the testimony of the plaintiff, which is controverted by that of Flynn, to the effect that Flynn directed him to order the manholes. The plaintiff, according to his own testimony, was informed by Putnam on or before the original 'contract was ma'de between the plaintiff and the defendant that Flynn was one of his office force, and he-further testified that after the contract was made Putnam informed him that we would receive orders from Mr. Flynn ; ” that Flynn was on the work and inspected the work which the plaintiff did in laying the conduit in concrete; that the only persons he came in contact with in doing the work were Putnam and Flynn, and that at the outset Putnam told him to take his orders from Flynn and that Flynn would have charge of his contract.

It appears by the testimony of an employee of the' plaintiff, who supervised .the work for him, that no one inspected the work for the defendant, but that Flynn was there every two or three weeks, and stated that he was an inspector for the railway company, and appointed a day inspector who remained constantly on the work, and that the day inspector 0. K.’d the plaintiff’s bills; and that after being O. K.’d by the witness representing ■ the plaintiff, they were sent to the plaintiff’s office and then presented to the defendant. Flynn, called as a witness for the plaintiff, testified that he also O. K.’d some of the bills, but that this was done to show the chief engineer that the work was done in accordance with the plans and specifications which he had given to the plaintiff, but that it had no reference to the price of the material. It appears that the bills were also O. K.’d by the chief engineer of the railway company. The plaintiff also testified that some time in July, 1906, Flynn brought to him a blue print drawing, showing the details for the manhole castings, and that at Flynn’s suggestion he sent it to the American Brake Shoe and Foundry Company to get a price on .the manholes; that he subsequently received a letter from the foundry company, under date of July 18, 1906, stating that if the order were placed for ' 125 manhole castings “ we can name you a price delivered f. o. b. cars Mt. Vernon, M. T,, of 24c. per lb.,” and that as it would be necessary to have the pattern made outside, they could not do better than deliver thirty within a month from the receipt of the order, and that it would be necessary to give an order for the number specified to enable the company to give the quotation specified for the reason that the pattern would cost between $120 and $140; that he communicated the contents of this letter to Flynn, who requested that he ascertain the lowest number of castings that the company would make without charging for the pattern, and that in reply to a further inquiry he received a letter, under date of July 24,1906, stating, in effect, that the foundry company would furnish ninety manholes at the price previously given without charging for the patterns, on the understanding that thirty only would be for immediate delivery, and that the remaining sixty would be made up from time to time and held subject to shipping orders; that he also communicated the contents of this letter to Flynn, who said that it was entirely satisfactory ” and told him to order the castings ; that prior to this time he talked with both Flynn and Putnam concerning the number of manholes that the company would probably want, and that each stated to him that it would want about one hundred and twenty-five; that after Flynn was informed by him that the manholes had been manufactured .and were ready for delivery, Flynn "stated that “ they didn’t want them at that time,” and told him to leave them where they were for the present; that he received a bill from the foundry Company, and paid for the castings by giving a note for ninety (lays for the purchase price and interest, which he' paid on the' 22d day of July, 1907; that on the 2d day of December, 1907, he wrote, the defendant asking for instruction's as to whether he should direct the foundry company to keep or ship the castings for the account, of the. defendant until ordered .shipped; that the defendant replied on . the next- day, referring to prior correspondence between the parties, and stating that the position of - the defendant- was fully set forth in a letter under date of November twenty-ninth—- which is hot in the record — and that the defendant had no directions to give regarding the castings, as it did not consider that it had any interest in them,, and that the payment made -on account of material and his services were by checks of the defendant. The plaintiff’s chief engineer testified that in the summer of 1906 the plaintiff was requested by the defendant to present a bill for some.or all of the work done, under the contract; that he took the bill to the railway company’s, office- and delivered it to Mr. Flynn, who corrected and approved it, and then went into another room, and in about five minutes brought • back a cheek of the defendant for the amount of the bill and delivered it to- the witness, and that he likewise received a check of the defendant for the final bill for tbe other contract work át the hands of Flynn.- In behalf of defendant it was shown that-there was no connection between its office and that of the railway company¡

The contract between Smith and the'railway company, of which the defendant took an. assignment, provided that the work should be done “ in the best possible manner agreeable to the directions (which directions shall always be given in writing) of the engineer of the company; ” ■ that the work should be done “ in .-a skillful and workmanlike manner in accordance with the specifications' hereto annexed or the written instructions of the engineer of the Railway Company, and all said material arid-construction shall be in accordance with the specifications hereto ■ annexed, and to such plansj levels and surveys as shall from time to time be given by the engineer of the Railway Company. It is- understood and agreed that the work shall be done under the direction and Constant supervision of .the engineer of the Railway Company, whose determination and decision upon all questions involving • measurements or calculations of the quantities of the several kinds of work performed under the several provisions-of this contract, or the quality or grade of such work, or of the materials used, shall be final (here follows provision for arbitration in case of dispute). * * * It is further understood and agreed that all material and workmanship shall be inspected by the engineer of the Railway Company, and accepted or rejected under a fair and reasonable interpretation of the terms of this contract and the specifications hereunto annexed, and any such materials or workmanship which shall be rejected shall be replaced and made good by the contractor, and the contractor shall replace such material or workmanship with proper material and work to the satisfaction of the engineer of the Railway Company. It is understood, however, that the contractor may call upon the engineer at any time to pass upon any material or workmanship and it shall be the duty of the engineer immediately to accept or reject such work and material.”

The president of the defendant testified, in effect, that he let the contracts for the defendant and that the engineers of the railway company had no authority with respect thereto, excepting to supervise the work under the contract, plans and specifications; that he required the O. K. of the railway company’s engineer before paying bills as a protection to the defendant under its contract with the railway company, and that his company had no engineer on the work.

Flynn testified that it was his duty to design the cover for the manholes, and that by direction of Putnam, and without communicating with the defendant, lie submitted it to the plaintiff to get bids on the castings; that he did not authorize the plaintiff to order ninety manhole castings and that he had no authority to give him any order in the premises, excepting to approve the price, which he did ; that his first information that the plaintiff had ordered more than fifteen manholes, the number embraced in his contract, was when he was notified that they were ready for inspection at the foundry, and, on going there to inspect them, he found forty-five; that he was there merely to see that they were properly manufactured and of proper material; that after inspecting the manholes, he wrote a letter to the plaintiff under date of September 27, 1906, stating that it would be necessary to have new covers made for the forty-five bodies already cast, malting them one-quarter of an inch. smaller in diameter and one-eighth of an inch thinner at the bearing surface, and that when the bodies were cast for the balance of the order, the patterns would be made .large enough to fit the covers already cast, and that when ■ fifteen new covers were ready for inspection, the foundry company was to notify him to send' an inspector for final approval. This evidence tends to corroborate the testimony of the plaintiff that Flynn, at least, knew that he was placing an order with the foundry company for more than the fifteen manholes required under his contract. The jury, were left to find on this evidence, and have found, that Flynn had implied authority to make the contract with the plaintiff for the ninety manholes. We are of opinion that there was no evidence to warrant the submission of that question to the jury. The plaintiff made his contract with the defendant, and there is no evidence tending to show that the defendant held out Flynn as having any-authority to represent it other than in approving tire contract work, and in that he was acting, not for the defendant, but for the railway company; but for its own protection and, probably, to save the expense of a supervising engineer, the defendant left it to the enginéera. of the railway company to direct and supervise the performance- of the. work. That, however, gave the engineers no authority to make any new contract for the defendant. The mere fact that the manholes could be obtained at a lower price by ordering all that were required on-the entire work at one-time did not confer authority upon the engineers to let the contract for the defendant. There is, as has already been seen, evidence indicating that the work which the plaintiff was shown, and which was inclosed by the yellow line on the blué print, would involve the placing of twenty:six manholes, and, therefore, it may be a question as to whether the purchasing of twenty-six manholes was embraced' within his contract; but this question can be more satisfactorily disposed of ón a new trial.

It follows that the judgment and order appealed from is reversed and á new trial granted, with costs-to appellant fro. abide the event.

Ingraham, MoLaughlin and SdOTTj JJ., concurred;.Houghton, J., dissented. T'_-

Houghton, J. (dissenting):

I dissent. I think Flynn had actual or implied authority to direct the plaintiff to purchase on behalf of the defendant the entire ninety manholes. Of course, the plaintiff is not entitled to his commission of fifteen per cent of the costs of manholes not used on his contract, but he is entitled to recover from the defendant the amount which he paid for the manholes which were not used.

Judgment and order reversed, new trial ordered, costs to appellant to abide event.  