People ex rel. Phoenix Construction Co. v. Hoyle

The relator was the lowest bidder and was regularly awarded the contract for the furnishing of the work and materials necessary for the construction and laying of 794 lineal feet of forty-eight-inch cast iron pipe, for the purpose of completing the outlet into the Hudson river of the Bronx Valley sewer. The relator’s bid for the work -and matérials, accepted by the defendants, was $63,892; and, after the bids were opened and the contract was awarded to the" relator, notice was given to the relator by the defendants to appear at the office of the defendants, on the 22d day of January, 1912, at ten o’clock in the forenoon, for the purpose of executing the contract and filing the required bond. The relator did appear at that time and place, prepared to execute a contract and" file a sufficient bond in the form required by the defendants, whereupon the defendants refused to enter into a contract with the relator, on the ground that they had no funds sufficient to pay for the proposed work, and that none was available for that purpose. Ho other reason was given by the defendants for refusing to enter into a proper contract with the .relator. There was no question as. to the reliability of the relator, and the defendants’ sole reason for not making a contract in accordance with the relator’s bid and their acceptance thereof was the alleged lack of available funds; and, thereupon, this motion was made for a peremptory writ of mandamus, directing the defendants, constituting the Bronx Valley sewer commission, to execute and deliver to the relator a suitable contract.

Ho question is now raised by the defendants as to the form of the remedy sought on this motion, and the matter is submitted by both sides for a determination by the court as to whether the defendants have a legal right to make-such a contract. Hnder the Bronx Valley Sewer Law, including the several amendments, the former and the present commissions. were and are authorized to expend the *517sum of $2,930,514 for the construction and maintenance of a sanitary trunk sewer, outlet sewer and plant for settling and reducing or screening the sewage; and it appears that the amount expended and incurred for all purposes by both commissions down to the present time is the sum of $3,104,008.67, leaving a deficit, or an amount expended and incurred in excess of the total expenditure authorized by the Legislature, of $173,494.67; and it was for this reason that the defendants refused to make a contract with the relator. It appears, however, that the said aggregate of moneys expended and debts incurred, to wit: the sum of $3,104,008.67, includes the following1 items:

Certificates of indebtedness to pay interest on the -bonds ,........ $264,398 55 Interest on bonds to December 31, 1911 ...................... 47,500 00 ' Interest on certificates (issued to pay interest on the bonds)......... 15,580' 59" Total................... $327,479 14

It seems to me that these items should not be reckoned in the cost of construction and maintenance of the sewer, or be charged against the amounts authorized by the statute to be expended for construction and maintenance. These certificates of indebtedness were issued to pay interest on bonds that had been issued and sold by the commission under the act to raise money for construction purposes, and should be distinguished from the certificates of indebtedness that might be issued to pay for construction work, which are authorized by that statute and which are to be paid out of the proceeds of the sale of bonds. There is nothing in the record to show that any such certificates have been issued or are now outstanding. The overdue interest on bonds and certificates that were issued to pay interest on bonds should not be charged against the authorized limitation of expenditure for construction.

The authority granted by the statute refers to the aggre-' *518gate par value of the bonds to be issued. The limit has no reference to amounts of interest which- should thereafter grow due. on such bonds. In this case -the statute provides how the money to pay the interest on such bonds shall be raised; both the principal and interest of all bonds shall be .paid, under the statute, by assessments and levies to be made by the board of supervisors, and such payments are not'to be regarded as a part of the construction and maintenance account; and there is no reason to suppose that the Legislature' intended that interest on the bonds that was not paid when due, or certificate given to pay arrearages of such interest, should be charged against the money raised for construction purposes by the sale of bonds authorized by the statute. The following cases -seem to hold this way: I can find no authority in this State. Carlson v. City of Helena, 39 Mont. 82; Herman v. City of Oconto, 110 Wis. 660; Finlayson v. Yaughn, 54 Minn. 331.

This seems to be the reasonable view to take of the question; and, if my conclusion is correct, then the sum of $327,479.14 less the Sum of- $173,494.67 is available for construction work, and just as much available for the completion of the sewer outlet as for land damages or any other expenditure under the statute. In other words, the statute gives no preference in the matter of payments from the moneys raised for construction purposes. The building of the outlet is as much a part of the construction work as any other work or item; and. any moneys within the statutory limitation, not actually appropriated by the commissioners for some other lawful purpose, are available for the payments under the proposed contract. The relator is, therefore, entitled to a peremptory- writ of mandamus directing the defendants to execute the contract in question.

Motion granted.