Nicoll v. . Sands

Peckham, J. It seems to me to be too clear for argument that the contract between the town authorities and the waterworks company obliges the latter to furnish water, in addition to erecting works, which would be comparatively valueless unless they were put to the use which their erection would imply. The obligation is just as binding upon the company, if it can be fairly implied from the language actually used in the contract, as if it were in so many words specifically mentioned therein. Within chapter 369 of the Laws of 1889, the contract was valid. The persons who signed the application to the town authorities, pursuant to the provisions of the act in relation to the creation of water-works companies in towns and villages, passed June, 1873, and the acts amendatory thereof, stated in writing their intention to supply the town and the inhabitants thereof with pure and wholesome water. The town authorities, in granting their official written consent to the application, recite therein the fact that the applicants *23 have organized for the purpose of forming a water-works company to supply the town and the inhabitants thereof with pure and wholesome water, which they allege would be of great advantage to the town and a great benefit to the inhabitants thereof. The town authorities thereupon resolve “to grant the said application, and the same is hereby granted.” After the incorporation of the company, and its organization by the election of officers, the contract in question was entered into. In it the company agrees to erect the waterworks and lay in the principal streets of the town twenty-three miles of pipe of different named sizes, for the purpose of supplying the town and its inhabitants with pure and wholesome water in accordance with the grant of light of way to lay pipes, etc., by the authorities. The limitation contained in the contract is not to the use of the water by the town authorities for any but fire purposes, but it applies to the fire hydrants which were specially provided for to the number of 200, and they were only to be used for the extinguishment of fires, and also for reasonable exhibitions and practice by the fire department and companies of the town. The company agreed to erect two-pumps and to operate them, which should be of standard manufacture and appropriate size, and each having a capacity of pumping a million gallons in every twenty-four hours. It was also provided that the rates for private consumption should not exceed those of the Haverstraw Water Company, a copy of which schedule was annexed to the contract. This contract was executed in September, 1889, and under it the company proceeded with the work therein provided for, and before September 19,1890, had laid over twenty-three miles of pipe, and had erected their waterworks and placed two hundred fire hydrants as directed, and were furnishing to the town and the inhabitants thereof pure and wholesome water, and on the day last mentioned the town authorities stated these facts in writing and accepted and approved the performance of the contract by the company. Taking everything in the contract and the writings explanatory of its purpose, and its practical execution and construction *24 by the parties, and we have no hesitation in saying there was a binding contract to deliver pure and wholesome water to the town authorities and to the inhabitants up to a maximum amount (if required) of two million gallons every twenty-four hours. The practical construction put upon a contract by the parties to it, is sometimes almost conclusive as to its meaning. (Woolsey v. Funke, 121 N. Y. 87, at 92; Insurance Co. v. Dutcher, 95 U. S. 269, 273.) The company has under this contract and relying upon it erected its works, laid its pipes, erected the fire hydrants and actually supplied the water to the town and inhabitants. The proof of the acceptance was objected to as having occurred subsequent to the commencement of the action, but there is evidently no doubt as to the facts which have occurred relating to the manner in which the contract has been carried out and its extent. We think the contract was, so far as this question is concerned, entirely valid. The other objection is that the commissioners of highways who signed the contract upon the part of the town were, by its terms, to be paid by the company for their services in directing and supervising the laying of the pipes. I do not see that it is made their official duty by any statute to do this work. While there may be no unbending rule of law which positively prohibits under any contingencies such a provision, yet it is of so questionable a nature as to call for the most scrutinizing review of the result by the courts. Very slight evidence of an improper or unfair execution of duty by the commissioners, or of a failure to fully perform the contract by the company after the manner of the strictest construction of its requirements, would probably cause a court to find a fraudulent motive for the insertion of such a provision. The onus would be upon the company to show that the contract was just and fair, and had been by them justly and fairly carried out. It might generally be difficult to prove such a condition of things, but in this case it is shown that there was no talk or *25 conversation as to the compensation to the commissioners until the terms of the contract had been fully agreed upon and written out, and the terms themselves were fair and just to both sides. Each commissioner swore he was in no way moved to the acceptance of the terms of the agreement by any question of compensation, and that subject did not arise until the whole matter as to the terms and conditions of the contract had been already fully agreed upon and settled. The agreement for the supervising the laying of the pipes and for the compensation of the commissioners was probably made by the company, as the evidence would seem to indicate, upon the theory that if the manner of laying the pipes were approved, as the work progressed, by the town authorities, there would be no question afterwards as to whether the contract had been fairly carried out on the part of the company. Supervision being no part of the duty of the commissioners, the company was willing to pay them a fair compensation for their work. There is no proof that the supervision was not faithfully executed, and none that the contract was not in good faith carried out by the company both in letter and spirit. Under these circumstances, while entirely disapproving the practice resorted to in this case, we do not feel that justice requires us to set aside this executory contract. The question of whether the compensation of a commissioner of highways in the town of Islip was $2 or $3 per day while engaged in the performance of his official duties, we think is immaterial. The company agreed orally to pay them $3 per day while engaged in supervising the manner in which the water-pipes were laid. As this was not an official duty, the question of the amount of difference between such agreed sum and the official compensation is irrelevant. The statute of 1886 (Chap. 452) does not make such supervision a part of the duty of the commissioners, and I am not aware of any statute that does. The last-named act makes provision as to the laying of the pipes so that public travel shall not be interrupted, etc., but there is no duty of supervision imposed upon the commissioners of highways during the progress of the work. As *26 there has been neither fraud nor illegality connected with this contract, we must uphold it. The judgment dismissing the complaint should be affirmed, with costs. All concur. Judgment affirmed.