Bradley v. McDonald (218 N.Y. 351, 1916)

Hogan, J.

This action was commenced in August, 1906, against John B. McDonald and Rapid Transit Subway Construction Company, hereinafter designated as “ Construction Company,” to recover a balance alleged to be due plaintiff for work performed and materials furnished for the construction of subsection six of the New York subway, also for extra work performed and materials supplied and for additional work performed and materials supplied in connection with said work.

March 17th, 1911, during the progress of the trial and before the defendant’s case was opened, John B. McDonald died. April 8th, 1911, Georgie Annie McDonald, executrix of the last will and testament of John B. McDonald, was substituted as a party defendant without prejudice to the proceedings theretofore had in the action.

On or about February 21st, 1909, the city of New York by the board of rapid transit railroad commissioners, herein referred to as the board of commissioners, entered into a contract with John B. McDonald, wherein Mr. McDonald undertook to fully construct and equip the rapid transit railroad commonly known as the ‘1 Subway ” from the city hall in the borough of Manhattan to the terminals in the borough of The Bronx, and to operate the same as therein provided. Simultaneously with the execution of the contract Mr. McDonald was required to give security for the performance of the contract on his part, both under the agreement for construction and equipment and also as a continuing security.

The Rapid Transit Subway Construction Company was organized February 16th, 1900, to construct or aid in the construction of rapid transit railroads in the city of New York. About the date of the execution of the contract between the city and Mr. McDonald a written contract was made between Mr. McDonald and the .Construction Company, wherein the Construction Company agreed to advance to Mr. McDonald the amount of cash security required to be deposited by him with the city comptroller, and to execute as surety or to procure satisfactory sureties to execute the bonds required to he furnished by Mr. McDonald. As security for the. re-payment of the sum of money to be advanced, and for the protection of the Construction Company from any liability upon the bonds, the contract provided (1) that the Construction Company should receive all moneys payable to the contractor (Mr. McDonald) under his contract, and should disburse the same; (2) that McDonald should not make sub-contracts for any portion of the work or for the purchase of any material required in carrying out the work until after the same had been first approved by the Construction Company; (3) for the purpose of more effectually carrying out the provisions of the contract, Mr. McDonald assigned to the Construction Company all payments which should become due to him from time to time under the contract made by him with the city, the amounts to be paid to the Construction Company as the same fell due; (4) the Construction Company agreed to pay out of the said moneys so received, so far as the same would be sufficient for that purpose, all amounts due and payable to subcontractors and others by the contractor (Mr. McDonald) for work done or materials furnished in carrying out the work required by the- contract with the city of New York when and as the same became due.

July 31st, 1900, Mr. McDonald entered into a contract with the plaintiff, by .the terms of which plaintiff for a valuable consideration undertook and agreed to construct the rapid transit railroad between the center of Sixtieth street and the center of One Hundred and Fourth street, known as subdivisions A and B of subsection six. Plaintiff, on the same day, entered upon the performance of the contract having first given the necessary bond required of him.

The contract amongst other things referred to the assignment of the original contract to the Construction Company and to the provisions thereof, whereby the lat-t,er company had agreed to pay out of moneys received by it all amounts which might become due and payable from the contractor to sub-contractors and a waiver on the part of the sub-contractor (plaintiff herein) of the right at any time to file a lien against any 'moneys which might at any time be or become due from the city under the principal contract, and to have recourse to such moneys in the hands of the Construction Company for payment of sums to become due and payable under his contract, a copy of which was to be deposited with the Construction Company.

The fact was conceded in the pleadings and found by the referee that long prior to the commencement of the action the Construction Company had received from the city, under its agreement with Mr. McDonald, a large sum of money payable to Mr. McDonald under his contract and retained of the moneys so received more than sufficient to meet and discharge any claim established against it or its co-defendant, Mr. McDonald, on account of work performed and materials furnished by plaintiff.

The provision of the contract to which attention has been called read in connection with the agreement between Mr. McDonald and the Construction Company entitled the plaintiff to the benefit of the provision of the latter agreement as fully as though he had been specifically named therein, and he is entitled to recover from the Construction Company any amount due to him. (Lawrence v. Fox, 20 N. Y. 268; Coster v. Mayor, etc., of Albany, 43 N. Y. 399; Pond v. New Rochelle W. Co., 183 N. Y. 330; Rochester Telephone Co. v. Ross, 195 N. Y. 439.)

The contract between Mr. McDonald and the city provided for the construction and equipment of the railroad for a lump sum. The work was to be performed pursuant to specifications and contract drawings furnished by the board of commissioners which were intended to be full and complete, but in view of the magnitude of the work and the impossibility either to show in advance all details or to forecast all exigencies the specifications and. drawings were to he taken as indicating the amount of work, its nature and method of construction so far as the same was distinctly apprehended. The contractor, however, became obligated to construct and equip the railroad as contemplated in the contract and specifications. The board of- commissioners reserved the right to amplify the plans, to add explanatory specifications, to furnish additional specifications and drawings within the limits of the general purview of the work, to require additional work to he done or additional materials to be furnished, or both within the general scope of a rapid transit railroad, or to require work or materials specified or provided for to be omitted. If such additional work or materials were required, then the reasonable value thereof was to be additionally paid to the contractor; if work or materials were omitted a, reasonable deduction should be made therefor.

The contract between Mr. McDonald and the plaintiff was a unit price contract, i. e., plaintiff was to be paid certain specified sums for certain units, thirteen in number, and in addition for “construction and'reconstruction of sewers along and off the route of the railway, stone, pipe or tile drains, all water, gas and other pipes, electric cable conduits, vaults, subways and other surface and sub-surface structures as shown oh plans, including excavation, back filling and restoring street surface, except trenches for sewers along the route of the railway and adjoining the said railway, which will be paid for at the prices herein provided for excavation and restoring street surface, one hundred sixty thousand dollars.

“The cost of maintaining all railways, sewers, gas, water and other pipes, conduits, vaults, subways and other surface and sub-surface structures, and all sheathing, timbering, pumping and nailing is included in above prices. * * * In case the sub-contractor shall be required to maintain the elevated railroad at the intersection of Broadway and Ninth Avenue, or to reconstruct or build foundations for the same, payment shall be made for the actual cost of labor and material furnished by him, and ten per cent of the cost of labor in addition thereto for the said work.”

That difficulties were likely to be encountered in" the progress of the work was recognized in the contract between Mr. McDonald and the city, as well as in the contract between plaintiff and Mr. McDonald. The latter contract contained the provisions above referred to relating to amplification of plans, additional plans and specifications, additional work and payment therefor.

A further provision was “ Payment for Additional Work.” “The sub-contractor shall become entitled to payment for additional material furnished or work done only upon the determination of the Chief Engineer of the Board of Bapid Transit Bailroad Commissioners, as shown by special plans and specifications to be issued and countersigned by him, which special plans and specifications when so issued shall be binding upon both parties hereto upon the certificate of the Chief Engineer of the Construction Company showing the amount of such additional work or material done or furnished by the sub-contractor. ”

Payment was to be made to plaintiff as the work progressed upon written vouchers certified to by the chief engineer of the Construction Company, whose duty it was on or about the first day of each month to prepare an estimate of the work done and materials supplied to the end of the preceding month, ninety per cent of the amount appearing due by said estimate to be paid on or about the 15th day of each month and the remaining ten per cent was to be paid ninety days after the completion of the work and its acceptance by the chief engineer of the board of commissioners. Such monthly estimates were to be merely tentative and upon the completion of the work the chief engineer was to prepare an official statement showing the entire work done, amount of material furnished, amount payable to .the sub contractor, etc., which certificate was to be final and conclusive upon the parties to the contract, and any balance due to plaintiff to be paid as above stated.

• The referee, before whom the case was tried, found that the rapid transit railroad, including subsection six, was completed, put in operation and accepted by the city of New York and the board of rapid transit commissioners and its chief engineer on or prior to October 23d, 1904; that plaintiff had completed the construction of said subsection six in a good and workmanlike manner as required by the terms of his contract of July 31st, -1900; that between July 31st, 1900, and October 24th, 1904, the plaintiff performed regular work and furnished material under the original contract of the value of $3,077,479.62, upon which the defendant Construction Company had paid plaintiff the sum of $3,002,340.59 and no more, from moneys earned by Mr. McDonald under the principal contract and which were received by the Subway Construction Company, leaving a balance of $75,139.03, and that after deducting all payments made for extra work before the conamencement of this action there was due to plaintiff on account of specified extra work, $8,593.61, making a total of $83,732.64. The performance of regular and extra work and furnishing of materials by plaintiff under the original contract, the value of the same, and payments made on account thereof in the amounts above stated as found by the referee was alleged in the complaint and admitted in the answers of defendants.

The referee also found that plaintiff was entitled to recover of defendants for additional work performed and materials furnished, the principal items of which are embraced in what is designated as “Force Account Basis.” Other items allowed for arose as found by the referee under special agreements made between the parties. Some additional items were conceded upon the trial, and other findings relate to work and material of which account was kept other than upon the “ white slip” method adopted in the “Force Account Basis.” Including the sum of $83,732.64 allowed by the referee above stated the total credit allowed plaintiff was $658,834.97. As against that amount the referee allowed defendants credit for $232,751.36, and determined that plaintiff with allowance of interest, after making deduction of $100,000 paid July 3d, 1906, as of that date was entitled to recover of defendants $480,541.27. Upon the report of the referee judgment was entered in favor of plaintiff for $502,966.08.

It is asserted by counsel for appellants that reversible error was committed by the referee upon the trial of the action and in the findings made by him and his conclusions based thereon. Briefly summarized, his argument is that under the contract between plaintiff and. Mr. McDonald plaintiff was required to perform the principal part of the work for which allowances were made by the referee for the lump sum of one hundred sixty thousand dollars; that evidence offered by plaintiff tending-to show the amount of work performed, quantity of materials furnished and value of the same was erroneously admitted; that the- referee erred in refusing to allow an offset against plaintiff in favor of defendants; that error was committed in the allowance of interest and in the admission of certain evidence. Counsel for appellants further contends that error arises by reason of inconsistency between certain findings of fact made by the referee and findings proposed by the defendants, marked “Found” by the referee.

The complaint consists of fifty causes of action. The first and second causes of action seek recovery for the balance claimed to be due for regular work and certain extra work under the original contract, which amount, as I have stated, was admitted by defendants. Two several causes of action are summaries of preceding causes of action. Seventeen causes of action are based on the theory of account stated. The remaining causes of action relate to extra and additional work performed and material furnished.

The separate counts of the complaint relating to the “Force Account Basis” contain the following allegation:

“That at the special instance and upon the direction, requirement and authority of the defendants and the Board of Rapid Transit Oommissionors and their engineers and by their authority, and upon plans furnished and provided by said engineers and said defendants or under their direction, all as provided and authorized in said contract, the plaintiff performed extra work, labor and services for the defendants, in and about or in connection with and in addition to, the performance of the contract entered into by him and said defendant John;B. McDonald, Exhibit A, which is hereto annexed, in * * * [here followed a description of the work performed], and in doing so performed a large amount of labor and supplied a large amount of material [the nature of which is stated and the value of the same], which labor and material were rendered and performed more than ninety days prior to January 1st, 1905, and plaintiff became entitled to payment therefor prior to said date, with interest; but defendants have neglected and refused to pay plaintiff therefor.”

The separate answers of defendants are alike in substance and each numbered count of the complaint is answered by reference to the number of the cause of action. The answer of each defendant to each of the several counts of the complaint, above quoted, after certain denials contained therein is as follows: “Except that he admits that upon the direction and requirement of the defendants and the Board of Rapid Transit Railroad Commissioners and their engineers, and by their authority and upon plans furnished and provided by said engineers and defendants, as provided and authorized in said contract, the plaintiff performed work and furnished materials additional to the work and materials set forth in the plans of the Rapid Transit Railroad referred to in the said contract * * * [stating the character of the work].”

At the outset appellants are confronted with the admissions in their answers contained and the effect of a unanimous affirmance by the Appellate Division of the judgment entered upon the report of the referee, which decision requires us to treat the findings of fact as sustained by evidence.

The referee found that in addition to the work specified in the contract between the defendant McDonald and plaintiff and for which prices were fixed in said contract, plaintiff was required to and did a large amount of extra and additional work and furnished a large amount of material and labor in doing the same, at the request of the defendant McDonald and under his direction and at the instance and upon the request of the defendant Rapid Transit Construction Company and under its direction as more fully thereinafter found by him. Additional findings are to the effect that after the plaintiff began the construction of subsection six, work extra and additional to the work specified and called for by the contract between said McDonald and the plaintiff was required, a large part of the same being work that did not appear in or upon the plans and specifications upon which the plaintiff’s contract was made, other portions of the same being work which, although appearing upon the plans, was required to be done in a different manner and of a different kind, because of changes made in the plans by and under the direction of the defendant McDonald and by and under the direction of the Construction Company. That when said work was first required and as it developed from time to time, the question as to whether it was extra or additional work or work properly called for by the contract between plaintiff and defendant McDonald was taken up and discussed between plaintiff and the defendant and the question determined, but early in the fall of 1901 it became apparent to the plaintiff and defendants that a large amount of such work would he-encountered and would have to he done as the work of constructing said subsection six progressed.

Referring to the findings relating to the “Force Account Basis,” it is important that the-substance of the same though voluminous should be set forth.

In effect they are as follows: In the latter part of September or the forepart of October, 1901, an agreement was entered into between Mr. McDonald and the plaintiff that all extra or additional work should thereafter be done by plaintiff upon what is called a “ Force Account Basis,” that is, the actual cost of the labor plus fifteen per cent for superintendence or profit and actual cost of materials necessary to be used plus ten per cent for superintendence or profit. The resident engineer of the Construction Company, one Moore, who was required to and did take instructions from Mr. McDonald, devised a method of keeping track of the cost of ail extra work and the amount for which plaintiff would be entitled to be paid, and required plaintiff to adopt and follow it, namely: Mr. Moore made up a form and directed plaintiff to have it printed upon white slips of paper. The* form was headed “ William Bradley, Sub-Contractor, Sections 6A and 6B, Daily Report of Extra Work. Location--Name of work-Date--. All time given in eight hour days.” Then followed on the form columns for each class of laborers, mechanics, etc., employed, and space for the time of each, for foremen, teams, etc., and for materials used. The plaintiff was directed by Mr. Moore to furnish the slips to his foremen who had charge of the doing of any extra or additional work with instructions to place upon the same the number of men employed and the time for which they were employed, of various classes as well as the quantity and kind of materials used by him and his gang each day, the 'number and time of teams used, loads of dirt carried away, etc., indicated upon the slip. Plaintiff was further required to have each foreman doing extra work and using such slips sign the same each evening, and to have the superintendent ascertain the correctness of the slip after it was so signed, and if found to be correct to place the letters 0 K upon it over his name, if incorrect to have the same corrected before signing his name and 0 K thereon, then to have said slips delivered at the plaintiff’s office where his books were kept, to have such slips correctly entered upon said books so as to show the kind and quantity of materials used, and the number, class and time of men employed, loads of dirt carried away, etc., then in addition to have sent to said Moore daily for the defendants a copy of the entry or entries upon the plaintiff’s books thus made, and at the end of each month to have a summary or total of such daily entries upon plaintiff’s books made upon said books, and a copy of said summary or total sent to the defendant Construction Company.

The plaintiff daily furnished to the foremen in charge of extra or additional work said white slips and required them to place thereon the time, work and material directed by Mr. Moore. The foremen complied with the directions given them. Each evening the white slips so made out by the foremen were- examined by the superintendent and when found correct, or after any error therein found had been corrected, were 0 K’d and approved by the superintendent. The plaintiff correctly entered upon his books the contents of the white slips, as thus verified, and 0 K’d daily, except that occasionally where a slip would be held for verification there would be a little delay in entry of the same. A correct copy of such entries and the details of the same was daily sent to Mr. Moore, except when a delay occurred as to some slips as found, and correct copies of the entries from such slips were sent as soon as verified and made. At the end of each month plaintiff made a correct summary upon Ms books of the daily entries made showing the cost of labor and material and the work done for the month and sent a correct copy of the same to the defendants. The form of said monthly statements is as follows: “Date ■-- Rapid Transit Subway Construction Company to. William Bradley, General Contractor, Dr.,” and then followed the location of the work, the number of hours of labor of each class of employees, their grades, daily wages, total wages for the month, to which was added fifteen per .cent, and a list of and quantity of materials used and the cost of the same, to which was added ten per cent.

Mr. Moore was charged by the defendants with the duty of keeping track of such extra or additional work, of verifying the correctness of the daily and monthly summaries rendered by plaintiff and plaintiff’s claims for extra or additional work and he did compare the monthly reports with the daily reports and verified the same and then compared them with reports made to him by men employed by the Construction Company to check up the cost of the work and thus in connection with his personal knowledge of work done, etc., verified the reports and when found to be correct placed his signature .under the letters O K upon the monthly summaries rendered by plaintiff to jndicate their correctness. About August 1, 1903, he ceased by direction of defendants placing his signature upon the monthly summaries, although by direction of defendants he continued to verify the same as he theretofore had done. This method was adopted and carried out in regard to all claims made by plaintiff for work done as extra work and material furnished except in certain cases where agreement was made between the parties that plaintiff should be paid for same on a different basis than “ Force Account Basis. ” The plaintiff complied with the directions of Moore in keeping his accounts and relied upon the method devised by him and acted on as satisfactory to defendants. He employed with the knowledge and approval of Moore and defendants, timekeepers who made accurate daily reports which were daily compared with the reports of the foremen, verified by the superintendents, of the same facts. Such reports were kept on file in the office maintained by plaintiff, and were open to inspection and examination by defendants, their checkers, Mr. Moore and his assistants, and were inspected and examined by them and in the event of any discrepancy the same was settled at the time to the satisfaction of defendants’ checkers, Mr. Moore and his assistants, and correctly entered in plaintiff’s books and correct monthly summaries thereof made and sent by plaintiff to defendants, received and examined by them and if, as occasionally happened, any error was found or claimed by them, it was called to the attention of plaintiff and thereupon adjusted and settled at the time and new and corrected summaries sent by plaintiff to defendants and thereafter no further objections were made by defendants.

In connection with the finding above referred to, the referee in finding number twenty-six stated that the method of keeping account of the cost and value of extra and additional work described in finding number twenty-five, as devised by Mr. Moore, was continued as the work progressed until it was completed with the knowledge and consent of the defendants, and upon their agreement and the agreement of each that the work should be done on the basis found and account and track of it kept in the manner stated, and by the twenty-seventh finding the referee found that plaintiff’s books, upon which were entered both the reports made by the foremen and 0 K’d by the superintendent, and the monthly summaries were kept in the office maintained by him at Eighty-sixth street and Broadway during the existence and continuance of the work.

With reference to the books and accounts, the twenty-eighth finding of fact made by the referee is important in a consideration of the questions presented in this case, and, therefore, is quoted in full:

‘1 Twenty-eighth. That these books were open to inspection by both of the defendants and their agents; that the original white slips made up by the foreman and 0 K’d by the superintendent were kept in the same office during the same time, and were open to inspection «and examination by the defendants and their agents. That men employed by the defendants as checkers of the time, the number of men employed, the time spent by them, the quantity and character of material used, teams used, etc., were kept by the defendants on the job and required to and did examine from time to time and compare the said white slips as well as the entries upon the plaintiff’s books with their check in order to ascertain the correctness of the plaintiff’s claims and bills for extra work. That said Ernest 0. Moore also inspected the plaintiff’s books and the white slips kept in the office from which entries in the books were made from time to time and compared them with the reports made to him by men employed in his office and paid by the defendants, whose duty it was to keep a check upon the cost of all extra work, knowing and reporting to him the number of men employed, the time spent, and the quantity of material used. That said Moore was upon the work daily, and also had an engineer whose duty it was to be familiar with the work and who was familiar with the work for which plaintiff was claiming extra pay, knowledge of its extent and character and of its reasonable and fair cost, as well as knowledge by personal observation of the force of men and teams employed from time to time by the plaintiff in doing the work, and the character and quantity of material required and used in it, and the fair and reasonable value of such material. That at the times he placed his name and 0 K upon or approved the monthly statements of bills sent by the plaintiff to the defendant Subway Oonstruction Company, and by it returned or sent to said Moore for verification, he had knowledge of and was familiar with the work Specified in the same. That whenever the checkers employed by the defendants or said Moore, or said Moore himself, discovered any discrepancy or difference between the entries upon plaintiff’s hooks and the accounts appearing upon his hills or white slips, and the knowledge which they possessed or acquired and the reports made and kept by themselves, these checkers or said Moore, as the case might be, would and did go to the office of the plaintiff to call his attention to such discrepancy or difference, and the same was then and there looked up, and it was ascertained which was correct. In some cases it was found the check or reports claimed by the defendants was incorrect, and in such case no change was made upon the entries in plaintiff’s books, or upon the bills made therefrom and sent by the plaintiff to the defendants. In other cases, and they were the larger in number and amount, it was found, or, at least, said defendants or their agents or said Moore" claimed, that there were errors in the entries in plaintiff’s books, and that they must be changed and corrected to make them agree with what defendants’ checkers reported, and what said Moore personally knew. And such changes were made by the plaintiff upon his books and new and corrected bills sent them with such changes upon them in order to com-comply with such corrections. Under instructions from the plaintiff, his book-keeper even made such changes in many cases where defendants’ checkers could not show the plaintiff’s entries were erroneous, hut in order to make plaintiff’s bills and books agree with the defendants’ reports and claims as to the amount of work done and the cost thereof at the time and as the work progressed. After such corrections it appears that in no instance was a bill or claim 0 K’d by said Moore as hereinbefore found or returned by him as correct, found to be incorrect, by any investigation thereof thereafter made by the defendants.”

By findings numbers fifty-two, fifty-three, fifty-four, fifty-five, fifty-six and fifty-seven the referee found in substance that when bills for extra work for which the action was brought were presented by plaintiff from month to month, the work for which they were presented was open for observation and inspection, and its extent and character readily ascertainable, as well as the number of men and teams employed, and the character and quantity of materials used; that where work was done for plaintiff by third parties, the work thus done was personally examined and inspected by Mr. Moore and verified as to its character, cost and workmanship, and where materials were furnished an itemized bill of the same to the plaintiff was sent to the defendant and included in his monthly summary, and all were for the fair and reasonable and actual cost of labor and material; that no objection was raised. by the defendants or either of them as to the correctness of any claim until long after the work was completed and accepted, and then only in a few instances as regards' certain bills to which other findings are made applicable; that no objection was made as to, the bills or that the plaintiff did not employ as many men as he charged for or for the time specified, or that, he did not furnish or use the materials specified in the bills, or do the work mentioned therein and at the cost and price therein stated and claimed for.

In the numerous findings made by the referee relating to items of the “Force Account Basis ” practically the same language is used, in substance, as follows:

“ That the plaintiff at the special instance and upon the request and direction and requirement of the defendants and Board of Rapid Transit Railroad Commissioners, and their engineers and by their authority and upon plans furnished and provided by said engineers and defendants, or under their direction, performed work and furnished materials extra and additional to the work and material set forth in the plans .of the Rapid Transit Railroad ' referred to in the contract and in addition to the performance of said contract between plaintiff and defendant McDonald * *

Such statement was followed by a recital of the character of the work performed and material furnished, the cost of labor and the cost of the material separately stated and the fair and reasonable value of each, the actual cost to the plaintiff of the same including fifteen per cent upon the cost of labor and ten per cent on the cost of material used and required and the amount carried out in dollars and cents; that the labor employed was paid for at the prevailing rate of wages and was charged for by the plaintiff at not more than the said rate plus the fifteen per cent added for superintendence and bills for the same sent in monthly by the plaintiff to the defendant Construction Company at its request and at the request of the defendant McDonald; that the material supplied was purchased and charged for at its market value at the time plus ten per cent and bills for the same sent in monthly to the defendant Construction Company at its request and the request of the defendant McDonald; that account and track of the labor employed and materials furnished were correctly kept by the plaintiff, daily reports and monthly summaries of bills thereof sent to the defendants, the bills examined and verified by Ernest 0. Moore, engineer of the defendants and others “ in the same manner as found in findings twenty-five, twenty-six, twenty-seven and twenty-eight, and the facts therein found are made a part of ” each finding relating to the “ Force Account Basis.” The referee also found that all of the work thus performed was done and completed on or before October 24th, 1904, and the material mentioned was furnished on or prior to said date. The conclusions of law separately found in favor of plaintiff upon each finding of fact.

Counsel for appellants contends that error of law was committed by the referee in construing the provisions of plaintiff’s contract and in applying the same to the facts found in regard to work done on surface or sub-surface structures; that plaintiff undertook to perform the work of maintaining, reconstructing and readjusting the surface and sub-surface structures necessitated by the construction of the subway railway as originally planned for the lump sum of one hundred sixty thousand dollars, irrespective of what was shown on “ Supplementary D Drawings,” and he directs our attention to causes of action numbers four, five, six, seven, nine and fourteen.

The first item considered by counsel for appellants arose under cause of action number six of the complaint, and is treated by him as being “ typical of all the others ” and as illustrating the points he submits relating to the several causes of action, though they are separately considered by him. While consideration has been given to the several causes of action cited, a review of the typical case selected by counsel will be beneficial. Before taking up the selected case it is essential that a clear understanding be had of the designated “ Supplementary D Drawings.” The contract of February 21st, 1900, between the city and Mr. McDonald referred to plans mentioned in the specifications one hundred seventeen in number, bearing date April 7th, 1898, each countersigned by the engineer of the hoard of commissioners. Such plans, together with the specifications accompanying the same, were plans for the contemplated construction of the subway, and were known as Contract Drawings.”

The “ Supplementary D Drawings ” were not embraced in that class of plans, but consisted of one hundred forty-two maps or plans bearing the same date as the contract plans, to wit, April 7th, 1898. Of that number of drawings Nos. D4S to D69 inclusive covered sub-section six embraced in the contract between Mr. McDonald and the plaintiff. The contract in substance provided that the “ Supplementary D Drawings,” D48 to D69 inclusive, exhibited certain information which the board of rapid transit commissioners had received from its engineer of the nature of the soil underlying portions of the route, the nature and position of elevated and surface railways, water mains, gas and other pipes, sewers, electric subways, manholes, hydrants, catch basins and other surface and sub-surface structures; that the drawings had been exhibited to plaintiff without any guaranty on the part of the contractor (McDonald) as to their completeness and correctness; that plaintiff was permitted, at his option, to have copies thereof for such aid, if any, as he might derive from the same. The contract also provided that if upon opening the streets or otherwise, difficulties of any nature be encountered which are not indicated or suggested by the “Supplementary D Drawings” or any additional surface or sub-surface structures be discovered or found of different size or in different positions or of different nature from those shown on the ‘1 Supplementary D Drawings ” or if any of such drawings are found erroneous, the plaintiff shall have no claim whatever against the contractor for damages or compensation for any such failure, discrepancy or error, but is to take every necessary and proper precaution to overcome the unforeseen difficulty, and is to take care of, protect, remove, adjust or readjust, as the case may be, the additional or different surface or sub-surface structures according to the direction of the chief engineer of the Rapid Transit Subway Construction Company.

The “ Supplementary D Drawings ” were not a part of the contract plans for the construction of the subway railroad. They were merely advisory and purported to contain only such information as the board of commissioners possessed relating to sub-surface structures. The report of the referee does not make reference to them, save as found that contracts were made between Mr. McDonald and the city and Mr. McDonald and plaintiff, which contracts embraced the clauses relating to the drawings. A large number of requests to find matters of fact, made by defendants, involved the drawings mentioned, many of which were marked “Found” by the referee, Examination of the same in. connection with the findings made in the report of the referee fails to disclose any inconsistency between the findings as made and the findings marked “Found.”

The case selected by counsel arises under cause of action number six of the complaint, wherein plaintiff sought to recover for additional work claimed to have been performed and materials furnished in the reconstruction of the vaults of the street surface railway interfered with by reason of the subway construction.

At the request of defendants .the referee found that the “ Supplementary D Drawings,” D-i-8 to D69 inclusive, were referred to in the contract between plaintiff and Mr. McDonald; that they had been exhibited to the plaintiff without guaranty as to their completeness; that the ” drawings did not show anything in regard to the manner in which or the method by which the surface and subsurface structures, including the vaults, which were interfered with by the construction of the subway, were to be relaid, reconstructed or readjusted,- so as to overcome or avoid such interference; that the- “ Supplementary D Drawings ” exhibited a horse car surface line on the surface of Broadway from Sixtieth street to at or about Sixty-fifth street, and from Seventy-second street to One Hundred and Fourth street, and an electrified surface railway, with underground ducts and vaults, etc., from Sixty-fifth street to Sevénty-second street; that subsequent to the date of said drawings the horse car lines shown thereon were electrified, and at the date of the contract between plaintiff and Mr. McDonald the surface railway on Broadway from Sixtieth to One Hundred and Fourth street was an electric underground railway, operated by electric power obtained from a slot rail in an underground conduit, and in connection with said electrified railway there was an underground conduit and electric vaults, etc.; that upon the ‘ ‘ Supplementary D Drawings ” some of the sub-surface vaults were shown in connection with the electric surface street railway between Sixty-fifth and Seventy-second streets; that the monthly statements for the restoration and reconstruction of the vaults covered all the work done by the plaintiff from Sixtieth street to One Hundred and Fourth street, including the work done on the reconstruction and restoration of the vaults between Sixty-fifth street and Seventy-second street shown on drawings referred to; that beginning with the month of December, 1902, and from time to time thereafter, the plaintiff furnished materials and performed the work necessary to restore and to reconstruct the sub-surface vaults which had been destroyed or injured during the construction of the tunnel to a condition safe and suitable for their usual service and to the reasonable satisfaction of their owners; that the plaintiff directed his superintendents, foremen and bookkeepers to keep track of the labor and materials used in said work on the white slips and in accordance with the “white slip system,” and thereafter and beginning with the month of December, 1902, from time to time and including the month of November, 1904, the plaintiff rendered to and filed with the chief engineer of the Construction Company monthly statements or bills for restoration and reconstruction of sub-surface vaults from Sixtieth street to One Hundred and Fourth street which represented the plaintiff’s claims for additional compensation for said work of restoring and reconstructing said sub-surface vaults including the vaults between Sixty-fifth street and Seventy-second street, and which plaintiff claimed to have kept in accordance with the “white slip system;” that the monthly statements or bills were twenty-four in number, are in evidence and aggregate a total of $53,958.43.

The appellants assert that plaintiff was permitted to recover for a large amount of work on surface and subsurface structures which were correctly indicated upon the “Supplementary D Drawings” by reason of the action of the referee in ignoring the clause of the contract which provides that no guaranty of accuracy was to be attached to the drawings; that plaintiff undertook for the lump sum of one hundred sixty thousand dollars to perform all of the work required to be done on the surface or sub-surface structures whether or not the same were correctly indicated upon the “ Supplementary. D Drawings,” and that the referee was in error in allowing plaintiff additional compensation for work which was correctly indicated upon the drawings.

In support of his argument he calls attention to certain provisions of the contract between Mr. McDonald and plaintiff in substance that the plaintiff undertook to perform for the lump sum of one hundred sixty thousand dollars the work of maintaining, reconstructing and readjusting the sub-service structures irrespective of what was shown on “ Supplementary D Drawings.” He quotes from a clause of the contract which provides in substance that if in the specifications or contract drawing, or in the provisions of the contract, any additional or other matter or thing requisite for the construction be not mentioned, the same is to be deemed included, and plaintiff undertakes to do the same as part of his work, the prices to be paid him as herein provided to include full compensation for any such additional matter or thing; that the work is to include necessary support and readjustment of vaults, etc., interfered with during the construction of the subway, and thereby such readjustment is to be deemed an essential part of the construction of the railroad; also the provision of the contract requiring the plaintiff to support said sub-surface structures and when necessary to reconstruct the same, the work to be done to the reasonable satisfaction of the owners of the same. Other clauses of the contract are referred to by counsel, some of which are noted in the earlier part of this opinion.

As I read the findings in this case effect was given the contract between the parties.

The cause of action selected by counsel illustrates that conclusion.

The contract provided (A) that as the work thereunder progressed changes might be made in the plans and specifications which might radically alter the amount of work to be done or materials to be furnished thereunder; (B) a reserved right in the board of commissioners to require additional work to be performed or additional materials to be furnished to those set forth in the plans of the rapid transit railroad, the reasonable value of additional work and materials required to be additionally paid to plaintiff, the value to be determined by the engineer of the Construction Company and plaintiff to become entitled to payment for additional work performed or additional material furnished upon the determination of the engineer as shown by special plans and specifications to be issued by him; (0) authority in the board of commissioners to issue supplemental plans accompanied by specifications.

The findings of the referee are supported by reference to the pleadings. In the selected case, the complaint (cause of action number six) alleges (A) upon the direction, authority and requirement of defendants and the board of rapid transit railroad commissioners and under plans made and furnished by the Metropolitan Street Railway Company at defendants’ request, (B) plaintiff. performed additional work and furnished additional materials in connection with and in addition to the performance of the contract (Exhibit A being the contract between plaintiff and Mr. McDonald) consisting of the construction of sub-surface vaults which it was deemed necessary to remove in the construction of the subway, etc. The answers of defendants contained an admission of the allegation of the complaint in the language quoted heretofore relating to numerous causes of action, and the finding of the referee was in substance the finding also quoted and referred to in connection with the “Force Account Basis” that plaintiff at the special instance and upon the request and direction and requirement of defendants and the hoard of commissioners and upon plans furnished and provided by them performed work and furnished mate^ rials extra and additional to the work and materials set forth in the plan of the rapid transit railroad referred to in the contract and in addition to the performance of said contract in the construction or reconstruction of a large number of sub-surface vaults which it was necessary to remove in the construction of the subway, the value of labor and material, the method of keeping and rendition of account thereof, verification by the engineer of the Construction Company of the accounts kept and rendered, and generally in the form hereinbefore referred to; that no objection was made by defendants as to the correctness of any of the hills or claims therefor rendered by plaintiff.

The record also discloses findings by the referee which have a direct bearing upon the items under discussion. Preceding the narration of the finding relating to the “ Force Account Basis ” in this opinion, I called attention to a finding made by the referee in effect that the plaintiff was required to and did perform a large amount of extra and additional work and furnished a large amount of material and labor by direction of defendants. Further findings by the referee are: Defendants included in the monthly estimates made by them from month to month certain amounts on.account of extra work sued for in this action. The first monthly estimate was made in July, 1902, and therein was an item of $13,300 stated to be for “ pipes, vaults et cetera not on the plans.” From month to month the same heading was continued and the amount of the previous month’s estimates was carried into the estimate then made. As disclosed in finding number thirty, the estimate for May, 1904, was $270,000, and that amount continued to and including October, 1904, which was the last estimate made by defendants. The estimates though headed as stated were not intended to be limited to pipes, vaults, etc., but were an estimate of bills for extra work. As payments were made on said estimates, plaintiff sought to have defendants specify upon what particular bill they should apply and one Olmsted, representing defendants after the larger portion of this estimate had been made and paid, directed plaintiff to apply the payments made, $270,000, upon bills sent in for extra work under several heads thereon aggregating $397,515.59, embracing the items under discussion “Restoring track vaults,” $54,426.47. Thereafter and about December 1st, 1904, plaintiff made out a bill which he presented at a meeting held January 12th, 1905, which plaintiff attended at the request of defendants. Present at the meeting at Mr. McDonald’s office were Mr. McDonald, Mr. Deyo, chief engineer of the Construction Company, Mr. Douglas, Mr. Moore and Mr. Olmstead, engineers of the same company, the counsel for the defendants, plaintiff and his brother, one O’Connell, a bookkeeper for plaintiff and one Henning, an engineer in the employ of plaintiff.

The first ten items on the bill presented by plaintiff consisted of charges, including the vaults, aggregating $397,519.59, and were the same items and amounts upon which plaintiff had been directed to credit the $270,000, and that credit together with a statement showing the balance $127,319 unpaid appeared on the bill. Following the ten items were fifty-four several items of extra or additional work aggregating $169,210.21. The referee found that no objection was raised at the meeting by any person present that the monthly estimates aggregating $270,000 were not proper or that the application of the payment applied was not a proper credit, or as to the correctness of the balance of $127,319, but it was admitted by all present that the first ten items were extra work for which plaintiff was entitled to be paid; thereupon, the remaining fifty-four items in the bill were considered separately and the greater number of them agreed upon and afterwards paid. At the same meeting claims were made by plaintiff other than those appearing on the bill and were discussed, but not acted upon. Thereafter and prior to the commencement of this action, the amounts paid plaintiff, $270,000, above referred to, were applied by defendants with the acquiescence of plaintiff as a payment upon the regular work under the contract, and such payment was allowed defendants as a credit under the first and second causes of action herein.

Additional circumstances in this case negative the argument of counsel for appellants. In his brief, he analyzed causes of action numbers four, five, six, seven and fourteen, which causes óf action sought a recovery for reconstruction of drainage, conduits, ducts, vaults, water and gas pipes, all of which were surface or sub-surface structures, for which the referee awarded to plaintiff $289,805.20, of which sum $51,651.57 was awarded on account of reconstruction of vaults, the item selected and above discussed. The answer of each defendant for a separate defense set out the provisions of the contract relating to additional work, the necessity of a determination of the value of such work by the engineer of defendants, as well as a final certificate to be made by him. That on October 18th, 1906 (which was two months after the commencement of this action), the engineer made a final statement in writing under the contract, a copy of which is annexed to and made a part of the answers, and is headed ££ Final Certificate, Decision and Determination, Regular and Additional Work, Sub-section No. 6, Contract No. 1.” In that paper the engineer of defendants included the work above described and certified the value of the same at $238,968.59. As to cause of action number six, under consideration, the referee’s finding was $51,651.57, while the amount certified in the decision by the engineer, annexed to the answer, for vaults was $47,157.13.

In the brief of counsel where the stated causes of action are discussed, he states: ££It is true that in connection with almost all of these different classes of work the plaintiff was required to perform certain work additional to that prescribed by the contract plans and specifications. The additional work in this connection was due for the most part to changes of plans and enlargement of the rapid transit railroad which the plaintiff contracted to build. But there is no admission in' the answers that, all of the work done under the various causes of action above enumerated -was' additional work. There is no admission as to the amount or extent of additional work * *

I believe I have demonstrated from the findings in this case that the award made by the referee was justified, that the defendants by their admissions and a practical construction of the contract evidenced their liability to respond to plaintiff for the work and material for which judgment has been awarded assuming error of law in the admission of evidence and allowance of interest did not arise,' and that plaintiff was not required as a prerequisite to a right to maintain the action to procure a final certificate of the engineer, which question will later be considered. The fact must not be overlooked that the affirmance of the judgment was unanimous, and discussion upon the facts is thereby rendered useless. Our review of the foregoing cause of action is due alone to the amount involved and the lengthy consideration given same by appellants’ counsel and by reason of the alleged errors of law presented by him.

Counsel for appellants argues that error was committed by the referee by reception in evidence of the account books of plaintiff, and the daily reports and monthly summaries rendered to defendants as proof of the quantity of work performed and materials furnished and the value of the same. This criticism applies not only to the items which we have just considered, but to all items based upon what has been termed the “ Force Account Basis.” Summarized, his ohjections are that all laborers and employees were not called as witnesses to establish the correctness of the evidence received; that at least thirty-three foremen were not called as witnesses and their absence was unaccounted for; that two of the superintendents of plaintiff were not called; that inspectors of the rapid transit and superintendents of teams were not called; that different bookkeepers had been employed by plaintiff, one of whom was not called, and he argues that the original white slips if produced could not have been received as original memoranda and under plaintiff’s proof because the necessary foundation had not been laid.by calling all the foremen.

That assuming that the necessary foundation had been laid by the testimony of all the foremen to admit the original white slips, no secondary evidence of their contents could be received.

That even assuming that secondary evidence of the contents of -the white slips could be received, the book entries and the summaries and white slips transcribed therefrom are not competent for such purpose.

That assuming that the original white slips had been duly authenticated by all the foremen and were offered, they would not be competent because they represent or embody conclusions.

That the use made by the defendants of the plaintiff’s account books on the trial did not give them the competency that otherwise they would not possess.

The competency of this evidence cannot be established by an application of the rales governing actions on an account stated.

A large number of decisions are cited by counsel hearing upon the rales of evidence governing the admission of account books in evidence, but in my opinion the various rules of law called to our attention are not controlling or applicable to the case at bar. The question of the competency of the evidence criticised must he determined after a review of the facts disclosed in the findings of the referee, which have been affirmed.

Under the agreement of October 1st, 1901, designated “Force Account Basis ” which embraces the findings we have above considered, the system of keeping accounts was devised and directed by defendants and their engineer and servants; the plaintiff was directed to keep the accounts according to the method adopted by defendants and he followed the directions given him. The referee found that the books had been correctly kept. Daily entries were made upon the forms prescribed by defendants, certified by the foremen, examined and approved by the superintendent, and a copy thereof daily sent to defendants. Monthly summaries were, as directed, forwarded to defendants, certified as correct and examined by their engineer. The engineer and “checkers” of defendants verified not only the additional work and materials furnished, but likewise the entries on plaintiff’s books by frequent inspection, and when any discrepancy was disclosed between their computations and the reports of the servants of plaintiff all errors were eliminated and all suggested corrections immediately made and entered. Comparison was made by defendants of the daily reports with monthly summaries before certification of the same by their engineers. The books of plaintiff were kept at an office on Eighty-sixth street and together with all daily reports, bills and papers were at all times open to inspection and examination by defendants and were in fact examined and inspected by them practically every day. The defendants had a copy of every entry on plaintiff’s books, and they also had the reports of the checkers and engineers employed hy them to measure up and keep account of the additional work and material supplied by plaintiff. From time to time payments on account thereof were made by defendants.

In view of the magnitude of the work, the thousands of employees necessary to perform the same, and the systern, of keeping the accounts having been prescribed by the defendants, we may assume that' the method employed was in accordance with the usages of business at that time. The referee found that defendants’ counsel conceded upon the trial that in cases where extra work was required which was not of a character in the list of unit prices, the practice of allowing the reasonable value of the labor and material prevailed, and that 15% was added to the cost of labor, and 10% to the cost of material, and that was the schedule adopted throughout the construction of the subway including plaintiff’s work.

The daily and monthly reports, the books wherein all records were correctly kept, became a “mutual ” account between the parties. Such books and records did npt alone constitute the accounts of the plaintiff; they were kept for the use of defendants as well as plaintiff, inspected, checked up, discrepancies adjusted, a copy of the entries daily sent to defendants, followed by monthly summaries which were certified by defendants as correct, and thereby embodied the accounts of the defendants. The facts so fully stated in the findjngs of the referee lead to the conclusion that the books and papers were, as between the parties, competent as evidence of admissions. The accounts were presented to the defendants and retained by them without criticism or objection to the correctness thereof. An account thus presented has ever been treated as an admission of the correctness of the same, and a witness presenting the account for payment held competent to testify to such fact. As between the parties here all of the books and records were properly received in evidence as admissions of the defendants. (1 Greenleaf on Evidence [16th ed.], sec. 199; Rockwell v. Merwin, 31 N. Y. Super. Ct. 484; affd., 45 N. Y. 166.) While the opinion of this court, in the case last cited, does not deal with the question of evidence, its importance could