235 Pa. 260 | Pa. | 1912
Lead Opinion
Opinion by
This bill was filed by certain citizens, residents and taxpayers of the city of Philadelphia against the city, its officers, and the Filbert Paving and Construction Company, and prays that a contract and supplemental contract between the city and the company for repaving and resurfacing asphalt paved streets occupied by
The bill charges that the contract and supplemental contract were entered into in violation of law and in collusion with the city officials in pursuance of a conspiracy to cheat and defraud the city, that the supplemental contract was void for the further reason that it was not preceded by any advertisement for bids for the work covered by it, and that the company had negligently and fraudulently returned false measurements of work actually done and claimed and received payments of money according to rates contrary to the spirit and intent of the contract. The learned court found that the supplemental contract was invalid because its execution was not preceded by advertisement or competitive bidding, and that it was the result of an unlawful combination between the department of public works and the Filbert paving and Construction Company to defeat the provisions of law relative to advertising and competitive bidding, and entered a decree declaring it to be illegal and void and restraining the controller from approving, and the city treasurer
As said by the learned court below, the history of the transaction makes the court’s findings clear and its conclusion inevitable. The story of the several transactions leading up to and consummated in the execution of tbe supplemental contract is found in the evidence submitted on the trial of the cause. The director of public works in December, 1909, advertised for proposals to repair the asphalt streets occupied by the Rapid Transit Company’s railway tracks. The work was divided into three classes, one in which the number of square yards to be repaired in a given city square was between 100 and 500 yards, one between 500 and 1000 yards, and one where it exceeded 1000 yards. The appellant company and Barber Asphalt Paving Company bid for each class of work. Upon the basis of the yardage of work done during tbe previous year, tbe Barber Company was the low bidder. The bids were all rejected. In May, 1910, there was a second advertisement and bids were again submitted by the same bidders. There were, however, but two prices asked for: one where the number of yards was between 100 and 500 in a given square, and the other where tbe number exceeded 500 yards in a square. The bid of the Barber Company was the lower, but the Filbert Company claimed that the Barber Company bad been given exclusive information as to the approximate quantities of work to be done, and the bids were rejected. There was no force, however, in such claim as tbe Filbert Company knew tbe amount of work which bad been done tbe preceding year and that tbe bids would be computed on tbe
In June, 1910, there was a third advertisement and a third submission of bids, and the specifications required the bids to be computed on estimated quantities of work based on the amount of work of the same character done in 1909. These estimated quantities of resurfacing were 34,139.66 square yards in amounts over 100 and less than 500 square yards in a given city square, and 90,018.79 in amounts exceeding 500 square yards in a city square. The director of public works reserved the right to order work in different amounts at his discretion. The Filbert Company bid seventy-five cents for work in quantities of 100 to 500 yards, and twenty cents for work in quantities exceeding 500 yards in a given square; while the Barber Company bid sixty-three cents for each class of work. The Filbert Company was the low bidder, based on the estimated quantities of the work given in the specifications, and the contract was awarded to that company. The specifications on which the bids were made provided that the work should be done in strict accordance with the annexed specifications which were made a part of the bid and that contracts for work might be awarded and executed from time to time in the discretion of the department of public works. Prior to the submission of bids in June 1910 the Chief of the Bureau of Highways had in his possession information showing that the total yardage required in amounts less than 500 yards in a square was 70,800 square yards and the total yardage in amounts exceeding 500 yards in a square was 30,832 square yards. The learned court finds that when the Chief of the Bureau of Highways inserted the estimate given in the advertisement for bids he knew that the estimate was misleading, and further that the records
It will be observed that the bid of the Filbert Company was grossly unbalanced and, as was found by the count, was notice to the officers of the city that some fraud was contemplated. On the estimate given in the advertisement it is obvious that the bid of twenty cents would net a large loss to the contractor for every yard done and it is equally clear that on the seventy-five cent bid there would be a large profit. The bid, however, was accepted.
Of the estimated quantities of resurfacing given in the advertisement, 72% per cent, of the whole work was in amounts greater than 500 yards in a given square, and was to be computed at twenty cents per square yard, and 27>2 per cent, was in amounts between 100 and 500 yards in a given square and was computed at seventy-five cents per square yard. When, however, the work was actually done and paid for under the contract prior to November 11, 1910, amounting to 176,921 yards, only 17 2-10 per cent, of the whole had been done in amounts exceeding 500 yards in a given square and paid for at twenty cents per square yard, and 82 8-10 per cent, of the whole had been done in amounts exceeding 100 yards and less than 500 yards and paid for at seventy-five cents per square yard. In addition the learned court finds: “On June 29, June 30, and July 1st, the day the contract was executed and
In addition to the above it appears from the evidence, and is so found by the court, that more than one-half of the work done at seventy-five cents per yard was in amounts exceeding 400 and not exceeding 500 yards in a given square, that more than 15,000 square yards were in amounts exceeding 496 and not exceeding 500 yards in a square, that in a number of instances the officers of the Survey Department made report of measurements and approved bills under the contract in amounts equally or slightly less than 500 sqare yards in a given square, where the work actually done by the Filbert Company in the square was in excess of 500 square yards. From these and other facts the learned court
From the established facts in the case, there is no escape from the conclusion that the officers of the department of public works were in collusion with the Filbert Company from the incipiency of the contract to the filing of the bill in this case. When the advertisements were made for bids in December, 1909, the department had before it the work of that year and, therefore, the data was in its possession, as found by the court, from which it could have given approximately correct estimates of the different classes of resurfacing which would be required in 1910. The same information was before the department when it advertised for bids in May, 1910. Not only did the department have such information, but the Filbert Company could have obtained such knowledge from its own records and doubtless did so. It was the merest pretext on the part of that company in demanding of the department that the lower bid of the Barber Company made in May, 1910, should be set aside because the latter company had been given information as to the approximate quantities of work to be done. The department of public works and the Filbert Company both had the information which was given to the Barber Company. The two companies, therefore, stood upon the same footing as to knowledge of the approximate quantities of work which would be required to be done in the year 1910. The learned court is fully sustained by the facts in finding that the claim of the Filbert Company was made to secure the insertion of misleading information in the
The above recital of part of the facts is in itself amply sufficient to warrant the finding of the learned court below that there was fraud and collusion between the contractor and the city officials.
Most of the material facts were known to the department of public works at the time it entered into the supplemental contract of August 4, 1910. The director knew, as found by the court below, when he executed the supplemental contract that the twenty-cent work instead of being 72% per cent, of the total, as he had assumed in his price formula, was by actual performance only 5 per cent., and that the seventy-five cent work instead of being 27% per cent, was by actual performance 95 per cent, of the total. In short, he knew that he was paying seventy-two cents per square yard for the work. This was found by the court and is amply sustained by the evidence. In addition to other evidence, the attention of the director was called to these facts by a letter of July 13, 1910, in which the relative quantities of high priced and low priced work being done by the contractor were directly brought before him. This information was not only known to the head of the department but to the officers who gave the orders to the contractor to do the work. With this information before him, with the knowledge that under the contract of June, 1910, the contractor was doing only 5 per cent, of the work at the lower price and 95 per cent, of the work at the higher price, and the whole work at over seventy-two cents per square yard, the
The contract of August 4, 1910, was a supplemental agreement prohibited by the statutes and ordinances regulating municipal contracts, and was therefore invalid and not binding upon the city. The requisites of a valid municipal contract and the argreements forbidden by the statutes and ordinances applicable to the city of Philadelphia are pointed out in Smith v. Philadelphia, 227 Pa. 423. The learned counsel for the appellant seeks to differentiate the present case from Smith v. Philadelphia on the ground that the supplemental contract was authorized by the original contract and was merely an extension or an enlargement of the prior contract. With this contention we do not agree. The contract of August 4th was a new agreement entered into by the city and the contractor by which the latter was to perform work at the unit prices stated in the original contract “and in accordance with the proposals and specifications hereto attached” to the amount of $150,000. Had this agreement been made with another contractor on the same terms, it would not even be suggested that it was not an agreement separate and distinct from the contract of June 29, 1910. That it is between the same parties is wholly immaterial. Had it not been entered into, there would be no liability on the part of the contractor to perform the work nor any liability on the part of the city to pay for the work. It was a new agreement on the part of the contractor to repair and resurface the traction road streets with work and materials to the amount of $150,000.
The original contract provided that the work to be done under it should not exceed the sum of $50,000,
That the original contract required the contractor to enter into a further contract at the request of the city
The decree of the court below is affirmed.
Dissenting Opinion
dissenting:
I cannot give my assent to the proposition that the city did not have the power to make the contract in question, and that is one ground upon which the court below and here bases the decision. I fully agree that if there.was collusion and fraud either in making the contract, or in the performance of work under it, the relief prayed for should be granted. But it is a very different
For the reasons stated, I cannot agree with that part of the opinion which in effect declares that the original contract did not cover repairs of street for the whole of the year 1910, and that it required readvertisement as additional repairs became necessary.