87 N.J. Eq. 491 | New York Court of Chancery | 1917
The counties of Atlantic and Burlington advertised for proposals for the building of a highway bridge spanning Mullica river on the Ocean boulevard, joining the. two counties. The complainants’'proposal was accompanied by a certified check for $5,000 as a good faith that they would sign the contract upon the acceptance of their bid. Their bid was the lowest, and upon an alleged award of the contract, and a default by the complainants, the counties declared the check forfeited. This suit is to invalidate the forfeiture and to recover the money.
The proposed bridge was to be of the modern steel structure type, of four fixed spans with a bascule span in the centre, electrically operated, to permit navigation, supported by steel enclosed concrete piers resting upon wooden piles sunk into the bed of the river. The plans furnished by the counties illustrate the stationary portion of the bridge only and indicate that the piers supporting the bascule span, of oblong shape, were to be set in the stream transversely and seventy-four feet apart from centre to centre, which distance was to be the length of the bascule span. Concerning the bascule span, the specification'provided that—
“Each bidder will submit detailed plan and specifications of one, or more, kind of two-leaf, deck, bascule span and the owners of the Rail, Seherzer and Strauss patents (Seherzer Rolling Lift Bridge Company, Chicago, 111.) have been fuzmished plans and specifications from which they may prepare plans and specifications for the use of bidders, and bidders may secure from these owners full information regarding the plans and specifications.”
Bidders were not limited to the Rail, Seherzer & Strauss patents, and some of them submitted'plans of other makes with their proposals which met all requirements. The complainants and other -bidders obtained from the Seherzer company plans of its patented device, showing the piers upon which the bascule span rested, reversed, set lengthwise with the stream and nearer to each other by four and one-half feet from 'centre to centre, and calling for a span only sixty-nine and one-half feet long. The distance between the exterior of the piers remained the same. Evidently they were intended to be stationed so as to
Whether the predicament thus created by the plans of the Scherzer company failing to> accord with those of the counties, is chargeable to the counties, because of their adoption in the specifications, or to a misconception of the complainants as to which set of plans obtained, is of no moment. Nor is it of any consequence, in determining the right to the deposit, whether the complainants subsequently, in the course of negotiations, tacitly agreed to a modification of their proposal providing for a bascule span of the required length, as the defendants contend. The decision turns upon other considerations. The provision in the specifications and proposals relating to the deposit, which is therein characterized as liquidated damages in case of default, is in the nature of a penalty, to be construed strictly and to be interpreted as working a forfeiture only if the contract was lawfully awarded and wrongfully declined. Fairbanks, Morse & Co. v. City of North Bend, 68 Neb. 560; Perine Cont., &c., Co. v. Pasadena, 116 Cal. 6. The construction of the bridge was authorized by chapter 46 of the laws of 1914, page 67, and under the statute the contract was to be awarded to the lowest responsible bidder upon competitive bidding after public advertising. P. L. 19í2 p. 598. This limitation upon the exercise of tlie power restricted the counties to an award of the contract to the bidder who qualified, not only by being the lowest .as well as responsible, but also who, by his bid, proposed to do the work in the manner prescribed by the call. As to all other bids not in compliance with the terms upon which they were received,
Furthermore, it is to be noted that the points of difference between the Scherzer company’s plans and specifications as prepared and submitted, and those called for, are not only as to length of bascule span and position of piers, but the additional weight of the leaves made necessary a general reapportionment of dimensions and of materials and a readjustment of appliances to insure a perfect balance. Of these details, plans, and specifications were to be furnished, as evidenced by the official specifications for the bridge, which required that the bascule design was to include full power equipment, adequate to operate both leaves, and also signals, brakes and all modem safety devices, and that “all of these items must be accurately and fully described by specifications and shown by plans to be submitted by the bidders,” including a description of bearings, machinery parts and power equipment. This- requirement could not be .dispensed with. In Case v. Trenton, 76 N. J. Law 696, the lowest bidder to whom the contract was awarded failed to give a description of the properties of asphalt to be used in the paving of a street and the proportions of the several ingredients of the wearing surface of the street pavement, &c., as demanded by the specification. The court of errors and appeals rejected the bid and set aside the award, holding that “these omissions seem to be more than mere irregularities which the municipal authorities
The complainants arc not estopped from setting up the invalidity of the award (Fairbanks, Morse & Co. v. North Bend), and, as the award of the contract was unlawful, there could be no forfeiture.
This result renders it unnecessary to decide whether the complainants implicitly agreed to modify their proposal relative to the bascule span; but, as counsel laid considerable stress upon this question, a brief discussion may serve to reconcile their widely-divergent views.
It was nearly a month after the bids were received that the county engineer of .Atlantic county discovered the conflict in the plans and advised the complainants that the discrepancy in the dimensions must be made up so as to correspond with the plans on file. Shortly afterwards a controversy arose over the character of coffer-dams to be used in setting the piers; the complainants claiming that steel shells, which were to permanently enclose the piers, could be efficiently utilized, while the engineer contended that the specifications comprehended coffer-dams independent of the shells. The use. of the shells would have saved
Forfeiture is also resisted on the ground that the complainants lawfully withdrew their bid before the award was made, and also that they justifiably withdrew, before the award became effective, because of undue delay in awarding the contract. June 9th, 1915, at Atlantic City, was fixed as the .time and place for receiving the bids. At a meeting of the board of freeholders of Atlantic, county, held on that day, a resolution was passed awarding the contract to the complainants, “provided, however, that before such award shall be binding it must be concurred in by the board of chosen freeholders of the county of Burlington.” On July 7th following, the board of freeholders of Burlington county resolved to award the contract to the complainants,
“subject to the sale oí the bonds hereinafter provided for, and subject to the ratification and approval of said contract and of the terms of this resolution by the board of chosen freeholders of the county of Atlantic.”
A bond issue of $40,000, to defray • one-half. the cost of the bridge, was authorized to be issued, in form as attached to the resolution, and to be sold at public auction. On July 14th the Atlantic county board passed a further resolution reciting the foregoing facts and in which it resolved to accept the terms as
I cannot agree with the proposition advanced by the complainants’ counsel that a successful bidder for public improvements may arbitrarily withdraw his bid at any time before its acceptance and escape with his guarantee against a default; a view which finds expression in a dictum in the opinion of the ’United States circuit court for the northern district of New 'York, in Moffett Co. v. Rochester, 82 Fed. Rep. 255. A competitive bid submitted under statutory privilege and regulation is in the nature of an option to the municipalit}7, based upon a valuable consideration, to which the principles of law governing options, generally, are applicable. The consideration passing is the privilege of bidding and the legal assurance to the successful bidder of an award as against all competitors. Such an option-pending action consistent with its terms, expressed or implied, is a vested right of contract, of which the. municipality
It seems to me, however, that the complainants were justified in withdrawing their bid, because of the failure to promptly and decisively accept it. In other words, the option io the counties expired by its own limitation. Here there was no specified time for acceptance, and in the absence of a fixed period it is to be presumed that a reasonable time, under the circumstances, was agreed upon, and in my opinion the maximum of this time was reached when the two boards passed judgment upon the bids and awarded -the contract, provisionally, on July 7th. This formal action is cogent proof of ’ample opportunity for'examining the bids, investigating the fitness of bidders, and discharging all other essentials, preparatory to the boards’ exercise of their quasi-judicial function, and circumscribed the time tacitly agreed upon for the making of the award. While much could be said in criticism of the delay up to that time, further postponement of finality of action was without legal excuse, and the complainants were thence at liberty to withdraw their bid, and any concessions thereafter made by them were matters of grace, subject .to such conditions as they deemed fit to impose. It is to be admitted that the vicissitudes of trade are the risks of the bidder, but this hazard has its limitations and in reason could not be prolonged by-an award which might or might not have eventuated in a binding contract; depending altogether upon whether one of the counties could raise funds by a sale of its bonds. Bidders did not bargain upon this contingency. It was not a condition precedent to their right to enter into the contract that the counties should be first in funds, as was the case in Hurley v. Trenton, 66 N. J. Law 538; 67 N. J. Law 350.
The defendants attempt to meet this right to withdraw by asserting that the complainants’ delay in withdrawing amounted to a consent to an extension of the time for the execution of the contract until ’the bonds vrere sold, September 1st. As
I’Ve have been considering the right of the complainants, to a return of their deposit, from a ptirely legal standpoint. But it is manifest, taking into consideration all of the elements and circumstances surrounding the transaction, that they are entitled to relief strictly upon equitable principles. To force from them a penalty for the failure to execute a contract which they agreed to undertake in June, the performance of "which was suspended for nearly three months by the defendants, and which could then have been carried out only 'fit a greatly advanced oirtlav, would work an oppressive and unconscionable hardship. And, as against the right, to equitable relief, the complainants’ perseverance to obtain the contract does not militate, because, as before stated, their efforts were bent solely upon securing'a contract based upon a favorable construction of the specifications regarding the coffer-dams, which would possibly have resulted in a saving sufficient to offset the increased burdens. In fact, the complainants abandoned the undertaking only after a soaring of prices, during a long period of inaction on the part of the defendants, which forecast a heavy loss, and then only after the counties refused to yield their construction, whereby the losses might have been retrieved.
That a court of equity has jurisdiction to relieve from the enforcement of a forfeiture on legal or equitable grounds is undoubted. Barlow v. Jones, 87 Atl. Rep. 649.
The complainants are entitled to a decree for $5,000, with interest from November 10th, 1915, the date when the forfeiture was enforced and the check cashed, and also costs of suit.