193 P. 824 | Or. | 1920
Lead Opinion
“No exception need be taken or allowed to any decision upon a matter of law, when the same is entered in the journal, or made wholly upon matters in writing and on file in the court.”
Milwaukie is a municipal corporation. By its charter its council “has full power and authority to determine and provide for everything necessary or convenient to the exercise of the authority herein granted; to grade, pave, plank or otherwise improve and keep in order highways, streets and alleys.” Subsequent sections of the charter, as amended in its most recent form, empower the council to order any specific improvement on petition of one or more owners of property abutting upon a street, and to levy and collect an assessment from such realty to defray
“Such contract or contracts shall be let to the lowest responsible bidder for either the whole of said improvement or such part thereof as will not materially conflict with the completion of the remainder thereof, but the council shall have the right to reject any and all proposals received.”
Provision is made in Section 53 for a certificate by the engineer of the completion of the work to his ap
“Neither Milwaukie nor any officer thereof shall be liable for any portion of the cost or expense of any street work or improvement, which is assessed upon the property benefited thereby, by reason of the inability of Milwaukie to collect the assessment levied for the payment of such improvement, but the contractors doing such work shall be required to rely solely upon the fund accruing from the property benefited, assessed and liable therefor; and the said contractors shall not require nor compel Milwaukie by any legal process or otherwise to pay the same out of any fund, except in cases where for any reason such assessment shall be invalid.”
The findings of fact recite the presentation of a petition to the council to improve Front Street in Milwaukie throughout its entire course through the town—
“by grading the street to the established subgrade; by constructing concrete curbs where the fill does not exceed two feet in depth; by constructing wooden sidewalks five feet in width on that portion of the street south of Washington Street except on the west side of the street between the point where said street leaves the track of the O. W. P. Railway, near Madison Street; by constructing concrete sidewalks six feet wide on that portion of the street north of Washington Street except where the fill exceeds two*483 feet in depth, in which case the sidewalks are to be constructed of wood; by constructing inlets, catch-basins, drains, headers and other incidentals to a proper improvement; by paving the street fifty feet wide between curbs on that portion north of the point where said street leaves the track of the O. W. P. Railway near Madison Street, except on that portion where the fill exceeds two feet in depth, in which ease macadam is to be used; by paving the street thirty feet in width south of the point where said street leaves the track of the O. W. P. Railway near Madison Street, said thirty feet being the west half of street, except on that portion of the street where the fill exceeds two feet in depth, in which case macadam is to be used; said pavement, except where macadam is mentioned, to be hard surface not to exceed one dollar and twenty-five cents per square yard, exclusive of grading, curbs, catch-basins,” etc.
We ascertain from the findings of fact that the city engineer filed plans and specifications providing for and describing four different and distinct kinds of pavement: (1) Roxol bituminous pavement on a macadam base; (2) concrete pavement; (3) asphaltic concrete pavement; and (4) macadam pavement.
The council adopted a resolution of its intention to improve the street according to the prayer of the petition, and in due time passed Ordinance No. 87, entitled: “An ordinance to provide for the improvement of Front Street in Milwaukie, Oregon, from the town limits on the north boundary to the town limits on the south boundary, in said town.” The ordinance provided that:
“Front Street shall be improved in conformity with the plans and specifications heretofore filed with the recorder, and which were adopted by resolution of the town council on the thirteenth day of May, 1913.”
“Each contract shall contain a stipulation to the effect that the person, firm or corporation to whom the contract is let shall look for the payment only to the sum assessed upon the property liable to pay for such improvement, and collected and paid into the town treasury, for that purpose, and they will not require Milwaukie, by any legal process or otherwise, to pay the said sum out of any other fund.”
On June 14th, pursuant to instructions from the council, the recorder of Milwaukie published a notice to contractors, informing them that proposals would be received for paving Front Street until June 24, 1913, when they would be publicly opened and read. It was stated, in substance, that no proposáis would be accepted unless accompanied by a certified cheek equal to 5 per cent of the amount of the bid; that plans could be seen and specifications and form of proposal obtained from the recorder; and that the right was reserved to reject any and all bids. A bid was received for Roxol bituminous pavement on a macadam base, but this was rejected on June 24th. On that same date the council directed the recorder to re-advertise the invitation for ten days, according to plans and specifications, except that said advertisement should request bidders to furnish their own specifications with their respective proposals, for any kind of hard surface pavement which they proposed to lay, the same not to exceed $1.25 per square yard. This was afterwards modified, in that the invitation should be published for five, instead of ten days. In pursuance of that instruction the recorder published a notice
“Contractors will furnish specifications for hard-surface paving only, and at a cost not to exceed $1.25 per square yard.”
It appears from the findings that at the time specified in the last notice there were several bids for improving the street: one for Eoxol bituminous pavement on a macadam base, at $1.20 per square yard; another for concrete pavement at $1.25 per square yard; and the plaintiff itself submitted three bids: (1) for bituminous pavement on a macadam base at $1.10 per square yard; (2) for El Oso asphaltic concrete pavement on crushed rock base at $1.18 per square yard; and (3) El Oso asphaltic concrete pavement on cement concrete base at $1.25 per square yard. Each of the bids of the plaintiff was less than the proposals of the other two parties as computed on the total pavement. Based solely on the proceedings heretofore mentioned, the council entered into a contract with the plaintiff on July 18, 1913, to pave the street in accordance with its proposal attached to and made part of the contract. Various terms and conditions regarding the prosecution of the work were included in the contract. Section 24 of that agreement is in these terms:
“That the payment by the party of the first part for the performance of this contract shall be made from a special fund created for that purpose pursuant to terms and provisions of the charter of said town pertaining to the construction of street improvements and for the assessment of the cost thereof against the real property benefited and for the collection of said fund, but that the party of the first part*486 shall not nor shall any of the officers be required to pay any of said sums from any other fund than the special fund so raised for such improvement, except in the event that if for any reason said party of the first part shall fail, neglect or refuse to make or levy a valid assessment ag’ainst said real property, or any part thereof, abutting upon the part of said street to be so improved or benefited by said improvement.”
The findings recite that after the execution of the contract, as the plaintiff proceeded with the work, and from time to time, changes were made in the paving, under the direction of the city engineer, the principal ones of which were substituting pavement for macadam where the plans and specifications called for the latter surface. On May 28, 1914, the council passed ordinance No. Ill, declaring the total cost of the improvement to be $47,560.22, and an assessment was declared and levied for that amount. Certain defects in the assessment are pointed out by the findings, and it is said that the council has never passed any further ordinance or taken any further action to collect the assessment. The findings also state the aggregate amount of payments made to the plaintiff by the defendant and the issuance of certain warrants, all of which have been paid except three, totaling $8,091.14.
“The city may have had the power to provide for the improvement at the expense either of its general fund or at the expense of a special fund to be created by assessment upon the property benefited, but it had no power to mix these two methods of procedure. When, as in this case, it sought to make the improvement at the expense of the property benefited, it must*488 proceed as though it had no right to make it in any other way.”
See, also, Chicago v. Brede, 218 Ill. 528 (75 N. E. 1044); Rhode Island Mortgage & Trust Co. v. Spokane, 19 Wash. 616 (53 Pac. 1104); German-American Savings Bank v. Spokane, 17 Wash. 315 (49 Pac. 542, 38 L. R. A. 259). These precedents are cited to the point that when the city has embarked upon a particular scheme of betterment prescribed by its charter, it must adhere to that throughout, and cannot piece out its defects by reference to some other mode of improvement. So, we come to the conclusion that this action is for a breach of contract said to be grounded on a special system of street improvement, and that there is not involved any violation of an agreement based upon the general authority of a city to improve streets, the expense of which was to be defrayed by general taxation.
‘‘ Such contract or contracts shall be let to the lowest responsible bidder for either the whole of said*489 improvement or such part thereof as will not materially conflict with the completion of the remainder thereof. ’ ’
Under these provisions of its organic act, it was the imperative duty of the council previously to establish a standard of contract by which could be measured the question of who later was the lowest responsible bidder. In the case in hand a portion of the property holders in the municipality had voluntarily initiated a local proceeding for the improvement of the street. Moved by their petition, the council entered upon the special proceeding of improving the street at the expense of the abutting property. Its authority was thus limited, and anyone dealing with the municipality is bound to take notice of the limitations upon its power and the mode of its exercise. In other words, it is a question of dealing with an agent whose authority is known to be special and limited. Something is said in the findings to the effect that some of the pavements mentioned in the proposals are patented processes or designated by trade names, but the error is not necessarily affected by that feature. The vice of the proceeding would have been the same if no bidder had mentioned any copyrighted name or patented process of pavement. The departure from the charter requirements was made when the city abandoned its already established plans and specifications and required each bidder to furnish his own specifications. Hannan v. Board of Education, 25 Okl. 372 (107 Pac. 646, 30 L. R. A. (N. S.) 214), is a case in point, and the rule in cases where it is required that the contract shall be let to the lowest bidder and the necessity of prescribing a fixed standard in advance are
“There are many constitutional and statutory provisions requiring the awarding of public contracts to the lowest bidder. In order to comply with such requirement, there must, so far as the subject matter will allow, be an opportunity for competition on equal terms; and in order that all may be able to compete on equal terms, there must be established in advance a basis for an exact comparison of bids, so that all may bid on the same thing. Accordingly, it has been held that such provisions are not complied with unless plans and specifications are prepared in advance sufficiently definite and explicit to enable bidders to prepare their bids intelligently on a common basis.”
A wealth of authority is there cited in support of the proposition. See, also, Mazet v. Pittsburg, 137 Pa. St. 548 (20 Atl. 693); Anderson v. Fuller, 51 Fla. 380 (41 South. 684, 120 Am. St. Rep. 170, 6 L. R. A. (N. S.) 1026); Missoula St. Ry. Co. v. Missoula, 47 Mont. 85 (130 Pac. 771); Ricketson v. Milwaukee, 105 Wis. 591 (81 N. W. 864, 47 L. R. A. 685); Fones Hardware Co. v. Erb, 54 Ark. 645 (17 S. W. 7, 13 L. R. A. 353); Ertle v. Leary, 114 Cal. 238 (46 Pac. 1); Huntington Co. v. Pashong, 41 Ind. App. 69 (83 N. E. 383); Packard v. Hayes, 94 Md. 233 (51 Atl. 32). It is well settled, therefore, that a previously fixed standard, to which various proposals may be referred for comparison, is an essential ingredient, where the contract is to be let to the lowest bidder.
"What, then, is the effect of departing from this rule? In Terwilliger Land Co. v. Portland, 62 Or. 101 (123 Pac. 57), Mr. Justice Bean, delivering judgment, wrote thus:
*491 “It is a well-settled general rule that all contracts in which the public is interested, which tend to prevent the competition required by statute, are void”— citing authorities.
In that case the prevention of competition rested in the requirement of the city that a particular kind of pavement should be laid, the right to lay it being then the exclusive property of a certain concern which had not given permission on equal terms to other parties to use the process. The principle underlying the decision was that competition was in a degree stifled or impeded. This case has been distinguished, never overruled, but rather approved in principle by such authorities as Johns v. Pendleton, 66 Or. 182 (133 Pac. 817, 134 Pac.. 312, Ann. Cas. 1915B, 454, 46 L. R. A. (N. S.) 990), where it appeared that the process of paving, although patented or copyrighted, was nevertheless placed at the disposal of all bidders on equal terms, thus giving each of them an even start in the contest. In the instant case, under the call for bids embodied in the second published notice, each would-be contractor pursued his own course "without conflict with others. There was no competition. Although the computed prices differed in amount, yet that is not the sole element of the contract. The nature and quality of the pavement to be laid vitally affect the question, giving sanction to the rule that the terms of the contract upon which bidding will be required must be specified with reasonable certainty in advance. The question of the sufficiency as to precision of the plans and specifications is not here involved. It is an instance of the total absence of authoritative plans and specifications. Neither is it of any avail, as expressed in the findings, that the pavement actually laid complied substantially with one
The judgment of the Circuit Court was not the legitimate conclusion from the findings of fact, and hence it must be reversed. Reversed.
Rehearing
On Rehearing.
(199 Pac. 605.)
Former Opinion Sustained.
In Banc.
This is an action by the plaintiff as a contractor against the defendant, a municipal corporation, to recover upon an alleged breach of the duty of the city to provide a fund to pay for the improvement of Front Street from its town limit on the north bound
Former Opinion Sustained on Rehearing.
For respondent there was a brief over the name of Messrs. Wood, Montague & Matthiessen, with oral arguments by Mr. H. M. Esterly and Mr. B. W. Montague.
Section 35 of the charter provides:
“The council has power, and is authorized whenever it deems it expedient, to alter or establish the grade and to improve any street, or alley, or parts thereof, now or hereafter laid out or established within the corporate limits of the town. The power and authority to improve a street or alley includes the power or authority to improve the sidewalks or pavements, and to determine and provide for everything convenient and necessary concerning such improvement. ’ ’
This gives the town council general power to improve the streets in its own discretion and to make the town itself liable for the cost of such improvements. By Section 36, the “Council has the further power and authority to make the improvements named in said section at the cost and expense of the property adjacent to the said improvement.” This required that the ordinance shall be read at two regular meetings and the posting of three notices thereof in public places. Section 37 says, “the Council must provide by ordinance for the. establishment of the grade, for the determination of the cost of the improvement, and the share which each block, lot, or parcel of real property abutting upon or adjacent thereto shall pay.” It also provides for the levying and collecting of the assessments and making them a
Under the charter there are two different methods for the making of street improvements, one under Section 35, which gives general power to the council and the cost of which is a claim against the city itself, the other under Section 36 et seq. under which the council has only a special power and the cost of the improvement is a charge or lien on the property only of the abutting owners. The petition of the abutting property owners to improve and the subsequent proceedings leading up to and the making of the contract are founded upon the special powers of
“This is an action for negligence. That is settled by the pleadings and by the election of the plaintiff at*499 the inception of the trial. Since this action is one for negligence on the part of the defendant for failing to comply with its contract, it of course follows that in order for the plaintiff to recover it must show that there was a valid contract between the plaintiff and the defendant.”
In their brief on rehearing respondent’s counsel says :
“The court will remember that this is an action by the contractor, plaintiff below, against the City of Milwaukie, to recover for a'breach of the duty cast upon the city by law to provide- a fund to pay for the improvement of a street, * * .”
Under the first subdivision of points and authorities, respondent says:
“When a city has general power to contract for improvements, the law raises an inescapable obligation to pay the contractor for work contracted for and properly done, which comes within that power. If it undertakes to make the improvement under the local assessment plan and fails to make a good assessment, that very failure is a wrong for which the contractor may recover from the city, ex delicto. Subd. 13, § 22, Milwaukie Charter, p. 51, Abstract, § 35, Milwaukie Charter, p. 51, Abstract; North Pacific Lumber & M. Co. v. East Portland, 14 Or. 3 [12 Pac. 4]; Portland Lumber & M. Co. v. East Portland, 18 Or. 21 [22 Pac. 536, 6 L. R. A. 290]; Commercial Nat. Bank v. Portland, 24 Or. 188 [33 Pac. 532, 41 Am. St. Rep. 854]; Little v. City of Portland, 26 Or. 235 [37 Pac. 911]; Jones v. City of Portland, 35 Or. 512 [58 Pac. 657]; O’Neil v. City of Portland, 59 Or. 84 [113 Pac. 655]; Carruthers v. Astoria, 72 Or. 505 [143 Pac. 899, 1106]; Dennis v. Willamina, 80 Or. 486 [157 Pac. 799]; Morris v. Sheridan, 86 Or. 224 [167 Pac. 593].”
Under point 2, a number of cases are cited from other jurisdictions in line with the Oregon decisions. Section 80 of the charter provides:.
*500 “And the said contractor shall not require nor compel Milwaukie by any legal process or otherwise to pay the same out of any fund, except in cases where for any reason such assessment shall be invalid.’*
The contract provides:
“But that the party of the first part shall not nor shall any of the officers be required to pay any of said sums from any other fund than the special fund so raised for such improvement, except in the event that if for any reason the party of the first part, shall fail, neglect, or refuse to make or levy a valid assessment against said real property or any part thereof abutting upon the part of said street to be so improved or benefited by said improvement.”
The plaintiff bases its right to recover upon these provisions in the charter and contract and in legal effect contends that Section 80 of the town charter should be read into and made a part of Section 35. It also contends that:
“The letting of this contract strictly followed the provisions of the charter for the improvement of the streets at the abutters’ expense.”
The contract was either let under the general powers of the council as prescribed in Section 35 or under the special powers as defined in Section 36. If the contract “strictly followed the provisions of the charter for the improvement of the streets at the abutters’ expense” as respondent contends, it was the exercise by the council of the special power conferred upon it under Section 36 and not of the general power defined in Section 35. It is admitted that the proceedings were initiated upon the petition of abutting property owners and that all of the special proceedings of the charter were complied with up to and including the point when all bids were rejected by the
“That the payment by the party of the first part for the performance of this contract shall be made from a special fund created for that purpose pursuant to terms and provisions of the charter of said Town pertaining to the construction of street improvements and for the assessment of the cost thereof against the real property benefited and for the collection of said fund, but that the party of the first part shall not nor shall any of the officers be required to pay any of said sums from any other fund than the special fund so raised for such improvement, etc.”
The letting of the contract was followed by a completion of the work and the city undertook to and did levy an assessment upon the property of the abutting property owners for the purpose of creating a fund to pay the plaintiff the full amount of his contract.
The contract was made on July 18, 1913. The price was $44,051.60. The complaint alleges that the defendant duly issued to the plaintiff its certain warrants drawn upon its treasurer amounting to
“It will he observed that though the improvements were local, there is nothing in the contract to show that it was in the minds of the contracting parties at the time the same was entered into that a special and local tax was to be resorted to in order to raise the fund from which the warrants were to be paid. * * Had the contract contained a stipulation that the respondent was to be paid out of a fund arising from the tax collected from the owners of the property abutting the street to be improved, he would have no right to look to any other fund for payment of his warrants.”
Hawthorne v. East Portland, 13 Or. 271 (10 Pac. 342), was a suit by a property owner to enjoin the sale of certain lots for the payment of a street assessment lien and it was there held that:
“A power conferred upon a municipal corporation to improve the streets and tax the cost thereof upon the adjacent property is a special and limited power, which can be exercised only by a strict observance of every requirement of the act confirming it.”
Portland Lumbering & Mfg. Co. v. City of East Portland, 18 Or. 21 (22 Pac. 536, 6 L. R. A. 290), was an action by the contractor against the city to recover “the agreed price and value of certain materials furnished by the plaintiff for the defendant and used in the improvement of one of its streets by the direction of its common council.” The power of the city to contract was not involved. Commercial National Bank v. City of Portland, 24 Or. 188 (33 Pac. 532, 41 Am. St. Rep. 854), squarely holds that where a city makes a contract for a street improvement to
“Where the expense of improving a street in a city is to be paid from a special fund to be raised by an assessment on the abutting property, the failure of the municipality to comply with any of the requirements of the charter essential to supply such fund, or any unreasonable delay in collecting the money to pay for such improvement gives the contractor a right of action ex delicto against the city for damages, notwithstanding a provision in the contract that he shall look for payment to such special fund only, and that he will not require the municipality to pay for the same out of any other fund.” Commercial Nat. Bank v. City of Portland, 24 Or. 188 (33 Pac. 532, 41 Am. St. Rep. 854), followed. * *
“Whatever confusion there may be in the authorities elsewhere, the holding of this court is that, where the expense of improving a street in a city is to be paid from a special fund to be raised by an assessment on the abutting property, a failure of the municipality to comply with any of the requirements of the charter essential to supply such fund * * or any unreasonable delay in enforcing such provisions or collecting and paying over the money * * gives the contractor a right of action ex delicto against the corporation for damages.”
Former, Opinion Sustained on Behearing. Petition eor Further Consideration Denied.
