Neacy v. City of Milwaukee

The following opinion was filed March 9, 1920:

Owen, J.

It must be considered as settled by Neacy v. Milwaukee, 151 Wis. 504, 139 N. W. 409 (which was not modified by the case of Wis. T., L., H. & P. Co. v. Menasha, 157 Wis. 1, 145 N. W. 231, as counsel seems to think), that at the time of that decision the city had lawful authority to construct a municipal lighting plant, and if it has not such authority at this time it is because its legal rights in the premises have been forfeited since that decision.

It is the contention of appеllant’s attorney that the city has abandoned the building of the plant, or that, if it has not abandoned the project entirely, it has deviated in its present plans from the original proposition to such an extent as to be tantamount to an abandonment of it' The record discloses that the matter was taken up with' promptness by the city council immediately after the former Neacy Case had been dismissed, and that from that time down to the commencement of this action the council was rather attentive to the project. An entire year was givеn up to the making of a survey with a view of determining the needs and necessities of the city and the best method to pursue in the construction of the plant. There is no statute of limitations the running of which will bar the right of the city to continue further with the project. The actions of the common council referred to in the statement of facts certainly negative the idea that the project has been abandoned by the city. Neither do we see anything to the argument that the city has forfeited its rights to build the lighting plant because its original plans mаy have been modified or changed. Our conclusipn is that the rights of the city, on the facts presented by this record, are controlled by the decision in the former Neacy Case, and that the judgment of the trial court upon ‍​‌​‌​‌​‌‌‌​‌‌​​‌‌​​​​‌‌‌‌​‌‌​‌‌‌‌​​​‌​‌‌​‌​​‌‌​‌‍this branch of the case should be affirmed.

We find more difficulty in agreeing with the disposition made by the trial court of the first cause of action set forth in the complaint. It seems that in obedience to certain ordinances of the city of Milwaukee the commissioner of public works prescribed specifications and called for bids for thе furnishing of a quantity of concrete posts to be used as a part of the construction of the municipal lighting plant; that in response to the advertisement a number of bids were received. Upon the coming in and opening of those bids, the further power and authority оf the commissioner was as is prescribed in sec. 10, ch. Y, of the city charter (ch. 144, Laws 1875; ch. 324, Laws 1882; and ch. 388, Laws 1889). That section, so far as material here, provides;

“All contracts shall be awarded to the lowest bidder, who shall have complied with the foregoing requisitions. . . . And prоvided, further, that whenever the lowest bid for any work to be let by said commissioner, shall appear to said commissioner to be unreasonably high, the said commissioner is authorized to reject all bids therefor, and to relet the work anew, and whenever any bidder shall be, in the judgment of said commissioner, incompetent, or otherwise unreliable for the performance of the work for which he bids, the said commissioner shall report to the common council of said city a schedule of all the bids for such work, with a recommendation tо accept the bid of the lowest competent and reliable bidder for such work, with his reasons for such recommendation, and thereupon it shall be lawful for the said'common council to direct said commissioner either to let the work to such lowest comрetent and reliable bidder, or to relet the same anew.”

The only discretion vested in the commissioner is to reject all bids when the lowest bid shall appear to said commissioner to be unreasonably high. Whenever any bidder shall be, in the judgment of the commissioner, incompetent or otherwise unreliable for the performance of the work for which he bids, he must report the matter to the common council with a recommendation to accept the bid of the lowest competent and reliable bidder for the work, and thereupon it shall be lawful for the common council to direct said commissioner either to let the work to such lowest competent and reliable bidder or to relet the same anew. In this instance the commissioner reported the matter to the common сouncil with a recommendation that the work be let to the one he considered the lowest reliable bidder, but who was not in fact the lowest bidder. He did not in the first instance ‍​‌​‌​‌​‌‌‌​‌‌​​‌‌​​​​‌‌‌‌​‌‌​‌‌‌‌​​​‌​‌‌​‌​​‌‌​‌‍exercise the discretion vested in him of rejecting all bids because the lowest bid was unreasonаbly high, and his action in recommending that the work be let to a higher bidder is conclusive that he did not then consider the lowest bid unreasonably high. It was only when the common council refused to authorize him to let the work to the bidder he recommended that he assumed to reject all bids. We have been referred to no provision of the city charter conferring authority upon the commissioner to reject all bids under such circumstances. His power is to reject bids only when the lowest bid is unreasonably high in his judgment. That such was not the case here is evidenced by the fact that he recommended that the work be let to one who was not the lowest bidder. When the matter was passed to the common council, his authority and duty in the premises terminated. The power to reject the lowest bid and award the contract to a higher bidder, if not exercised firmly, wisely, and honestly, may easily lead to favoritism and corruption, and result in improvidence which it was intended to prevent. Because of the great responsibility attending its exercise, the power was placed with the supreme governing body of the city. It was not intended that the exercise of this responsible power by the common council could be arbitrarily nullified by the commissioner of public works in the manner here attempted. His conduct was an unauthorized assumption, if not clear usurpаtion, of power. It is well settled that contracts binding a municipality can be culminated only in the manner prescribed by the charter, and municipal officers must follow the prescribed procedure step by step. Ricketson v. Milwaukee, 105 Wis. 591, 81 N. W. 864; Chippewa B. Co. v. Durand, 122 Wis. 85, 99 N. W. 603; Allen v. Milwaukee, 128 Wis. 678, 106 N. W. 1099; Cawker v. Milwaukee, 133 Wis. 35, 113 N. W. 417. When the commissioner referred the bids submitted in respоnse to the first advertisement, to the city council, his only authority was to await and execute the directions of the common council. His "re-advertisement was without authority, and the contract executed pursuant thereto was void.

We also think the contract wаs void because the posts called for by the second set of specifications are protected by patents. Sec. 23, ch. V, of the city?- charter provides:

“The said commissioner shall have power, under the authority of the common council, to mаke a contract or contracts with the patentee or his licensees or assigns, to use any patent or patented article, process, combination or work for the said city, at a stipulated sum or royalty for the use thereof. And thereupon the said commissioner shall have power to order any work, whether chargeable to the said city or to lots, parts of lots or parcels of land therein, to be done with the use of such patent or patented article, process, combination or work; аnd whenever the owner or agent of any lot, part of lot or parcel of land in said city, or other person authorized by law to do such work, shall do the same and.use any such patent or patented article, process, combination or work in doing the sаme, he shall pay to the said city the sum or royalty chargeable therefor by such patentee, his licensees or assigns, to the city ‍​‌​‌​‌​‌‌‌​‌‌​​‌‌​​​​‌‌‌‌​‌‌​‌‌‌‌​​​‌​‌‌​‌​​‌‌​‌‍under such contract, and shall be liable to suit by the said city therefor; or the amount of such sum or royalty may be charged as a special assessment upon the respective lots, parts of lots, and parcels of land in front of which such patent was so used, and collected for the use of said city, as other special taxes are collected.”

In Allen v. Milwaukee, 128 Wis. 678, 106 N. W. 1099, it was held that this provision of the сharter was intended to exclude any other method of acquiring for the city the advantages of patented rights, articles, or processes for any purpose. That the charter provision above quoted was not complied with in this instance is alleged in the сomplaint, and the contract here is void for that reason if the posts called for by the specifications are comprehended within the terms “patented article, process, combination or work,” within the meaning of this charter provision. It is concеded that the post itself is not patented, but it is alleged that a post responding to the specifications cannot be made except by the centrifugal process, and that to successfully manufacture a post under that process it is necessary to usе patented machines the patent to which as well as the machines themselves are owned exclusively by the Universal Concrete Products Company. While it may be conceded that the exact language does not include the posts here in question, as they constitute neither a “patented article, process, combination or work,” we nevertheless think that the legislative intent is very clear. These posts are protected by a patent just as effectually as though the post itself were patented. The phrase employed in the statute is sweeping, and is no doubt intended to cover any product which is not the subject of competition by reason of the protection of patents in any manner, shape, or form. From the broad and comprehensive phrase “patented article, process, combination or work,” we conclude that the legislature intended to include every situation where, by reason of the existence of patent rights, there could be no competition. We so construe the statute.

But, independent of this charter provision, the sаme conclusion is necessarily reached by the application of a rule of law well established in this state to the effect that, where a city charter requires public work to be let upon competitive bids, material which does not constitute the subject of competitive bidding cannot be used. Dean v. Charlton, 23 Wis. 590. The principle of this case was somewhat limited in Kilvington v. Superior, 83 Wis. 222, 53 N. W. 487, where it was held that the principle did not affect such general city powers as lighting streets, purchase of a fire-engine, or the destruction of garbage, etc., which are generally and broadly conferred ‍​‌​‌​‌​‌‌‌​‌‌​​‌‌​​​​‌‌‌‌​‌‌​‌‌‌‌​​​‌​‌‌​‌​​‌‌​‌‍by other сlauses of the charter as to which the requirement of competitive bidding is construed as merely regulative and not to require competitive bidding to apply where' it cannot. See, also, Allen v. Milwaukee, supra, where the decision in Kilvington v. Superior, supra, is explained. Manifestly, the situation here does not fall within the principlе of Kilvington v. Superior, because it conclusively appears that the general product of concrete posts does constitute a subject of competitive bidding. It is only the special concrete posts called for by the second set of specifications, which can be produced but by a single concern, that is not the subject of competitive bidding. It must not be thought that because, in all the cases dealing with this principle, the question arose by reason of the attempted use of a patented article, the рrinciple does not apply unless the article is patented. The underlying consideration is that any article which is not a subject of competitive bidding is obnoxious to the provisions of city charters requiring that all contracts should be let pursuant to competitive bidding. As a rule, a patented article is not the subject of competitive bidding. If, however, the article, for any other reason, is not the subject of competitive bidding, its use is just as obnoxious to charter provisions requiring competitive bidding. So, fundamentally, it makes no difference here whether or not this post is a patented article. It appears from the allegations of the complaint that it is not a subject of competitive bidding, and its use is prohibited by that provision of the city charter (sec. 10, ch. V) which provides that “all contrаcts shall be awarded to the lowest bidder.” If it be a patented article, it may be obtained for the use of the city in the manner prescribed by sec. 23, ch. V, of the charter, above quoted. If it be not a patented article, then it would seem that its use is. prohibited. But we hаve held that it is a patented article within the meaning of sec. 23, and that it may be procured for the use of the city in the manner provided therein. The provisions of sec. 23 having been ignored in the letting of the contract here under consideration, the contract is for that reason void under Allen v. Milwaukee and Cawker v. Milwaukee, supra.

While the judgment in this case must be reversed, it is not necessary that a retrial be had upon the second cause of action, so called, as the judgment of the court upon that branch of the case was proper. It will be sufficient to rеverse the judgment and remand the case with instructions to take evidence upon those allegations of the complaint which we have indicated render the contract void, if true.

. By the Court. — Judgment reversed, and cause remanded with instructions ‍​‌​‌​‌​‌‌‌​‌‌​​‌‌​​​​‌‌‌‌​‌‌​‌‌‌‌​​​‌​‌‌​‌​​‌‌​‌‍to take further evidence in accordance with this opinion.

. A motion for a rehearing was denied, with $25 costs, on May 4, 1920.

Case Details

Case Name: Neacy v. City of Milwaukee

Court Name: Wisconsin Supreme Court

Date Published: May 4, 1920

Citation: 176 N.W. 871

Court Abbreviation: Wis.