147 P. 382 | Or. | 1915
delivered the opinion of the court.
The validity of the proceedings was challenged on the ground that notices had not been posted at the termini of the proposed improvement; but the evidence
The first step to be taken in the discussion is to ascertain the provisions of such part of the charter as
‘ ‘ The council, whenever it may deem it expedient, is hereby authorized and empowered to order the whole or any part of the streets of the city to be improved; to determine the character, kind, and extent of such improvement; to levy and collect an assessment upon all lots and parcels of land specially benefited by such improvements; to defray the whole or any portion of the cost and expense thereof, and to determine what lands are specially benefited by such improvement, and the amount to which each parcel or tract of land is benefited.”
Section 375 directs:
“Whenever the council shall deem it expedient or necessary to improve any street, or any part thereof, it shall require from the city engineer plans and specifications for an appropriate improvement, and estimates of the work to be done and the probable cost thereof; and the city engineer shall file such plans, specifications and estimates in the office of the auditor. * * If the council shall find such plans, specifications, and estimates to be satisfactory, it shall approve the same. * * The council shall, by resolution, declare its purpose of making said improvements, describing the same. * * ”
Provisions are made for the publication and posting of notices and the filing of remonstrances, and then Section 378, specifies that, unless a sufficient remonstrance is filed—
“the council shall be deemed to have acquired jurisdiction to order the improvement to be made, and the council may thereafter, and within three months from the date of the final publication of its previous resolution, by ordinance, provide for making said improvement, which shall conform in all particulars to the plans and specifications previously adopted.”
“Upon the approval of said ordinance by the mayor, or if the same shall become valid without his approval, the auditor shall present to the executive board at its next regular meeting, a copy of said ordinance and the, estimates, plans, and specifications, previously prepared by the city engineer and adopted by the council. Thereafter, the said executive board, without delay, shall give notice by publication, for not less than five successive days in the city official newspaper, inviting proposals for making said improvement. The executive board shall have the power to award the contract or contracts for said improvement. * * 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 said board shall have the right to reject any or all proposals received. * * ”
The plaintiffs argue that the mandate of the charter that “such contract or contracts shall be let to the lowest responsible bidder” precludes the council from selecting a patented pavement, before calling for bids, and specifying such pavement as the only kind that will be accepted; that to select only one kind of pavement is to throttle competition if the kind chosen is patented; that in the very nature of things there can only be one bidder, and therefore no “lowest responsible bidder, ” if a patented improvement is alone made acceptable, since no person except the patentee is empowered to bid; and that the closing of the doors to competition has the effect of creating a monopoly which of itself is sufficient to render the contract void.
The position taken by the defendants is that by the terms of the charter the council is expressly empowered to determine the character and kind of improvement; that the power to determine the kind of
The'question of the validity of previously selecting a designated patented pavement and making it the only kind upon which bids will be received or considered has presented a broad field for judicial debate; and from the discussion have come two widely divergent rules. One view is that a municipality is without authority to specify any patented pavement as the only one to be used in a street improvement because to do so would be completely to eliminate competition, foster monopoly, and promote favoritism, dishonesty and graft. This doctrine was announced by the Supreme Court of "Wisconsin in Dean v. Charlton, 23 Wis. 590 (99 Am. Dec. 205), wherein that court says:
“But another objection is taken, which goes to the foundation of the whole proceeding; and the conclusion to which a majority of the court have come upon that will preclude the necessity of examining any of the other questions. This objection is based upon the provisions of the charter requiring all work to be let by contract to the lowest bidder, and the fact that the right to lay the Nicolson pavement is a patented right, and was owned for the State of Wisconsin by one firm in the City of Milwaukee. It is said that the charter authorizes a contract only for such work as is open to competition, and that this work was not open to competition, because nobody had any legal right to do it except the one firm that owned the patent. Upon these facts alone the objection seems to me unanswerable. And nothing seems to be necessary beyond the simple statement of the requirements of*458 the charter as to the mode of letting work, and the fact that this right was a monopoly, to show that the charter is inapplicable to it, and that a contract for this work would be in violation of the necessary implication from its provisions. ’ ’
The Wisconsin rule has been adhered to in the following cases: State v. Elizabeth, 35 N. J. Law, 351; Nicolson Pavement Co. v. Painter, 35 Cal. 699; Fishburn v. Chicago, 171 Ill. 338 (49 N. E. 532, 63 Am. St. Rep. 236, 39 L. R. A. 482); Burgess v. Jefferson, 21 La. Ann. 143; Fineran v. Central Bitulithic Paving Co., 116 Ky. 495 (76 S. W. 415, 3 Ann. Cas. 741); Monaghan v. Indianapolis (Ind. App.), 75 N. E. 46. Under the rule commonly known as the Wisconsin doctrine a city cannot in all cases avail itself of a patented pavement unless different kinds of pavement are permitted to compete; for, if a patented pavement be the only one of the kind, the very fact that it is such deprives the city of the right to use the patented pavement if the specifications do not afford opportunity for competition between different kinds of pavement. If, however, the specifications are so framed as to permit different kinds to compete with each other, whether, patented or nonpatented, genuine competition follows, with all the accompanying benefits to the taxpayers.. The case of Fones Hardware Co. v. Erb, 54 Ark. 645 (17 S. W. 7, 13 L. R. A. 353), furnishes an interesting discussion of the question of whether or not competition between different kinds of improvement is competition in fact.
The opposite doctrine proceeds upon the theory that, if a city is denied the right to specify a patented pavement, then it may ofttimes happen that only inferior methods will be available, and therefore the taxpayers, much to their detriment, will be deprived
‘ ‘ The doctrine of the complainant leads to this conclusion: That whenever, from the nature of the case, there can be no competition, the city can make no contract, however important or necessary for the interest of the city; since contracts, except by public letting, are forbidden by the express terms of the statute, and those by public letting are forbidden by an implication which is equally imperative. And, if applied to this case, however much this mode of paving may exceed all others in utility, it cannot be adopted in the City of Detroit, or in any other city with the like provision in its charter, even although the proprietors of the patent might be willing to lay it on terms more advantageous to the city than those on which pavement of less value could be procured. To support this conclusion, we must import into the statute a condition which we must suppose to pervade its spirit, but which is not expressed by its words. The power which the charter gives to the common council to cause the streets to be paved is conferred by another section in very ample terms, the sole condition imposed upon it being the public letting of the contract to the lowest bidder. The courts, I think, should be very cautious about importing new terms into a statute in order to make it express a meaning which its words do not convey, and they ought, at least, to first make sure that they are not changing the legislative intent, and giving the statute an operation that the legislature never designed, and, perhaps, would never have assented to.”
“It is assumed that this court has committed itself to the doctrine contended for by plaintiff by its decision in Terwilliger Land Co. v. Portland, 62 Or. 101 (123 Pac. 57); but such is not the case. In that case bids were advertised for improving a street with ‘Hassam pavement,’ an unpatented compound. The Hassam Paving Company had copyrighted the trade name, but anybody could use the same ingredients in the same proportions and produce exactly the same pavement without any infringement on the copyright of the Hassam Company; but, as the bids called for Hassam pavement, nobody could submit a bid for such pavement eo nomine without infringing upon a copyright. ’ ’
The facts characterizing the case of Terwilliger Land Co. v. Portland, 62 Or. 101 (123 Pac. 57), are, in a marked degree, analogous to the vitrified brick cases, examples of which are to be found in Smith v. Syracuse Imp. Co., 161 N. Y. 484 (55 N. E. 1077), National Surety Co. v. Kansas City Hydraulic Press Brick Co., 73 Kan. 196, (84 Pac. 1034), Schoenberg v. Field, 95 Mo. App. 241 (68 S. W. 945), and Larned v. City of Syracuse, 17 App. Div. 19 (44 N. Y. Supp. 857). In the cases just mentioned none of the brick was patented, and, although vitrified brick, as made by other firms or as branded by other persons, equally as. good
‘ ‘ The material here specified was not a patented material or held in monopoly, and no reason existed why the restriction to material which conld be furnished by but one party should have been made.”
Quite a different case is presented if the pavement which is chosen be protected by letters patent. Generally, the very fact that the pavement is patented prevents a duplication in all particulars. No one has the right to lay the identical pavement covered by the letters patent, except the patentee, because the sole purpose of granting letters patent is to confer an exclusive right, and therefore the cases involving the selection of a nonpatented pavement do not furnish a parallel to those where a patented improvement is called for. This court has not yet and is not now called upon to determine, and therefore we do not now decide, what the effect wonld be if a municipality should select a patented improvement and make that alone acceptable, where the bidding was confined to the patentee or his sole licensee; bnt we only direct attention to the fact that the case of Terwilliger Land Co. v. Portland, 62 Or. 101 (123 Pac. 57), does not go to the extent contended for by the plaintiffs herein, and that the remark quoted from Johns v. Pendleton was made advisedly.
Where the patentee offers to all bidders the right to use his patent upon the payment of a reasonable royalty, the courts are practically unanimous in the opinion that a contract made under such circumstances is valid, and not objectionable; but the same degree of harmony does not exist in cases where something more than the right to use the patent is involved, as where the offer includes furnishing part of the material which enters into the patented improvement. By its decision in Johns v. Pendleton, 66 Or. 183 (133 Pac. 817, 134 Pac. 312, Ann. Cas. 1915B, 454, 46 L. R. A. (N. S.) 990), this court has committed itself to the doctrine that a contract for a street improvement is not necessarily void where to all persons desiring to bid the patentee offers the right to use the patent, and offers to furnish the necessary roadway mixtures for the wearing surface, bituminous flush coating, and an expert to advise in the building of the pavement. Street improvements involving offers like the one considered
“Here, unlike in the case of Monaghan v. City of Indianapolis (Ind. App.), 75 N. E. 46, the patentee has no power, directly or indirectly, to control the award of the contract, for all bidders in the state are placed on equal terms and no restriction whatever is placed on free competition for the contract. True, the sum of 25 cents a square yard for the use of the patented process must be added to the cost of construction, but it is conceded that the use of the process is reasonably worth the added price, and therefore appellant cannot be injured. But appellant contends that the royalty of 25 cents a square yard enters into the cost of construction, and that that part of the cost was not submitted to any competition whatever, and hence, in part, the cost of construction cannot be submitted to free competition. Of course, it would not be possible for competition to exist for a license to use a patented process, for the patentee under the very terms of his letters has the exclusive right to make, use, and vend the thing patented : 30 Cyc. 815. Consequently, the logical result of appellant’s contention would be that no patented process could, under any circumstances, be used in constructing a pavement under the provisions of this statute. Such contention cannot prevail. In the case of Monaghan v. City of Indianapolis (Ind. App.), 75 N. E. 46, the court expressly held that the rule there adopted did not exclude the use of a patented pavement, but did exclude the use where the patentee so held the right to use the process as to enable him to designate the contractor. There is neither reason nor authority for a rule wholly excluding the use of patented processes in constructing pavements.”
The Supreme Court of Wisconsin has held that an offer of the patentee for a stipulated sum to give his services as superintendent and the right to construct
“But we think the law is complied with, in the absence of actual fraud or deception, when specifications are submitted to competitive bidders, although some article is specified which, by reason of the patent on it, is in the hands or under the control of a single bidder, when the contract for performing the work and furnishing the material is let to the lowest and best bidder with the understanding that the patentee would allow the use of his patent and superintend the construction of the work for whoever secured the contract.”
Our attention has not been directed to any case holding that a contract was impaired by an offer which only imposed the payment of a reasonable royalty for the right to use a patent. Offers including both a license to use the patent and what is equivalent to the personal services of the patentee have been approved in California and Wisconsin, while in the Oklahoma case the use of machinery constituted an additional
Upon the general question of whether a pavement may be previously selected and alone made acceptable the authorities are about equally divided, both as to numbers and eminence. The courts are practically agreed that an offer embracing only the use of a patent and the payment of a reasonable royalty therefor is not odious, because the evils accompanying a monopoly are reduced to the smallest possible minimum. Offers including both the use of a patent and a part of the material entering into the improvement have caused a divergence of judicial opinion; hut the decided weight of authority is in accord with Johns v. Pendleton, 66 Or. 182 (133 Pac. 817), and the instant case, if for no other reason, is governed by the principle of stare decisis as we find it in Johns v. Pendleton:
The evidence in the case for decision does not disclose any fraud, collusion or unfair dealing on the part of the officers of the municipality.
The -decree of the trial court is therefore affirmed.
Affirmed.