Williams v. City of Topeka , 85 Kan. 857 ( 1911 )

The opinion of the court was delivered by

Benson, J.:

Two questions are presented: (1) What authority is vested in the mayor and commissioners concerning paving contracts? and (2) Was this authority so exercised as to warrant the interposition of a court of equity to prevent the performance of the contract by the Kaw Paving Company?

The statute relating to this subject, after specifying-the preliminary steps to be taken, provides that:

' “The mayor and council shall let the work by contract to the lowest responsible bidder, if there be any such whose bid does not exceed the estimate. If. mu responsible person shall propose to enter into the contract at a price not exceeding the estimated cost, all bids shall be rejected and the same proceeding as before repeated, until some responsible person by sealed proposal shall offer to contract for the work at a price not exceeding the estimated cost.” (Laws 1909, ch. 68, § 1, Gen. Stat. 1909, § 1017.)

The purpose of this provision is to insure competition in letting contracts for such improvements, to protect the taxpayers and the public. (Surety Co. v. Brick Co., 73 Kan. 196, 84 Pac. 1034.) A contract made in violation of its requirements would be illegal (2 Dillon, Munic.Corp., 5th ed., §§ 801, 811; 20 A. & E. Encycl. of L. 1165), and such requirements are generally held to be mandatory (28 Cyc. 1031; Inge et al. v. Board of Public Works of Mobile, 135 Ala. 187, 33 South. 678, 93 Am. St. Rep. 20; McBrian v. Grand Rapids, 56 Mich. 95, 22 N. W. 206; McGovern v. Board of Public Works, 57 N. J. Law, 580, 31 Atl. 613; People ex rel. Coughlin v. Gleason, 121 N. Y. 631, 125 N. E. 4; Chippewa Bridge Co. v. Durand, 122 Wis. 85, 99 N. W. 603, 106 Am. St. Rep. 931). The vital question, however, arises upon the meaning of the expression “the lowest responsible bidder.” The appellant contends that because the company was financially responsible, the specifications certain and definite as to the work and details, supervision reserved to the city, and a good bond required, the Cleveland company must be regarded as a responsible bidder, that is to say, able to respond to or to answer in accordance to what is demanded, and that pecuniary responsibility only is to be considered. On the other hand it is insisted that a much wider meaning should be given to the word “responsible,” and that as used in this statute it includes skill, judgment and integrity. This view is amply sustained by the authorities. Judge Dillon says:

“In determining who is the lowest responsible bidder, or the lowest and best bidder, the duty of the board or officer is not merely ministerial, but partakes of a judicial character requiring the exercise of discretion and judgment. Consideration must be given not only to the pecuniary ability of the bidders to perform the contract, but also to the skill, ability, and integrity necessary to do faithful, conscientious work, and to fulfill the terms of the contract.” (2.Dillon, Munic. Corp., 5th ed., § 811.)

In section'268 of volume 1 of Abbott on Municipal Corporations it is said:

“As stated repeatedly in cases passing upon this point, the duty imposed to award a contract to the lowest responsible bidder involves a determination of other questions than financial; the business judgment and capacity, skill, responsibility and reputation of the various bidders and the quality of the materials proposed to be supplied are all to be taken into consideration.”

And in section 636 of volume 1 of the third edition of Elliott on Roads and Streets, the rule is stated thus:

“In determining who is the best or lowest responsible bidder, the skill, ability and integrity of the bidders may be taken into consideration as well as the amounts of their bids and their pecuniary ability.”

Citations of adjudicated cases are given by these authors under the sections quoted and it is not necessary to repeat them here. Not only is this rule supported by a multitude of precedents, but it rests in reason. The public interests are much better promoted by faithful performance than by repairs upon, or indemnity for, defective public work. In the nature of things such a remedy will often be inadequate, vex.atious and expensive. Prevention is vastly better than cure, at least the cure to be wrought through litigation. As stated in the opinion in Commonwealth v. Mitchell, 82 Pa. St. 343:

“A dishonest contractor may impose work upon the the city, in spite of the utmost caution of the superintending engineer, apparently good, and even capable of bearing its duty for a time, which in the end may prove to be a total failure and worse .than useless. Granted, that from such a contractor pecuniary damages may be recovered by an action at law; this is, at best but a last resort, that often produces more vexation than profit — a mere patch upon a bad job; an exceedingly meager compensation, at best, for the delay and incalculable damage resulting to a great city from the want of a competent supply of water. The city requires honest work, not lawsuits.” (p. 349.)

While the contract in that case related to waterworks the principle applies to street improvements, although the defects might not be so disastrous. We conclude that the word “responsible” in the phrase “lowest responsible bidder” was used by the legislature in the sense in which it had long been interpreted by the courts and text-writers, and must be held to imply skill, judgment and integrity necessary to the faithful performance of the contract, as well as sufficient financial resources and ability. (Dillon on Munic. Corp., supra; State ex rel. Eaves v. Rickards, 16 Mont. 145, 40 Pac. 210, 50 Am. St. Rep. 476, and note.)

The next inquiry is how this responsibility is to be determined. Here again the authorities speak with practically one voice. The governing body of the city, the mayor and council, or commissioners, as the case may be, must determine the fact, and such determination can not be set aside unless the action of the tribunal is arbitrary, oppressive or fraudulent. (High’s Extraordinary Legal Rem. § 92; The State ex rel. v. McGrath, 91 Mo. 386, 3 S. W. 846; Douglass v. Commonwealth, 108 Pa. St. 559; Madison v. Harbor Board of Baltimore City et al., 76 Md. 395, 25 Atl. 337; Meffert v. Medical Board, 66 Kan. 710, 72 Pac. 247; Dever v. Humphrey, 68 Kan. 759, 75 Pac. 1037.) The determination of the question who is the lowest responsible bidder does not rest in the exercise of an arbitrary and unlimited discretion, but upon a bona fide judgment based upon facts tending to support the determination. (McGovern v. Board of Public Works, 57 N. J. Law, 580, 31 Atl. 613; Bunker v. Hutchinson, 74 Kan. 651, 87 Pac. 884; 2 Dillon, Muric. Corp., 5th ed., § 811.) The statute will .not be so interpreted as to' afford a cover for favoritism. The city authorities are required to act fairly and honestly, upon reasonable information, but when they have so acted their decision can not be overthrown by the court.

. “The duty of examining the proposals, determining the responsibility and awarding the contract is judicial in its nature and character, and the awarding the contract is a judicial act, which is not within the province of the courts to control by mandamus or mandatory injunction” (Johnson v. Sanitary District, 163 Ill. 285, 287, 45 N. E. 213.)

This subject is treated in notes in 26 L. R. A. 710h and 50 Am. St. Rep. 489.

The remaining questions are whether the facts before the mayor and commissioners tended to support their conclusion that the Cleveland company was not the lowest responsible bidder, and whether they acted in good faith in awarding the contract to another. They made such inquiries as their own knowledge suggested and by this means learned of the situation at Wellington and Wichita, and seeking for further information suggested' by these inquiries, they learned of the exposures at Columbus, Ohio, directly ■ affecting the integrity of the company and its officers in the same line of business to which its bid related. This information was presented to the attorney of the company who with its president appeared before the mayor and commissioners and read telegrams from many cities where the company had been awarded contracts, and were given such hearing and made such explanation as they desired. The statements made by them substantially confirmed the information already gained concerning the affair at Columbus. The fact that city officers solicited or demanded the bribe only showed which party took the initiative in that matter. It is argued that four .years of honest and faithful work in many places since that occurrence and the good reputation of its president proved-the worthiness and reliability of the company at the time of the hearing, and hence no weight should have been given to that unfortunate incident. Without further comment upon the facts, it is sufficient to say that the incident referred to challenged careful attention, and raised the inquiry whether the integrity of the company could be relied upon for conscientious and faithful work. No request was made for postponement or for another hearing, and further investigation could not change the situation as stated by its representatives.

In view of the information so obtained and other information before the commissioners, and the finding ■of the district court that the award to the Kaw Paving Company was made in good faith, the judgment must be affirmed.