Reno Water, Land & Light Co. v. Osburn

The facts sufficiently appear in the opinion. The city council of the city of Reno submitted the question to the electors whether or not the city should borrow the sum of $150,000 for the purpose of procuring water and the erection of water works for the city, and at the same time submitted the question whether or not the city should borrow the sum of $20,000 for the purpose of establishing an electric light plant for lighting the streets and houses of the city. Both questions having been answered in the affirmative, the council caused the following notice to be published: "Bids Wanted. Notice is hereby given that bids will be received until 8 o'clock p. m. of June 13th, 1898, for the purchase of Reno water works bonds in the sum of $130,000, or any portion thereof not less than $500; also, for the purchase of Reno electric light bonds in the sum of twenty thousand ($20,000) dollars, or any portion thereof not less than the sum of $500; also, written proposals, with plans and specifications, to construct a water system for the city of Reno, to be paid for with bonds of the city of Reno, at not less than their par value; also, for written proposals, with plans and specifications, to construct and establish an electric light plant for the city of Reno, to be paid for with the bonds of the city of Reno at not less than their par value. All bids or proposals should be sealed, so indorsed upon the envelope as to indicate the character of the contents, and directed to ``F. B. Porter, City Clerk, Reno, Nevada.' R. S. Osburn, President City Council. F. B. Porter, City Clerk. Reno, Nevada, May 9th, 1898."

Bids and proposals, with plans and specifications, were received under the notice; and the council, believing that the bid of the firm of Schaw, Ingram Batcher Co. was the best, were about to enter into a contract with that firm for a water supply and water works, when this suit was commenced for the purpose of enjoining defendants therefrom. Upon the trial a decree was entered perpetually restraining defendants from entering into the proposed contract, and also with the Ft. Wayne Electric Corporation.

One of the questions presented by the appeal is whether or not it was the duty of the council to have adopted plans and specifications for a water system before receiving bids. Section 16 of the charter provides that all laws not inconsistent shall remain in full force until otherwise provided. It is claimed under this provision, that an act passed February 19, 1867 (Stats. 1867, p. 59), requiring boards of county commissioners in letting contracts amounting to $500, to advertise and let them to the lowest responsible bidder, and, when plans and specifications are to constitute part of such contract, it shall be stated in the notice where the same may be seen, is applicable to the contract in this case, and that it was the duty of the council, in obedience to this law, to have adopted plans and specifications, and thereafter to have advertised for proposals.

The law of 1867 contemplates competitive bidding, and, to secure that end, plans and specifications must be adopted before bids are invited. By the terms of that statute, contracts must be awarded to the lowest responsible bidder. By section 35 of the charter it is provided that, if the council is authorized to issue bonds for water and light purposes, they "shall proceed to publish such fact and invite written proposals with plans and specifications to construct such water system, and the person or corporation offering to provide the best permanent system of water supply for the least number or amount of said bonds, shall be deemed the lowest or best bidder. * * *" These provisions were framed upon a different theory than those governing the statute of 1867. Bidders are required to furnish their own plans and specifications. This requirement can serve no useful purpose, and would not have been inserted in the charter if contracts were to be awarded upon plans and specifications previously determined by the council. Under provisions requiring proposals to be awarded to the lowest responsible bidder, the board or officer charged with the award has no discretion, except as to the responsibility of the bidder; but the provision of the charter that the bidder offering to furnish the best system of water supply for the least number of bonds shall be deemed the lowest or best bidder, commits to the council a discretionary power to determine which system is the best, and introduces an element inconsistent with competitive bidding upon plans and specifications previously adopted. In order to determine the best system, comparisons must be made with other systems; but, if all the bids were restricted to one system, it would be impossible for the council to reach any conclusion.

We think that the council was not required to adopt plans and specifications before advertising for bids, and this provision of the law of 1867, in this respect, is inconsistent with the charter.

After the submission of the original proposal, the council, upon consultation with the firm of Schaw, Ingram, Batcher Co., proposed that the bid of the firm should be modified by omitting the construction of a reservoir, and pipes leading to and from it, and that in consideration thereof the sum of $6,000 should be deducted from the contract price. It was shown that the omission would be to the advantage of the city in several respects. The firm consented to the modification. It was the duty of the council, as agent of the city, to protect and advance its interests. The judgment of the council was that the modification would save the city an unnecessary expense of about $6,000, and improve the proposed water system. Upon these facts, no one can complain of the action of the council.

In the case of the proposed contract with the Ft. Wayne Electric Corporation, it is shown by the pleadings that the modifications are unimportant.

A motion has been made by respondent to strike from the record an exhibit containing the original bid of Schaw, Ingram, Batcher Co., filed with the clerk of the city council June 13, 1898, and also the findings of the court, upon the ground that they had not been identified by the trial judge, by his indorsement, as having been read or referred to upon the hearing of the motion for new trial. Aside from the exhibit itself, the testimony of Mr. Osburn satisfactorily shows the difference between the original bid and its modification by the firm and council. The evidence contained in the exhibits is therefore merely cumulative, but the exhibit, failing of identification, should be stricken out.

The findings mentioned in respondent's notice are the written opinion of the judge mentioned in section 340 of the civil practice act, and are properly in the record. The formal findings referred to in section 182 are different from the written opinion mentioned in section 340. (Corbett v. Job, 5 Nev. 201.)

Judgment reversed.