Amer. Pavement Co. v. Wagner

OPINION,

Mr. Justice Clark:

This action of assumpsit, under the statute, was brought by the American Artificial Stone Pavement Company, Limited, against Louis Wagner, to recover damages alleged to have been sustained from the failure or refusal of the defendant, as the director of the department of public works of the city of Philadelphia, to award to the company a contract for lining .a section of the East Park reservoir. The city councils having, by ordinance of December 31, 1886, appropriated $300,000 to extensions in the water department for the year 1887, the defendant, in his official capacity, on March 18, 1887, advertised for proposals on or before 12 o’clock noon of May 31, 1887, to do the work according to certain specifications furnished, the director reserving to himself, however, “ the right to accept or reject any or all bids, as he may deem best for the interests of the city.” The specifications provided for “the covering of the bottom of the south division of this reservoir, and the inside slopes of the embankment, to within twenty feet of the top, with a coating of concrete five inches in thickness, and from thence to the top of the slope, with bricks laid on edge, in cement two inches in thickness.” Several proposals were received, but none of them was accepted. The plaintiff company offered to complete the work at the rate of $2.87 per square yard for brick, and $1.23 per square yard for the concrete, amounting to $65,934.15, and was the lowest bidder.

The director of public works having rejected all the offers made, afterwards, on July 20, 1887, gave notice by advertisement that he would receive other proposals until 12 o’clock noon of August 2, 1887, according to specifications which provided for the execution of the work in the same manner as by the specifications of March 18, 1887, but which, in addition thereto, provided that, instead of lining the reservoir with conCrete to within twenty feet of the top, the entire slope might “ be lined with bricks on edge, bedded in cement,” the option to be with the department.

The plaintiff, insisting upon his right as the lowest bidder, did not bid a second time. When the last bids were received, opened, and scheduled, Lewis Grant was found to be the lowest responsible bidder, and the contract was awarded to him: the city, exercising the option, required the entire slope to be lined with bricks on edge, bedded in cement. The prices named in the plaintiff’s bid, applied to the work as it was actually performed, would have amounted to $78,493.27; whereas, the amount of Grant’s bid and the amount he received under his contract, was 159,155.58, which was a saving to the city of $19,337.74, and this is the exact sum for which the plaintiff declares, as damages, in this suit.

No fraud is charged in the plaintiff’s statement of claim, nor is there any evidence of fraud. The theory of the plaintiff’s case is that, as by the sixth section of the act of May 23, 1874, P. L. 233, all work and materials required by the city must be done and furnished “ under contract, to be given to the lowest responsible bidder,” the bidder whose bid is the lowest, and whose responsibility is not objected to, is thereby legally entitled, under the statute, to a contract accordingly, whether the bid be accepted and the contract awarded or not, and that the officer who refuses to accord this right is individually liable in damages for the loss of profits sustained thereby.

There is no averment or proof that the first bids were invited, or, when opened, were used, for any improper purpose, or that they were used corruptly to promote the interest or advantage of any personal or political friend, or to put the plaintiff at any disadvantage in the subsequent bidding; for anything that appears, the director of public works exercised the privilege reserved in good faith, acting in behalf of the city whose interests he was bound to protect. If he had accepted any one of the first bids, he was bound by law to give the contract to the “ lowest responsible bidder,” and a court of equity would have enjoined him from doing otherwise. But if, upon opening these bids, he believed them to be extravagant in amount, or the work, upon the basis of the specifications, to be unwise and against the public interest, it was his right to refuse them all, and to invite other proposals, upon the same and other specifications, which would give the city the option to award the contract according to the public interest. In the honest, and judicious exercise of this discretion, we cannot see upon what principle of the law he could render himself individually liable to the lowest or to any other bidder, for no one is legally entitled to the contract until it is legally awarded to him : Commonwealth v. Mitchell, 82 Pa. 343. The submission of a sealed bid or proposal to the city for the furnishing of labor or materials, under the statute, is in all respects similar in its legal effect to a bid at an auction sale, where the seller is bound by law to sell to the highest and best bidder. The bid is a mere offer to buy at the price named, and may be retracted at any time before it is accepted; and it follows, of course, that the vendor has the same right to reject the offer and withdraw the article from sale, that the bidder has to withdraw his bid. But it must be rejected before acceptance, and not afterwards. In this case, the director of public works expressly reserved the right, and, without having previously accepted any of them, he rejected all.

If the law were not as we have stated it, as suggested by the learned judge of the court below, it would not be possible, after the reception of the bids and the ascertainment of the cost, for any projected public' improvement to be abandoned or postponed, or to be prosecuted on a different plan, however imperative might be the reasons therefor. No matter that the bidding disclosed the financial inability of the municipality to complete the work; no matter that a proper economy, in view of the amount of money required, demanded a modification of the contract, or a postponement, or even the entire abandonment of the scheme, if the appellant’s contention is correct the work must go on, the lowest bidder being legally entitled under his offer. If the law were so declared, then, indeed, $vould the city be in a helpless state ; for, if bidders should come to an understanding beforehand, it might be obliged to pay for labor and materials the most extravagant and enormous amounts, thus providing a fund, for distribution among themselves, far in excess of any reasonable profit.

If the contract had been awarded to any other than the lowest responsible bidder, upon a bill to enjoin the execution of it the city authorities would doubtless be required to assign and show a sufficient legal cause, especially if the act was accompanied by evidence of bad faith and unfairness. The interests of the city, as well as the rights of individuals, might seriously suffer at the hands of a dishonest and unfaithful official, who would avail himself of the advantage of his position corruptly to favor his friends. Such a course would discourage bidders, and destroy all honest and fair competition. Practices of this kind cannot be too harshly condemned; but we are not at liberty to assume fraud, unfairness, or favoritism without proof, and there is not the slightest evidence that the defendant in this transaction was actuated by any other motive than the promotion of the best interests of the city.

The duties imposed upon the city authorities, under the act of 1874, are not merely ministerial; if they were, their performance might be compelled by mandamus. But, in Commonwealth v. Mitchell, supra, a writ of mandamus was refused to the lowest bidder, upon the ground that the act imposes duties that are deliberative and discretionary, and that, as this discretion appeared to have been exercised according to the best judgment of the officer in whom this function was lodged, a writ of mandamus could not be granted. To the same effect are the cases of Findley v. Pittsburgh, 82 Pa. 851; Douglass v. Commonwealth, 108 Pa. 559; Yealy v. Fink, 43 Pa. 212; and Burton v. Fulton, 49 Pa. 151.

The director of public works had an undoubted right, in the exercise of his judgment and discretion, and acting in good faith in the interest of the city, to refuse to accept any of the bids tendered on May 31, 1887. Having done so, he had a right at another time to solicit other bids upon the same and upon different specifications, and to accept the lowest of all the bids, by a responsible bidder, under the specifications which he should regard as most favorable to the public interest. His judgment could not be coerced by mandamus, nor was his discretion to be exercised under the fear of individual responsibility for the prospective profits of disappointed bidders.

The judgment is affirmed.