Central Contra Costa Sanitary District v. National Surety Corp.

246 P.2d 150, 112 Cal. App. 2d 61, 1952 Cal. App. LEXIS 984
CourtCalifornia Court of Appeal
DecidedJune 27, 1952
DocketCiv. No. 18913
StatusPublished
Cited by4 cases

This text of 246 P.2d 150 (Central Contra Costa Sanitary District v. National Surety Corp.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Central Contra Costa Sanitary District v. National Surety Corp., 246 P.2d 150, 112 Cal. App. 2d 61, 1952 Cal. App. LEXIS 984 (Cal. Ct. App. 1952).

Opinion

DRAPEAU, J.

This cause was tried upon an agreed statement, the controlling facts of which may be summarized as follows:

Plaintiff is a sanitary district duly organized undei; the Sanitary District Act of 1923. Its resolution No. 57, authorizing publication for bids for a sanitary disposal system, called for one publication of notice inviting bids. This notice was published on September 15, 1947. Three days later, on September 18, when the bids were opened, Tom L. Gogo was found to be the lowest responsible bidder, and on that day by its resolution No. 62, plaintiff accepted Gogo’s bid and authorized its officers to execute a contract with him.

The specifications for the work provided that bids should be made on forms furnished by plaintiff and should be accompanied by cheek or bidder’s bond in an amount aggregating 10 per cent of the bid. It was also provided that such check or bond should be given as a guarantee that the bidder would enter into a contract within 10 days after notice of acceptance of his bid by plaintiff, and that the check or bond be declared forfeited in the event the bidder refused or neglected to enter into the contract within the time specified.

[63]*63Mr. Gogo’s bid in the sum of $428,769 was presented to plaintiff on September 18, 1947, accompanied by a bid bond of the defendant surety company in the penal sum of $65,000, which was conditioned as follows:

“Now, Therefore, The Condition of the Above Obligation Is Such, that if the said principal shall execute a contract and give bond for the faithful performance thereof after being notified in writing of the award of such contract to principal . . . then this obligation shall be void; otherwise it shall remain in full force and effect.” (Emphasis added.)

On September 19, 1947, plaintiff mailed to Mr. Gogo the notice of award and copies of the contract for execution. Mr. Gogo received these papers on the morning of September 22, 1947. In the evening of that day he died, without having signed the contract and without having executed or furnished any labor, material or faithful performance bond. At no time did he refuse to execute the contract. In this connection it was stipulated that by the terms of the contract, Mr. Gogo had 10 days in which to execute it. After glancing at the papers, he gave them to his bookkeeper and said; “I have got several days to sign this and I am not going to worry about it any more this afternoon; I will take it up in time”; and he went out to take his third degree in Masonry, and while there, he died.

Zora Gogo, widow of decedent, was appointed special administratrix of his estate on September 25, 1947, and on October 20, 1947, general letters of administration issued to her.

No demand was ever made upon the administratrix or other representative of the estate to execute the contract or to perform the contemplated work.

On October 23, plaintiff by its resolution No. 73 issued another call for bids for the same work covered by the award to Gogo; and on that day by resolution No. 74, it declared Gogo’s bid bond forfeited and authorized the institution of this action.

Pursuant to the new call for bids, plaintiff received, and on November 13, 1947, opened several bids, the lowest of which was that of Stolte, Inc., for the sum of $486,036.

The difference between Stolte’s bid and that of Mr. Gogo was $57,267. The instant action seeks recovery of that sum.

Among other things, the trial court found that “The execution of the formal contract by Tom L. Gogo was pre[64]*64vented by an irresistible, superhuman cause, namely, the death of Tom L. Gogo before the formal contract was or could be executed.”

The court then concluded as follows:

(a) Plaintiff was not entitled to take anything by the instant action;
(b) “The signing of a formal performance contract by Tom L. Gogo, following the award of the contract to him, was a purely personal performance act which could not be, and which it was not contemplated or intended by plaintiff or Tom L. Gogo should be, performed by any one other than said Tom L. Gogo personally.”
(c) “The death of Tom L. Gogo before the expiration of the 10-day period within which he could sign the performance contract operated to discharge both parties from the obligation of executing the same. It also operated to discharge the estate of Tom L. Gogo and his personal representative from any obligation by reason of his failure to sign the formal contract, and to discharge defendant National Surety Corporation on its bid or proposal bond.”
(d) “The bid or proposal executed by Tom L. Gogo, and the award of the contract to him resulted merely in a contract by which he and plaintiff became bound to execute a formal contract for the performance of the work contemplated by the bid or proposal and the award; and until and unless such formal contract was executed there was no obligation on the part of Tom L. Gogo or his personal representative, to perform the work contemplated by the bid or proposal or the award of the contract to him.”

From the judgment which followed in favor of defendants,' plaintiff appeals.

On this appeal, appellant presents the following propositions :

“1. The contract which was entered into at the acceptance of the bid and subsequent notice of award to Gogo was a contract for the construction of sewers, and was not merely a contract to enter into a written contract.
“2. The contract was not in the nature of a personal service contract and therefore death did not discharge the parties of their obligations thereunder.
“3. The forfeiture of the bond is within the principles as set forth by the Supreme Court and is therefore not within the common law ruling against forfeitures.
[65]*65“4. Assuming but not conceding that Gogo as principal was discharged, the surety nevertheless should be held on its obligation.”

Appellant asserts that the question posed by its first point “is conclusively determined by United States v. Purcell Envelope Co., 249 U.S. 313 [39 S.Ct. 300, 63 L.Ed. 620],” in which the court relied on Garfielde v. United States, 93 U.S. 242 [23 L.Ed. 779].

In the Purcell case, the envelope company was the successful bidder under a advertisement calling for bids to supply the postoffice department with stamped envelopes and newspaper wrappers for a four-year term. A contract was drawn and signed by the envelope company, but due to a change in postmaster-generals, the company was notified that its contract was cancelled. In the action brought for damages for breach of contract, the court based its decision on the Garfielde case, and held that a contract was consummated by the acceptance of the bid. (Emphasis added.)

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246 P.2d 150, 112 Cal. App. 2d 61, 1952 Cal. App. LEXIS 984, Counsel Stack Legal Research, https://law.counselstack.com/opinion/central-contra-costa-sanitary-district-v-national-surety-corp-calctapp-1952.