Ricketson v. City of Milwaukee

47 L.R.A. 685, 81 N.W. 864, 105 Wis. 591, 1900 Wisc. LEXIS 140

• Court: Wisconsin Supreme Court
• Decided: February 2, 1900
• Status: Published

Opinion

Bardeen, J.

The following propositions are involved in the decision of this appeal: (1) That the proceedings of the common council and board of public works were not in accordance with the provisions of the city charter, in that no proper plans and specifications of the work to be done were ever filed with the board of public works. (2) That said contract was not let to the lowest bidder. (3) That the board of public works, in acting upon the bids and recommending the making of the contract with the Engel Company, did not act alone, but conjointly with the commissioner of health and the committees on health and public buildings and grounds. (4) That the board, in letting the contract, did not make the reservations therein required by sec. 20, ch. V, of the city charter.

1. The city charter provides for an executive board, called the board of public works. This board is empowered to make contracts in the name and on behalf of the city for the purposes and under the limitations prescribed therein. They are also to have special charge of all public buildings and grounds, and of all public works commenced or undertaken by the city or either of its wards. Secs. 1, 6, subch. Y, ch. 184, Laws of 1874. Sec. 9 of said subchapter provides that “ "Whenever any public work or improvement shall be ordered by the common council, the said board shall advertise for proposals for doing the same — apian or profile of the work to "be done, accompanied with specifications for doing the same, or other appropriate a/nd sufficient description of the work required to be done, and of the kinds a/nd quality of the material to be furnished, being first placed on file in the office of the boa/rd for the information of bidders a/nd othersThe section further provides for the advertisement for such work; that proposals stall Re sealed, and accompanied with a bond, in such penal sum, not less than thirty per cent, of the amount of the engineer’s estimate of the cost of such work, as the board may require, or a cash deposit, conditioned that he <£ will execute and perform the work for the price mentioned in hisproposals, and according to the plans and specifications on file,” in case the contract is awarded him, etc. Under the charter the primary authority for the institution of projects for public improvements or the building of public buildings was vested in the council. It alone had authority to take the initial step. It was its duty to procure the proper plans and specifications for any work proposed. It is true, as held in Koch v. Milwaukee, 89 Wis. 220, some subordinate body might secure such plans and specifications, and the council might ratify such action; but the council alone has the power to determine whether such work shall be done or not. The necessity of having a proper basis upon which to found corporate action is too apparent to require emphasis. The manner of procedure is mapped out by the charter. Its limitations bind the council as well as lesser'functionaries. They, and each of them, must proceed step by step within their prescribed orbit, and in strict conformity to the law that sets them in motion.

Many cases have arisen which serve to illustrate the strictness of this rule. In Myrick v. La Crosse, 17 Wis. 442, the plaintiff was required to grade the street in front of his lot “ to the grade line as established.” There were no specifications of the work to be done, and this lack was held fatal to subsequent action by the commissioners. In Kneeland v. Milwaukee, 18 Wis. 411, certain street commissioners’ certificates of work done in constructing a sewer in front of plaintiff’s lots were held void, because they had failed to make and file proper plans and specifications. Chief Justice Dixon there says: “ The making and filing of the plans and specifications were conditions precedent to the power of the commissioners to award tiie contract.” In Wells v. Burnham, 20 Wis. 112, the plans were defective, and, because no one could bid for the contract intelligently, and such omissions might, to some extent, prevent competition in bidding, the proceeding was avoided. We quote a passage from Kneeland v. Furlong, 20 Wis. 437: “ Work cannot be let by contract to the lowest bidder; within the meaning of the city charter, unless the bidders are informed, before bidding, of the terms or principal stipulations of the contract each successful bidder is to enter into. Bidders should be informed, either by the notice of the letting, or by the specifications in the proper office to which it refers, of the terms of the contract, at least of the quantity or amount of work, whenever it can be specified, to be included in any one contract, the time within which it is to be finished, the manner in whieh it is to be done, and, if materials are to be furnished, their quality.” This was said with reference to a contract for street improvements, and is here referred to as illustrating the necessity of providing beforehand some accurate guide to bidders, to enable them .to make intelligent bids, and at the same time preserve the element of competition. The law requiring a plan intends that it shall be as full and perfect as is usual for persons of competent skill to make of such works. Houghton v. Burnham, 22 Wis. 301.

Since all the powers of’the corporation are derived from the law and its charter, and there being no discretion vested in the governing body, it is evident, from what has been said, that the council must follow the charter requirements with substantial strictness, under penalty of having their action set aside. The charter requires that a “ plan or profile of the work to be done ” shall first be placed on file in the office of the board of public works. This plan or profile must be accompanied with “ specifications for doing the same, or other appropriate and sufficient description of the work required to be done, and of the kinds and quality of materials to be furnished,” for the information of bidders. Has that been done in this case ? It is admitted that no plan of the proposed plant was ever made or filed with the board prior to the call for bids. Indeed, the general specifications adopted requited each bidder to. submit with their bids “ complete plans a-nd specifications, fully showing and describing the buildings, machinery, furnaces;, and other necessary appurtenances of the entire cremation plant, in detail, with all dimensions given.” This was a plunge in the dark. In a general way, such specifications called for the construction of a complete garbage cremation plant capable of destroying not less than 100 tons of garbage per day. No system of garbage cremation was. adopted. No dimensions of buildings or description of machinery was' given. Each bidder might bid with reference to using the smokestack .of the sewerage pumping works, if it was of sufficient height and capacity, and the board approved of its use. Each bidder was to use his judgment as to what-were “proper foundations,” except that they were to be stone or concrete. ■ Ample provisions for windows were to-be made, but how many, or of what dimensions or quality, was left to the bidder. A coal shed of sufficient size to' store six months’ supply of fuel was to be erected, leaving it for the contractor to determine its size and shape. No> attempt was made to describe or locate the machinery, or any of the necessary appurtenances. The number of furnaces was left to the discretion of the bidder, except that the daily capacity must be as stated. “ The plant must be complete in every respect,”- — -a result greatly to be hoped for, but left to the judgment of each individual bidder. In fact, the whole scheme was so indefinite, uncertain, and un-ascertainable as to lead to the very result that followed.

But it is said that “ the proposition in this case was to erect a plant for the incineration of garbage under a patented process.” Sec. 24, ch. Y, of the charter provides the manner in which, the board, under proper authority from the council,, may secure the right to use any patented article or process.. If it be admitted that the projected scheme contemplated the use of a patented process, the council had the undoubted right to authorize the board to secure the privilege of using it without resort to an advertisement for bids. Such, however, was not their procedure. They submitted their general scheme to the owners of the different processes for garbage incineration, and invited bids, not only for the use of their patented inventions, but for the erection of buildings, and for furnishing all the necessary machinery and appurtenances. Such was not the proper procedure as mapped out by the charter. The indefinite character of the specifications and the absence of plans had the effect of stifling all competition. Each bidder was called upon to make a proposal, resting largely upon his own judgment, with absolutely no guide as to details. Ko one could tell which was the lowest bid, because no two would be on the same basis. That fact alone condemns the action taken. Of course, the court must take into consideration what was sought to be accomplished. At the same time it must consider that it. can only be accomplished in the way pointed out by the charter. If it be true, as assumed, that the different methods of garbage cremation are held under letters patent, the first and the business-like plan would be for the council to fix upon some one of the different systems. If the system adopted contemplated the use of certain makes of furnaces, which were necessary to its successful operation, there is no perceivable reason why the' city may not bargain for them, with the right to use the process. Having fixed upon a definite scheme, the preparation of appropriate plans and specifications for the plant could be gone ahead with, and bidders secured for its erection as pointed out.

It is admitted that the right to construct the garbage crematory should be thrown open to the' public to- bid, so-that tbe city shall get the freest competition; but it is argued that this cannot be secured by the adoption of any given system; that it can only be secured by the lines of policy pursued in this case. As already demonstrated, there can practically be no competition when the bidder is left to his own will or judgment in matters material to the scheme. Neither is it demonstrated that there is any such necessary connection between the furnace used and the buildings to inclose them as to prevent the preparation of proper plans and specifications, and a competitive letting of the contract for their construction. If there is any such relation, the record in this case fails to disclose it.. Permitting us to judge from the specifications printed in the record, it would seem that the cost of the buildings for the plant will cover quite a large part of the total expenditure. It is not for us to say whether the plan adopted in this case, or some other ■one, might lead to the best results for the city. We need only to determine whether the line pursued is within charter limitations or not. Certainly, the city has not attempted to comply with the charter provisions as to securing the right to use patented processes. It is equally certain that it has not complied with the other provisions as to the preparation of plans. If the city has not a sufficiently definite idea of what it wants to cause proper plans and specifications to be made, then it must wait until further information can be secured, or the plan has become so far developed as to be more than a long-felt want.

There is no similarity between this case and Kilvington v. Superior, 83 Wis. 222. In that case there was a definite, well-settled price for the patent, at which it was offered to the city and all contractors, so that there was full and free competition as to all other things that entered into the .plant. The same thing can be secured here by the adoption of a system, and the letting to the lowest bidder the doing of those thing's necessary for its construction. In Dean v. Charlton, 23 Wis. 590, tbis court beld that, where a city was empowered, by its charter, to improve streets at the expense of adjoining lot owners, but to let all such work to the lowest bidder, it could not contract for laying a pavement, at the expense of such lot owners, the right to lay which was patented, and owned by one firm. As limited by Kilvington v. Superior, supra, that rule still prevails in this state. Any one curious to note the conflict of decisions on this point can have his curiosity satisfied by referring to a note to this case in 18 L. R. A. 45.

2. "What has already been said is sufficient to indicate that no proper basis for bidding had been secured. Notwithstanding this, bids were received, as indicated in the statement, ranging from $51,000 to over $79,000. The board recommended and the council decided that, “ all things considered,” the bid of the Engel Company for $57,800 was the lowest. Sec. 10, ch. Y, provides that “ all contracts shall be awarded to the lowest bidder who shall have complied with the foregoing requisitions.” When the lowest bid is unreasonably high, the board may reject all bids and relet. Whenever any bidder, in the judgment of the board, is incompetent, or otherwise unreliable for the performance of the work for Avhich he bids, the board shall report to the council a schedule of all bids, with a recommendation to accept the bid of the lowest competent and reliable bidder, with their reasons for such recommendation, and thereupon the council may direct the board to let the work to such bidder, or relet the same anew. Judging from the report of the board and the committees with whom they were associated, the Engel system was preferred over the Dixon proposal chiefly because they thought it was more convenient of operation, and a little more definite in detail.

This case illustrates the dangers that may arise from indefiniteness in the primary requirements as to bids. The very avenue which was supposed to have been closed by the charter restrictions was left open. Each bidder supposed he was bidding on a complete plant, and yet, because there were no definite standards by which they could judge, the' board and the council discovered a leeway of discretion between bids of nearly $7,000. As they say, “ all things considered,” the Engel Company bid was the lowest. It was-to avoid giving them any chance for the exercise of discretion in that regard that the charter required definite plans, and specifications, and a letting to the lowest competent and reliable bidder. The letting must be to the lowest bidder, under the charter, unless the board shall find his bid to be unreasonably high, or that he is incompetent, or otherwise unreliable, or shall have previously failed to complete some contract with the city. Cases without number might be cited to the proposition that the lowest bidder is entitled to the contract. Such was the holding in this court in Wells v. Burnham, 20 Wis. 112, where it is said: “ The law requiring contracts to be let to the lowest bidder is based upon public economy, and originated, perhaps, in the distrust. of public officers whose duty it is to make contracts. It is of great importance to taxpayers, and ought not to be-frittered away by exceptions.” 1 Dillon, Mun. Corp. § 466, and cases; Tiedeman, Mun. Corp. § 172. The legislature having seen fit to hedge about municipal action by restrictions so obviously of value to the body politic, it is not for the courts to alter or vary them. Courts have no power to throw the law into a melting pot, and recast it at pleasure. They must enforce plain provisions and restrain palpable evasions. The object of the law being to prevent favoritism, corruption, extravagance, and improvidence in municipal action, any arbitrary decision on their part outside of the prescribed limits will be closely scrutinized, and promptly restrained. "Where all the bidders start on a common ground, and bid for a definite object, there is usually very little difficulty in ascertaining which is the lowest bid. The Dixon people claim that their bid, with the accompanying plans and specifications, covered just such -a plant as was called for in the general specifications prepared by the board. If the preliminaries had been definite and regular, they would have been entitled to the contract, but we are brought to face the fact that, before it can be determined which bid was the lowest, there must not only be a comparison of systems, but a comparison of buildings, machinery, and appurtenances. Any scheme which gives the officials the right to make this comparison, and determine the relative merits •of the different plans and systems, defeats the plain object and purpose of the statute, and opens the door for favoritism and improvidence.

3. The fact that the board did not give their independent judgment upon the bids submitted, but acted conjointly with •certain committees of the council, is urged as a reason why the execution of the contract in question should be restrained. Ordinarily, such action of the board would be of doubtful propriety. No doubt it is the theory of the law that the •council shall have the unbiased judgment of the board as a body. Oases might arise when the opinion of the board might be influenced, and perhaps overturned, by the numerical strength of the conjoint committees. No one could say that the joint report exactly represented the opinion of the board. It is a much safer and better line of policy to follow the charter requirements, and leave the board free to give the council their own conclusions, uninfluenced by a committee of associates. In the pursuit of the object here sought to be attained, it was important to secure the very best plant possible. It may be that the aggregation of wisdom and knowledge represented by the health commissioner and the several committees would materially assist in a proper solution of the garbage problem. In the absence of any showing that the opinion of the board was influenced by their associates, we would hesitate to restrain the execution of a contract upon the sole ground that they made a report, upon joint action with other parties.

4 Sec. 20, ch. Y, provides that in every contract made by the board of public works certain powers shall be reserved by the board, that certain reservations in favor of the city shall be contained therein, and that every contract shall be made expressly subject to the powers given the board by this section. In the contract in question was the following clause: “ And it is hereby agreed and declared that this contract is made expressly subject to the powers given to said board of public works by sec. 20, ch. Y,” of the charter. It is urged that this reference does not sufficiently meet the requirements of the section. The criticism is that the section requires the contract itself to contain the reservation of certain rights to the board,— for instance, to determine performance, to order reconstruction, to employ more men in case the work is not prosecuted with due diligence, etc.,— which are said to be distinct from the powers given the board. This may seem a little hypercritical, yet, so long as it leaves room for argument and contention, it ought to be avoided. The provisions of the section are plain and easy to be followed, and, to avoid ground for litigation, it were far better to follow the strict letter of the law, and make full and complete reservations both as to rights and powers of the board, as pointed out.

5. Some contention is made that the allegations of the answer that the plaintiff is not prosecuting this action- in good faith, and is not the real party in interest, have not been fairly met. It is true that plaintiff’s affidavit in this respect is somewhat indefinite and evasive. If it was intended to set up these facts in abatement of the action,— a matter which is not entirely clear from the answer,— the matter should be determined by proof on the trial, and not upon the pleadings and affidavits on a preliminary hearing.

By the Oowrt.— The order of the superior court of Milwaukee county is affirmed.