State ex rel. Robert Mitchell Furniture Co. v. Toole

55 L.R.A. 644, 66 P. 496, 26 Mont. 22, 1901 Mont. LEXIS 90

• Court: Montana Supreme Court
• Decided: October 28, 1901
• Docket: No. 1,715
• Status: Published

Opinion

ME. JUSTICE PIGOTT,

after stating the case, delivered the opinion of the court.

Many questions have been argued which we need not decide, —for instance, we find it unnecessary to determine whether the furnishing of a bond in conformity with the’ provisions of Section 708 of the Political Code is always a prerequisite to a valid contract with the board, or to determine the kindred question whether the board might waive or excuse the failure of the plaintiff to present a bond with its bid, and, if it could, whether it did so; and also the question whether the plaintiff followed the requirement of the latter sentence of Section 706 of the Political Code providing that “a sample and minute description of every article must accompany and be deposited with each proposal.” Por the purposes of the proceeding we assume, but do not decide, that these questions and all others not specially discussed should be solved in plaintiff’s favor. So viewing the case, we deem it necessary or advisable to consider but four questions:

1. The defendants Donovan and Hays attack the petition and alternative writ of mandate upon the ground that the proceeding is in effect an action against the state and say that a state of the Union is not without its express consent subject Í» suit in its own courts or in those of another state. They say that the doctrine is absolute 'and cannot be overthrown indirectly by the institution of actions against state officers when in effect they are actions against the state. With this we agree. (Langford v. King, 1 Mont. 33; Fisk v. Cuthbert, 2 Mont. 593; State ex rel. Journal Pub Co. v. Kenney, 9 Mont. 389, 24 Pac. 96; 23 Am. & Eng. Enc. Law (1st Ed.), 83.) But the present proceeding is not in effect an action or proceeding against the state. If the allegations of the petition are true the proposal of the plaintiff was regularly accepted and the contract let to it as the lowest responsible bidder after a compliance with all the statutory requirements. The state by its authorized agent .awarded a contract, and tbe object of tbe present proceeding is to compel tba defendants as public officers of tbe state to sign tbe formal contract, and thereby perform wbat is alleged to be •their ministerial duty. If tbe duty to be performed by a public officer of tba state is purely ministerial, tbe writ of mandate may be issued, tbe case being otherwise a proper one for tbe ■employment of such writ. (State ex rel. State Pub. Co. v. Smith, 23 Mont. 44, 57 Pac. 449, and cases there cited; Marbury v. Madison, 1 Cranch, 137, 2 L. Ed. 60; In re Ayers, 123 U. S. 506, 8 Sup. Ct. 183, 31 L. Ed. 230.) In tbe case last cited tbe court approved tbe following extract from tbe opinion in Board of Liquidation et al. v. McComb, 92 United States, 541 (23 L. Ed. 628) : “A state, without its consent, cannot be sued by an individual; and a court cannot substitute its own ■discretion for that of executive officers in matters belonging to tbe proper jurisdiction of tbe latter. But it has been well settled. that when a plain official duty, requiring no exercise of discretion, is to be performed, and performance is refused, any person who will sustain personal injury by such refusal may have a mandamus to compel its performance; and, when such duty is threatened to be violated by some positive official act, any person who will sustain personal injury thereby, for which adequate compensation cannot be bad at law, may have an injunction to prevent it;” and upon that principle this court has often entertained proceedings against state officers, tbe latest being State ex rel. State Savings Bank v. Barret, State Treasurer, 25 Montana, 112, 63 Pacific Reporter, 1031. If tbe defendants owé to tbe plaintiff tbe performance of an act which tbe law specially enjoins as a duty resulting from an office,— in other words, if tbe defendants as member’s of tbe board owe to tbe plaintiff a duty, and tbe performance of that duty is a ministerial act not involving tbe exercise of discretion or judgment, — tbe writ of mandate will lie to compel such performance, and tbe state is not thereby subjected to an action or proceeding. Tbe petition is not obnoxious to tbe objection urged.

2. Section 707 of tbe Political Code provides with reference to the state furnishing board: “The proposals received must be directed to- the board, opened and compared by it at its office at twelve o’clock noon, of the day specified in the advertisement, and the board must award the contract for furnishing such supplies, or any of them, to the lowest responsible bidder at such time.’’ Section 709 provides, among other things, that any and all bids may be rejected and the board may advertise again. The board is a governmental agency possessing such powers and jurisdiction, and such only, as the law confers upon it. In the examination, comparison, and consideration of the proposals and in awarding the contract the board exercises its discretion. The duty imposed is to- award the contract to the lowest responsible bidder, unless the bids be rejected. This the statute commands it to do ; and whenever, after a compliance with the statutory prerequisites essential to the valid acceptance of a bid, it has regularly awarded the contract, there spring into- existence vested rights which the board cannot destroy or impair. It cannot insert into the formal written contract any condition not consonant with the contract already made by virtue of the acceptance of the bid. (American Lighting Co. v. McCuen, 92 Md. 703, 48 Atl. 352.) In the absence of fraud, accident, and mistake, or other legal reason sufficient to render the acceptance-void or voidable, the contract resulting therefrom cannot (unless by mutual consent) be changed or annulled, nor may its. obligation be impaired, by any act of the board. True, such a contract is subject to the approval of the governor and state treasurer (Constitution, Art. V, See. 30; Section 710, Political Code; State ex rel. State Pub. Co. v. Hogan, 22 Mont. 384, 56 Pac. 818; State ex rel. State Pub. Co. v. Smith, 23 Mont. 44, 57 Pac. 449), but this is a matter which does not concern the members of the board non give it the right to recall the acceptance and award. When it has thus regularly discharged' the duly imposed upon it by the law, its jurisdiction in respect of awarding the contract is exhausted; its discretion was exercised and the power further to exercise it is gone. We are-aware that there is some conflict of opinion upon this subject, but we think that such must in the nature of things be the rule applicable to boards and officers clothed with specially delegated authority and intrusted with limited jurisdiction. Support for these general observations may be found in People ex rel. Holler v. Board of Contract and Apportionment of City of Albany, 2 Howard’s Practice Reports (N. S.) 423; People ex rel. Lunney, v. Campbell, 72 New York Reports 496; State ex rel. Whedon v. York County, 13 Nebraska 57 (12 N. W. 817) ; Wren v. Fargo, 2 Oregon 20; People ex rel. Coughlin v. Gleason, 121 New York, 631 (25 N. E. 4) ; Boren v. Commissioners, 21 Ohio State Reports, 311; State ex rel. Coogan v. Barbour, 53 Connecticut, 76 (22 Atl. 686, 55 Am. Rep. 65.)

The action of the board in attempting to cancel the contract was void unless a cause existed which the law recognizes as sufficient to invalidate the contract. We proceed to ascertain whether such cause appears.

3. In behalf of the attorney general and the secretary, of state the argument is advanced that the reason stated in the resolution was sufficient to justify the board in reconsidering the motion by which the bid of the plaintiff was adopted and in canceling the contract thereby created. It is asserted and seriously argued that, conceding the regularity of all the proceedings precedent to the letting of the contract and the validity of the letting, the board possessed the right to cancel the contract upon the ground that the plaintiff “Was denominated by the labor unions of the United States as hostile to labor organizations and was classed as a scab company.” The advertisement'was silent upon the subject of union labor and non-union companies or persons; it did not pretend to limit the bidding to those who were friendly or indifferent to labor organizations, —if it had done so it would, as we shall see, have been invalid; on the contrary the notice was addressed to' all persons — the-invitation to present proposals was general. The proposal of the plaintiff was filed; the board declared it to be the lowest responsible bidder and awarded the contract to it. The plaintiff was not guilty of fraud or deceit; the board was not misled; it was not induced to let the contract by any misrepresentation whatever; the bid of the plaintiff was not accepted through any accident or mistake. By what sort of logic do thei attorney general and secretary of state attempt to defend their position ? Let their answer speak upon this point. After reciting that the plaintiff was hostile to labor organizations and was classed as a non-union company, it avers that this “fact, in the judgment of defendants as said state furnishing boax*d, rendered said company liable to be enjoined from carrying out said contract, and on the further grounds that said company was more liable to be unavoidably delayed by strikes and labor troubles- than if said contract were let and awarded to a company or person not hostile to labor organizations; that, knowing the attitude of labor organizations towards the relator herein, it was. probable and likely that the furnishing and delivery of the furniture and supplies under said contract by said relator would result in great damage and injury to the state, which could not be adequately provided against under the contract. The fact that said company was hostile to labor organizations, and having been so classed by them as a non-union company, was a reason, in the judgment of the defendants as such state furnishing board, which would affect their responsibility as bidders and render them less responsible and trustworthy than if they were not hostile to labor organizations or classed as a nonunion company. That said fact that said relator was hostile to labor organizations and classed as a nonunion company was not known to the defendants' at the time they let and awarded said contract to the relator herein.” Is it not wasting words to declare the evident and palpable-fact that this is not a reason Avhich the law recognizes as a sufficient cause for avoiding the contract? We are not to be understood as denying the legal right of the board in good faith but erroneously to award a contract to- one who- is not in fact the lowest responsible bidder, for we apprehend the rule in this state to be that the action of the board will be controlled or interfered with only where it clearly appears that the refusal to' award the contract to the lowest responsible bidder was fraudulent or in bad faith, or was the result of an abuse of discretion (which is equivalent to a failure to exercise discretion) ; that the refusal was merely erroneous is not sufficient to justify the issuance of the writ of mandate. Such seems to be the principle underlying the decision in State ex rel. Eaves et al. v. Richards, 16 Montana, 145 (40 Pac. 210, 28 L. R. A. 298, 50 Am. St. Rep. 416). It may be that the refusal to award a contract to> the lowest bidder who is in all respect * responsible, for the sole reason that he is inimical to organized labor and is classed as a nonunion employer, would be arbitrary, oppressive and unjust conduct, indicating that the board failed to exercise discretion. But however this may he, the rule stated is inapplicable to the case at bar. The action of the defendants must be tested by a more rigid rule; for the board did not refuse to let the contract; it awarded the contract to the plaintiff, and seventeen days thereafter ordered its cancellation for the alleged reason, stated in the resolution of August 23. If a contract was made by the acceptance of the bid, the board was powerless to rescind its action and thereby cancel the contract, except for a cause which in the eye of the law, rendered it void or voidable. In this respect it was like a contract between individual persons in which each enters into' covenants with the other, — it could not be annulled at the pleasure or caprice of one party alone. Can it be sanely suggested by even 'the most prejudiced man that a private person possesses the legal right to hold for naught a contract to which he is a party because the other party is a person who* is inimical to organized labor and is classed as a nonunion employer, the contract being-silent on that subject? Of course the law would not recognize •such reason as cause for the annulment of the contract; and equally as a matter of course is the rule the same in the case-of contracts between boards and the individual person or corporation. In so far as its legal value and force is concerned the reason assigned might as well have been that the plaintiff employed members of labor unions, was therefore inimical'to nonunion workingmen, and was classed as a union company; or that the directors of the plaintiff believed in the dogma of the infallibility of the Pope and were therefore unfriendly to Protestants, or in. the doctrine of transubstantiation and in auricular confession, or were high churchmen and therefore classed as ritualists; or that they were in sympathy with England’s policy towards Ireland and therefore distasteful to the Eenians; or were members of a law and order league and hence inimical to anarchists and their sympathizers. In passing we observe by way of illustration that a contract between private persons may provide that it shall cease to be obligatory or be void if either party to it shall employ nonunion men, and the law will permit the provision to have its full force; and so with an inhibition against the hiring of union men and with all other stipulations which are not impossible of performance; not immoral, nor contrary to public policy. A private person seeking-proposals may give notice that the bidders must be members of labor organizations or employers of none but union workmen ; the acceptance of a hid made in accordance with the terms of the notice would constitute a contract the conditions whereof will be binding. But the advertisement for proposals an,d the contract created by tile acceptance of a proposal made pursuant thereto to- do work or furnish supplies for the state stand upon a different footing. The object of advertising for proposals is to invite and secure the benefit of competitive bidding. Section 705 of the Political Code prescribes that before any contract is let the board must advertise in two1 daily newspapers printed in the state, one of which must he printed at the capital, for sealed proposals to furnish the supplies desired. This court, in State ex rel. Lambert v. Coad, 23 Montana, 131 (57 Pac. 1092), quoted with approval the following language from the opinion of Dement v. Rokker, 126 Illinois, 174 (19 N. E. 33) : “Letting by contract to the lowest responsible bidder’ necessarily implies equal opportunity to and freedom in all whose interests or inclinations might thus impel than to compete ac the bidding. No one may be compelled to bid at such a letting, but there must be entire fairness and freedom in competition. * * * Tbe manifest purpose in requiring tbe contract to be let to Tbe lowest responsible bidder’ is to protect tbe state against imposition and extortion.” A contract entered into by tbe acceptance of a bid for public work tendered pursuant to an advertisement limiting tbe right to bid to persons employing or who will in. tbe future employ union labor only, is- necessarily void • tbe advertisement is illegal, for it tends to- defeat tbe very purpose it was intended by tbe legislature to subserve. In Adams v. Brenan, 177 Illinois, 194 (52 N. E. 314, 42 L. R. A. 718, 69 Am. St. Rep. 222), tbe board of education advertised for bids for t-be construction of a roof for an addition to one of tbe free school buildings, tbe advertisement containing tbe following notice: “None but union labor shall be employed on any part of tbe work where such work is classified under any existing union.” Tbe bid of one Knisely was accepted, and a contract made containing a provision that none but union labor should be employed by him. A taxpayer filed a bill asking that tbe contract be declared void and» that the board be enjoined from carrying it out or expending money under it. One of tbe reasons given in tbe application to tbe board for tbe adoption of tbe clause respecting tbe employment of union labor was that it would do away with strikes upon school buildings and thereby save tbe board much annoyance and delay. The syllabi accurately state tbe conclusions of the court as follows: “(3) Board of education cannot bind itself to give only union men employment. A board of education has no- power to agree with the representatives of labor organizations to- insert in all its contracts for work upon school buildings a provision that none but union men should be employed in such work, or placed upon its pay rolls. (4) A board of education has no discretion to make contracts restricting competition. That a board of education might- have been of the opinion its action-was for tbe public benefit affords no justification for limiting competition among bidders upon school building contracts, by requiring'them to employ only union men in tbe work. (5) Stipulation in public contract for employment of union men only is illegal. A provision in a contract for a public school building, which requires the employment of union men only, creates a monopoly in their favor, and restricts competition by preventing contractors from employing any but union men, excluding all others engaged in the same kind of work.” The like principle is the basis of the decision in State ex rel. Snyder v. Portland Natural Gas & Oil Co., 153 Indiana, 483 (53 N. E. 1089, 14 Am. St. Rep. 314).

Although the reason given, at the time of the attempted cancellation is not recognized by the law as valid, yet if there is cause sufficient to render the contract void it may be shown. The defendants are not estopped to urge other defenses. An absolutely void contract cannot be made valid by the failure of public officers to object tot it upon the proper ground. There is no need of precedents to sustain this statement. State ex rel. Leech v. Board of Canvassers of Choteau Co., 13 Montana, 23, (31 Pac. 879), is not exactly in point. The case of Newell v. Meyendorff, 9 Montana, 254 (23 Pac. 333, 8 L. R. A. 440, 18 Am. St. Rep. 738), is not pertinent.

4. Was the advertisement inviting proposals published according to law ? It was inserted in the Helena Independent, a daily newspaper published at the seat of government, where it ran for twenty days prior to the time^when the bids were opened and compared; but it was not printed in any other newspaper within the state. Section 705 of the Political Code reads as follows: “Before any contract is let, the board must advertise for twenty days in two daily newspapers printed in the state, one of which mu'st be published at the seat of government, for sealed proposalsjto furnish any and all the supplies mentioned in the next preceding section.” The advertisement appeared in but one paper printed in the state, and hence the section was not complied with. Where advertising for bids is a statutory, requirement, the law is that neither the municipality nor its agents can make a contract binding upon it without compliance with the formalities so prescribed. “Bids need not be called for unless the statute requires it; but if notice, advertising and similar preliminaries are required, a contract entered into without attention to these preliminaries will be held invalid. * * * The same rule applies to the letting of contracts on behalf of the state and, before a contract can become valid and binding upon the state, the statutory formalities must be complied with.’’ (State ex rel. Lambert v. Coad, 23 Montana, 131, 57 Pac. 1092, and cases there cited.) The only argument advanced by the plaintiff against this objection to the contract is that Section 705 conflicts with Section 30 of Article V of the state Constitution, which ordains that “all stationery, printing, paper, fuel and lights used in the legislative and other departments of government, shall be furnished, and the printing, and binding and distribution of the laws, journals and department reports and other printing and binding, and the repairing and furnishing the halls and rooms used for the' meeting of the legislative assembly and its committees shall be performed under contract, to be given to the lowest responsible bidder below such maximum price and under such regulations as may be prescribed, by law.” Counsel for the plaintiff argue that the legislative assembly had no power to require the publication of the advertisement to' be made in any newspaper other than the Helena Independent, the proprietor of which had the contract for the public printing, and that the publication of the advertisement in that newspaper constituted a compliance with the law. The position of counsel is untenable. It is apparent to us that advertisements for proposals are not public printing, within the language or spirit of Section 30, — a contract for advertising for proposals to furnish supplies' is not required to be let as a printing contract to the lowest responsible bidder; in other words, within the purview and intent of .Section 30, an advertisement inviting bids is not printing, the contract for which must be let to the lowest responsible bidder; a contract for doing the printing mentioned in Section 30 does not include advertisements for bids. In the absence of a constitutional inhibition the legislative assembly has the right to prescribe tlia manner of giving notice for proposals to furnish supplies. It has clone so by Section 705, which requires that the state furnishing board must advertise for such proposals in two daily newspapers printed in the state, one of which must be printed at the capital. This section.is in no wise repugnant to the constitution.

For the reason that the advertisement for proposals was not published in accordance with the requirements of Section 705 of the Political Code, the alternative writ is quashed and the proceeding is dismissed, at the costs of the plaintiff. Let judgment be entered accordingly.

Writ quashed and proceeding dismissed.