Summary
In Hillig v. City of St. Louis, 337 Mo. 291, 85 S.W.2d 91, petitioners sought an injunction to restrain the City of St. Louis and its Board of Public Service from awarding a paving contract.
Summary of this case from Wallace v. Board of Education of Montgomery Co.Opinion
July 10, 1935.
1. MUNICIPAL CORPORATIONS: Charter. In general the charter of a city bears the same relation to its ordinances that the Constitution of a state bears to its statutes.
2. MUNICIPAL CORPORATIONS: Contracts. The provisions of a municipal charter requiring that contracts for public works be awarded upon a public letting to the lowest responsible bidder are intended to secure the unrestricted competition among bidders, to eliminate fraud and favoritism and to avoid excessive cost.
In general where, in the letting of contracts for public work, restrictions and conditions are imposed upon bidders which tend to increase the cost of the work such conditions and restrictions are violative of charter provisions requiring the contracts for such work to be let to the lowest responsible bidder.
3. MUNICIPAL CORPORATIONS: Minimum Wage Ordinance. An ordinance which permits bidding on a public works' contract only by contractors who agree to pay a minimum wage prescribed by the craft to which the workmen belong is void as in contravention of the charter of the city requiring that all public works be awarded by contract to the lowest responsible bidder.
4. MUNICIPAL CORPORATIONS: Contracts: Monopolies. The specification for public work to be done may in proper cases require the use of articles, apparatus or commodities held in monopoly if they are shown to be superior although to do so may result in excluding competition and increasing costs.
But that principle does not lend support to an ordinance providing for a minimum wage to be paid by contractors in accordance with the terms fixed by a craft to which the workmen belong.
5. MUNICIPAL CORPORATIONS: Police Powers. The police powers vested in a city by its charter cannot be so interpreted and applied as to modify or relax the specific requirements of the charter as to the letting of contracts for public work.
Where an ordinance is void as in contravention of the charter a contract for public work let in accordance with the terms of the ordinance is also void.
Appeal from Circuit Court of City of St. Louis. — Hon. Charles B. Williams, Judge.
REVERSED AND REMANDED.
Williams, Nelson English for appellants.
(1) Where a city proposes to levy a special tax upon property and proceedings have been commenced leading up to the threatened special tax and such proceedings are invalid, the property owner may resort to equity to remove the cloud on his title or to prevent the threatened cloud from being placed thereon. Verdin v. St. Louis, 131 Mo. 26; Albers v. St. Louis, 289 Mo. 543. (2) The charter of the city of St. Louis requires that all public work of improving streets or alleys must be let by the Board of Public Service of said city after advertisement for bids and the board must let the work by contract to the lowest responsible bidder on plans and specifications finally adopted by said board, and a failure to advertise for bids or a failure to let to the lowest responsible bidder invalidates any special tax bill issued for performance of said work. Charter, City of St. Louis, Art. XXII, Sec. 4; Wegmann Realty Co. v. St. Louis, 47 S.W.2d 770; Thrasher v. Kirksville, 204 S.W. 804. (3) If in letting a contract for public work the awarding board places any restriction or condition on bidders the tendency of which is to increase the price of the improvement such condition or restriction violates a charter provision requiring that the contract shall be let to the lowest responsible bidder. It is obvious that any such restriction tending to increase the price tends to increase the bid because one who is not subject to the restriction and therefore might be a lower bidder is prevented from bidding. Cases authorizing the specification of patented materials or those held in monopoly do so only where the work cannot be performed without such monopolized article. Otherwise such specification is void. Allen v. Labsap, 188 Mo. 692; St. Louis Quarry Construction Co. v. Von Versen, 81 Mo. App. 519; Glennon v. Gates, 136 Mo. App. 421; Curtice v. Schmidt, 202 Mo. 727; Muff v. Cameron, 134 Mo. App. 611; Schoenberg v. Field, 95 Mo. App. 241; Taylor v. Schroeder, 130 Mo. App. 483; Lewis v. Board of Education, 102 N.W. 756, 139 Mich. 306; Adams v. Brennan, 177 Ill. 194; Marshall Bruce v. Nashville, 109 Tenn. 495; Chicago v. Hulbert, 205 Ill. 364; Inge v. Board of Public Works of Mobile, 135 Ala. 187, 33 So. 687; City of Atlanta v. Stern, 111 Ga. 789; Paterson Chronicle Co. v. Mayor and Aldermen, City of Paterson, 66 N.J.L. 129; Cleveland v. Construction Co., 67 Ohio St. 197. (4) The conditions and restrictions provided in Ordinance No. 40179 of the city of St. Louis can have no other effect than to arbitrarily increase the cost of public work and to limit the performance of the work to those who pay higher prices and are therefore higher bidders than those who do not comply with its conditions. Furthermore, the conditions and restrictions in said ordinance are void, are indefinite, and to threaten enforcement thereof puts an undue burden upon the taxpayer. Cases under Point 3; Connally v. General Const. Co., 269 U.S. 385, 7 L.Ed. 332; United States v. Cohen Gro. Co., 255 U.S. 92, 65 L.Ed. 522. Charles M. Hay and E.H. Wayman for City of St. Louis and others.
Philip C. Wise for Skrainka Construction Company.
(1) The only question in this case is whether the wage ordinance attacked is valid as against a taxpayer, and whether plaintiff's petition states a cause of action turns upon this one question. (2) The wage ordinance attacked does not violate Section 4, Article XXII, of the charter of the city of St. Louis, because it does not restrict competition between bidders for public work, but merely prevents competition for jobs between wage earners, who do not come within the purview of the charter provision referred to. (3) A mere increase in the cost of a project in and of itself does not render the ordinance and contract, or the subsequent tax bill, void, unless, in addition to the increase in cost, fraud, corruption and favoritism will be promoted by improper restrictions upon competitive bidding between contractors. Curtice v. Schmidt, 202 Mo. 703; St. Louis Quarry Construction Co. v. Frost, 90 Mo. App. 677; Youmans v. Everett, 183 Mo. App. 671; St. Louis Quarry Construction Co. v. Von Versen, 81 Mo. App. 519; Allen v. Labsap, 188 Mo. 692. (4) It is not necessary, under Article XXII, Section 4, of the charter of the city of St. Louis, that an increase in the cost of a project must be avoided at all events; but it is proper to specify articles, apparatus, or commodities held in monopoly if they are superior, even though to do so may result in preventing competition. Swift v. St. Louis, 180 Mo. 95; Wegmann Realty Co. v. St. Louis, 47 S.W.2d 770; Verdin v. St. Louis, 131 Mo. 26; Barber Asphalt Paving Co. v. Hunt, 100 Mo. 22. (5) In this case, there is no monopoly, by reason of the preferences provided for in the ordinance; but there is the same tendency as in the cases last cited, supra, to obtain superior work by limiting employment only to those qualified to "perform the work to which the employment relates." Sec. 1, Ordinance 40179. (6) Minimum wage enactments with relation to public works have been upheld in a number of jurisdictions. In re Dalton, 61 Kan. 257; Atkin v. Kansas, 191 U.S. 207; Byars v. State, 102 P. 804; Mallette v. Spokane, 137 P. 491; Wagner v. Milwaukee, 192 N.W. 994. (7) Like the eight-hour law, which has been upheld in this State, the minimum wage ordinance is in line with "enlightened sentiment elsewhere." St. Louis Quarry Construction Co. v. Frost, 90 Mo. App. 677. (8) The minimum wage ordinance assailed in this proceeding can be soundly sustained as an exercise of the police power of the city. Atkin v. Kansas, 191 U.S. 207.
Appellants brought this suit in the Circuit Court of the City of St. Louis seeking an injunction to restrain respondents from proceeding to award and perform a contract between the City of St. Louis and Skrainka Construction Company for paving a public alley in St. Louis and to restrain respondents from levying a special tax against appellants' property on account of the proposed improvement. A general demurrer was filed to the petition by all the defendants and this demurrer was sustained by the trial court. The sole ground of the demurrer was that the petition failed to state facts sufficient to constitute a cause of action against respondents. Appellants having refused to plead further, final judgment was entered dismissing the petition and from this judgment appellants have appealed to this court. The petition alleges violation of the Constitution of Missouri and of the United States and hence the jurisdiction of this court attaches.
The contentions made by the parties in this court render it unnecessary for us to set out in detail the averments made in the appellants' petition. The petition charged that prior to awarding the contract for the proposed improvement the city had passed a purported ordinance known as Ordinance No. 40179 which, among other things, prescribed minimum rates of wages to be paid by contractors doing work under contract with the city; that all bidders for the work involved in the proposed improvement here in question were notified, prior to submitting their bids for such work, that they would be required to comply with the provisions of such ordinance and that the ordinance would in terms be made a part of any contract which might be awarded to the successful bidder for the work; that respondent Skrainka Construction Company was the lowest bidder for the work in question, and that the city has signed, or is about to sign, a contract with that company for the work and that such contract by its terms will require the company to comply with the provisions of Ordinance No. 40179 before mentioned; that if such contract is awarded Skrainka Construction Company and the work therein provided for performed by said contractor that a special tax will be levied against appellants' property and that such special tax will purport to be a lien and cloud against the title of appellants as owners of the property. As the present controversy is submitted here we understand that all parties concede that its proper solution turns entirely upon the validity of Ordinance No. 40179 heretofore mentioned. We understand also that it is conceded by all parties that if the ordinance just mentioned is valid the judgment of the trial court was a proper one and on the other hand if the ordinance is void the judgment below was erroneous and the cause should be reversed and remanded.
The Constitution of Missouri has conferred authority upon the qualified voters of the city of St. Louis to frame and adopt a charter. The existing charter of the city of St. Louis was adopted in 1914, and by virtue of its adoption it became and remains the organic law of the city. [1] In general the charter of a city bears the same relation to its ordinances that the Constitution of a state bears to its statutes. [Quinette v. St. Louis, 76 Mo. 402.] With some exceptions not pertinent here, the charter of the city of St. Louis requires that "all public work" shall be let "by contract to the lowest responsible bidder." [Charter of the city of St. Louis, Art. XXII, Sec. 4.] The challenged Ordinance No. 40179 was duly enacted by the board of aldermen of the city of St. Louis and was approved by the mayor on November 9, 1933. This ordinance in substance provided, among other things, that in the case of contracts awarded by the city or its Board of Public Service for the prosecution of public work on behalf of the city such contract shall provide that all employees of the contractor while engaged in the performance of the work shall be paid hourly wages at a stipulated rate. The ordinance specified the hourly wage to be paid in various crafts and trades, e.g., asbestos workers $1.25 per hour, concreter employed as foreman 90 cents per hour, blacksmiths $1 per hour, etc. Section 3 of the ordinance provided:
"If there be any craft or trade not included in the crafts or trades specified in Section 2 hereof, from which workmen or laborers are required to be used in the completion of any contract mentioned in Section 1 of this ordinance, for which such craft or trade there be in effect in the City of St. Louis at the time of advertising for bids for such work, wage rates established by agreement for such craft or trade between contractors and workmen for private work similar to the public work to be done by such craft or trade, such wage rates so established by contract or agreement are hereby declared to be the wages required to be paid by Section 1 (b) of this ordinance for such crafts or trades not specifically included in Section 2 hereof."
In this State it is well settled that charter provisions requiring that contracts for public work be awarded, upon a public letting, to the lowest responsible bidder are intended to secure free and unrestricted competition among bidders, to eliminate fraud and favoritism and to avoid undue or excessive cost which would otherwise be imposed upon the taxpayer or property owner. [Curtice v. Schmidt, 202 Mo. 703, 101 S.W. 61; Shoenberg v. Field, 95 Mo. App. 241, 68 S.W. 945; St. Louis Quarry Construction Co. v. Von Versen, 81 Mo. App. 519; St. Louis Quarry Construction Co. v. Frost, 90 Mo. App. 677; Muff v. Cameron, 134 Mo. App. 609, 114 S.W. 1125; Glennon v. Gates, 136 Mo. App. 421, 118 S.W. 98; Taylor v. Schroeder, 130 Mo. App. 483, 110 S.W. 26; Allen v. Labsap, 188 Mo. 692, 87 S.W. 296.] As a corollary to the elementary principle just stated our courts hold in general that where in the letting of contracts for public work restrictions or conditions are imposed upon bidders, which tend to increase the costs of the work such conditions and restrictions are violative of charter provisions requiring that the contract for the work be let to the lowest responsible bidder. [St. Louis Quarry Construction Co. v. Frost, 90 Mo. App. 677; Allen v. Labsap, 188 Mo. 692, 87 S.W. 296; St. Louis Quarry Construction Co. v. Von Versen, 81 Mo. App. 519.] [3] Applying the foregoing principles to the case before us we are clearly of the opinion that Ordinance No. 40179 is void because it is in contravention of the provisions of the St. Louis charter requiring that "all public work" be awarded by contract to the "lowest responsible bidder." The ordinance, if effective, permits bidding only by those contractors who agree to pay the prescribed minimum wages. Other contractors who might, if permitted, do the work for a lower price are prohibited from bidding or performing the work by the terms of the ordinance. Thus we have a situation where a contractor who can do the work equally as well, although cheaper, is excluded from bidding, while the ordinance clearly contemplates that the successful bidder will do the work at a cost which will at least equal the minimum amount specified for wages by the ordinance in question. Furthermore, since the ordinance in question requires all bidders for public work to pay a stipulated minimum wage to their employees it is clear that the ordinance imposes a limitation other than responsibility upon all bidders and hence the free competition prescribed by the charter is excluded and stifled. [4] The respondent seeks to sustain the ordinance here in question by invoking the well-established principle that the specifications for work to be done under public competition in the execution of public improvements under city charters may in proper cases require the use of articles, apparatus or commodities held in monopoly if they are shown to be superior although to do so may result in excluding competition and increasing costs. [Swift v. St. Louis, 180 Mo. 80, 79 S.W. 172; Barber Asphalt Paving Co. v. Hunt, 100 Mo. 22, 13 S.W. 98; Wegman Realty Co. v. St. Louis, 329 Mo. 972, 47 S.W.2d 770.] But we think the principle just stated cannot properly be applied in the present case. In the execution of public projects some public authority is generally authorized to prepare specifications designating in detail the work to be done. The desired results could not be achieved — nor could any progress be made — if the public authority authorized to act was not accorded a proper and reasonable discretion to require the use of articles, apparatus or materials of superior quality, although held in monopoly. But it is clear that the exercise of the discretion to specify the use of articles held in monopoly in the execution of public work under city charters must be rather narrowly circumscribed. The public authority acting in the matter must exercise the utmost good faith, the article required to be used must be of superior quality and its use must be shown to have a tendency to improve the intrinsic quality and character of the work to be done. In our opinion the principles just stated lend no support to the minimum wage ordinance here in question. There is no essential or necessary connection between the hourly wages paid by a contractor and the intrinsic quality and character of the work done. Furthermore the ordinance requires the payment of the prescribed hourly wages to all employees irrespective of their experience, skill or efficiency.
Respondents further contend that the ordinance here under consideration can be sustained as a proper exercise of the general police powers vested in the city by the provisions of its charter. The provision of the charter requiring "all public work" to be let by contract "to the lowest responsible bidder" is a specific requirement prescribing the course to be followed in awarding contracts for public work. The charter provision last mentioned itself relates to the exercise of police powers by the city and prescribes how the powers vested shall be exercised. We are of the opinion that the general police powers vested in the city by its charter cannot properly be so interpreted and applied as to modify or relax the specific requirements of the charter as to the letting of contracts for public work.
For the reasons heretofore stated we are constrained to conclude that Ordinance No. 40179 is void because of the minimum wage provisions contained therein. As this ordinance is void it necessarily follows that the contract awarded Skrainka Construction Company is also void and that any special tax sought to be imposed upon appellants' property for the paving of a public alley by virtue of work to be performed by the Skrainka Company under the purported contract with the Skrainka Company would also be void. Upon well-established principles it is clear that appellants, if they establish the essential facts set forth in their petition, would be entitled to the equitable relief they pray in their petition. The redress they seek is to enjoin the assessment of the purported special tax against their property, or if the assessment has been made to cancel the tax bill and thus remove any cloud upon the title to their property which may have resulted from the illegal assessment of the tax. [Verdin v. St. Louis, 131 Mo. 26, 33 S.W. 480; Albers v. St. Louis, 289 Mo. 543, 233 S.W. 210.] Many other interesting questions have been brought to our attention by learned counsel but as the views we have expressed are, in our judgment, determinative of the merits of this case we deem it unnecessary to discuss them.
For the reasons above set forth the case will be reversed and remanded. It is so ordered.