Opinion
May 1, 1912.
Walter W. Magee, for the appellants.
F.H. Collins, for the respondents.
Defendants are the mayor and other subordinate public officers of the city of Syracuse. As such they constitute the board of contract and supply. As such board they received bids on July 19, 1909, for paving Marcellus street, the common council by ordinance having determined that a new pavement should be laid in that street. Relators submitted a bid, as did a number of others and claim to have been the lowest bidders, and, hence, entitled to have the contract awarded to them. This claim has been sustained by the court at Special Term.
The material facts out of which the controversy arises are not in dispute.
The Syracuse Rapid Transit Railway Company has its tracks laid in Marcellus street. By section 98 of the Railroad Law (Gen. Laws, chap. 39 [Laws of 1890, chap. 565], as amd. by Laws of 1892, chap. 676) it is required to "have and keep in permanent repair that portion of such street * * * between its tracks the rails of its tracks, and two feet in width outside of its tracks." Under this section it has been held that a street surface railroad company is required to pay for its portion of the cost of a new pavement when required by the municipal authorities. ( City of Rochester v. Rochester R. Co., 182 N.Y. 99. )
By the franchise granted by the city of Syracuse to the Syracuse Rapid Transit Railway Company, provision is made to the effect that when the common council determines to pave any street upon which the railway company's tracks are laid, it shall cause to be served upon the railway company a certified copy of the resolution ordering such pavement, and at any time before the expiration of four months from such service, the railway company may commence the work of paving the railroad strip according to the plans and specifications, upon giving to the city twenty days' previous notice in writing of its intention to commence such work and in case the railway company fails to serve such notice or to commence the work of paving the railroad strip within four months, it shall thereby lose its right to pave said railroad strip and the city may then proceed to pave the same and to charge the cost thereof " at the contract price for the balance of the street" to the railway company and collect the same from the company.
The city served the railway company with proper notice and the railway company allowed four months to expire without beginning the work of paving the railroad strip or serving notice of its intention so to do. This occurred before the bids had been received on July 19, 1909. By the specifications for the pavement an extra foundation was provided for in the railroad strip, amounting to 6,960 square yards in excess of the regular foundation such as was provided for the rest of the street, and the bidders were required to specify and did specify the amount of their bids respectively for this extra foundation in the railroad strip. Relators' bid for this extra foundation was $1,392. The bid of F.J. Baker, whose total bid was next higher than relators, was for this extra foundation $3,480. The specifications for the pavement contained this clause: "The Common Council reserves the right through the Commissioner of Public Works to increase or diminish the quantity of work to be done by adding to and deducting from the work contemplated in the 'Railroad strip.'" Also a clause under "Notice to Contractors," as follows: "The Board of Contract and Supply reserves the right to reject any and all bids not deemed for the interest of the city." In accordance with the provisions of the charter of the city bids were invited and received for each kind of pavement authorized to be used in that city. The charter provided that where the expense of the pavement is to be assessed upon the abutting property, the property owners to be assessed may by petition determine the kind of pavement to be laid in the street, after the bids upon the several kinds have been received, tabulated and published. The bids were tabulated and published shortly after July 19, 1909, and in due time the property owners by the requisite petition selected brick block pavement as the kind to be laid, for which variety of pavement nine bids had been received, that of relators for the total sum of $39,338 for the whole pavement, including the railroad strip and its extra foundation, being the lowest. The next highest bid was by F.J. Baker, a total of $40,476.50, including the whole pavement and the extra foundation in the railroad strip. But relators' bid for the pavement proper, not including the extra foundation in the railroad strip, was at the rate of $2.05 per square yard, while that of Baker for the pavement proper was only $2 per square yard. It was, therefore, relators' bid of $1,392 for the extra foundation as against Baker's bid for the same of $3,480 which made relators' total bid for the whole work the lowest. No action having been taken to award the contract, relators, on August 30, 1909, served a written notice upon the board demanding that the contract be awarded to them. No action was taken, however, by the board until September 20, 1909. In the meantime and on September 7, 1909, the Syracuse Rapid Transit Railway Company presented a petition to the common council asking to be permitted to itself pave the railroad strip. This petition was granted by the common council on September twentieth and formal ordinance adopted giving permission and consent to the railway company for it to pave the railroad strip, and amending the company's franchise accordingly. On the same day the board of contract and supply adopted a resolution rejecting all bids received for this pavement on the ground, as stated in their resolution, that "in the opinion of this Board, the lowest bid or proposal therefor is excessive, and it is the judgment of this Board that such rejection of said bids or proposals is for the best interests of the city and of the property owners liable to assessment for the cost of said pavement." Said board also adopted a resolution directing its secretary to advertise again for new bids or proposals pursuant to law.
The motion papers in this proceeding had, however, been served on September thirteenth, the notice of motion being for a Special Term to be held on September twenty-fifth.
The Special Term has held that after the bids had been received, opened, tabulated and published, and the property owners had selected the kind of pavement to be laid in view of the bids received, the power of the board of contract and supply to reject all bids is gone, and the lowest bidder for the particular kind of pavement selected by the property owners has a legal right to have the contract awarded to him. It was also held that relators made the lowest bid for brick block pavement, and that mandamus was their proper remedy.
These questions turn upon the interpretation to be given to sections 120, 121 and 124 of the Second Class Cities Law (Consol. Laws, chap. 53; Laws of 1909, chap. 55). Section 120, after specifying what city officers shall compose the board of contract and supply, provides: "Except as otherwise provided by law, it shall be the duty of such board, after public notice and in accordance with regulations to be prescribed by general ordinance of the common council, to let to the lowest bidder, who will give adequate security therefor, all contracts for the performance of any work or for the supply of any material required by or for the use of any officer, board, body or department of the city, in all cases where the expense of such work or materials, or both, shall exceed the sum of two hundred and fifty dollars [except in certain emergencies not material here]. * * * The board shall have power to reject all bids or proposals if in its opinion the lowest bid or proposal is excessive."
Section 121 prescribes the methods to be pursued in receiving and opening bids for public work of the city, including the time, place and manner of opening bids, and also provides as follows: "The board may reject all bids or proposals received at any meeting and advertise again for new bids or proposals to be received at another meeting as above prescribed."
Section 124 provides: "The common council shall, by general ordinance, prescribe, approve and adopt the materials to be used in paving * * * the streets and public places of the city, and fix the standard of excellence and test required for each such material. The city engineer shall prepare standard specifications, in accordance with such ordinance, for the performance of the work involved in such improvements with each kind of material so prescribed, approved and adopted therefor. Whenever the common council shall determine to make any such improvement, and the proceedings provided by law as preliminary thereto shall have been taken, the board of contract and supply shall advertise for proposals for the furnishing of the materials and the performance of the work involved in such improvements, and specifications shall be prepared and proposals shall be invited, pursuant to the provisions of this chapter, for the construction of such improvement with each kind of paving material so prescribed, approved and adopted by the common council. In case the expense of any such improvement is to be assessed upon the property abutting upon the street * * * the secretary of the board shall, within one week after proposals for such work have been received and opened, cause to be published in a daily official paper for four successive days * * * a notice containing a summary statement of all such proposals. A majority of said property owners * * * may present to the board of contract and supply a petition or other writing designating the general kind of pavement or material to be used in making said improvement. If no part of the expense of such improvement is to be assessed upon the property abutting upon said street, or if such expense is to be so assessed, but the property owners shall not have made a designation * * * the common council shall, not later than at its next regular meeting after the expiration of ten days from the service of such notice, designate the kind of pavement or material to be used in making such improvement, and the contract for such improvement shall be awarded for the kind of pavement or material so designated by the property owners or common council as aforesaid, and to the lowest bidder for doing the work with the kind of pavement or material so designated."
The last sentence above quoted was held by the trial court to be mandatory upon the board of contract and supply and to deprive that board of the power given in the previous sections to reject all bids and readvertise, and of the right so to do contained in the specifications for this particular pavement. This construction was adopted for the reason that as section 124 relates exclusively to paving contracts and contains no special provision for rejecting all bids and readvertising, the provisions of sections 120 and 121 on that subject do not apply to paving contracts, or, at all events, were not intended to apply after the result of the bidding had been published and the property owners had proceeded to select the particular kind of pavement to be laid. This construction was reached on the ground that to hold otherwise would open the door to fraud and collusion of various kinds.
We are unable to concur in this view. There seems to be no sound reason for making a different rule in reference to paving contracts than for any other public city work, and we do not think such a distinction is made or intended by this section. It seems reasonably clear that the general power conferred upon the board of contract and supply by sections 120 and 121 to reject all bids for work to be let by public bidding applies generally and is intended to include paving work as well as other work.
In the present case bids were received for six different types of pavement besides the brick block. There were nine separate bids for the brick, and from one to three for each of the other varieties. When these bids were received and tabulated the board could not know which type of pavement the property owners would select; the bid for one type they might consider fair and reasonable, and for another type excessive, but unless the property owners should select the type for which the bids were considered excessive, there was no occasion to reject all bids for fear of that result. The proper time for this board to exercise its discretion would seem to be after it knew the type of pavement preferred and selected by the property owners. The three sections of the statute referred to are found in article 8 of the general statute, which is entitled "Department of Contract and Supply." We think they should be construed together as vesting in the board the same right to reject all bids and readvertise in the case of paving contracts as of other contracts required to be let to the lowest bidder, and that the clause of section 124 which provides that the contract shall be awarded "for the kind of pavement * * * so designated by the property owners * * * and to the lowest bidder for * * * the kind * * * so designated," was not intended to, and does not, deprive the board of the power given them in the previous sections to reject all bids and readvertise at any time prior to the formal action of the board in awarding the contract. Prior to that time, the bids are mere proposals.
In Walsh v. Mayor, etc. ( 113 N.Y. 142) construction was given to the provisions of an act, applicable to the city of New York (Laws of 1860, chap. 308) and relating to public contracts, which required that all such contracts "shall be awarded to the lowest bidder for the same respectively with adequate security, and every such contract shall be deemed confirmed in and to such lowest bidder, at the time of the opening of the bids, estimates or proposals therefor, and such contract shall be forthwith duly executed * * * with such lowest bidder," and it was held that this more definite and specific language did not prevent the public authorities from rejecting all bids and readvertising, and was not intended to have that effect.
In that case, as here, the bidders were warned in the advertisement and specifications that the right to reject all bids was reserved, but the decision was not placed upon the legal effect of such reservation but squarely upon the construction and legal effect of the provisions of the statute.
Moreover, provisions of this character in city charters are not made for the benefit of contractors or bidders upon public works, and are not available for them to compel the execution in their favor of such contracts by city officials. They are intended for the benefit and protection of the public, as has been recently held by the Court of Appeals in the case of Molloy v. City of New Rochelle ( 198 N.Y. 402). The charter of the city of New Rochelle (Laws of 1899, chap. 128, § 33) contained this provision: "Whenever any expenditures to be made or incurred by the common council or city board or any city officer in behalf of the city for work to be done, or materials or supplies to be furnished, * * * shall exceed two hundred dollars, the city clerk shall advertise for and receive proposals therefor, in such manner as the common council, or as the board or officer charged with making such contract shall prescribe, and the contract therefor shall be let to the lowest responsible bidder, who shall execute a bond to said city with one or more sureties, being freeholders, for the faithful performance of the contract." The plaintiff in that case was the lowest bidder for a street pavement. Nevertheless, his bid was rejected and the contract awarded to another bidder for a larger amount. Thereupon Molloy sued the city to recover as damages the profits he would have made had this provision of the charter been complied with and the contract awarded to him. In the course of the prevailing opinion Judge CHASE reviews many authorities, and among others, the case of East River Gas Light Co. v. Donnelly ( 93 N.Y. 557), relating to a similar statute, from the opinion in which he quotes, as follows: "The statute merely provides a scheme for the prudent administration of the affairs of the city, and has imposed a duty upon the defendants to carry it out. This duty appears, from the plaintiff's showing, to have been violated. But the duty is a public duty to the city or people at large, not to the plaintiff or for the benefit of individuals, or the promotion of any private interest, nor has the statute given to the plaintiff or any person an action for its violation." Thereupon Judge CHASE proceeds to say: "The court used the language quoted in an action brought by the plaintiff against the defendants, who composed the common council of Long Island City, to recover against them individually the damages which he claimed to have incurred by reason of their failure to obey the statute. Such language, however, is applicable to this action in which the plaintiff seeks to make the municipality respond in damages for the failure of its officers to obey a statute enacted for the express purpose of protecting the municipality in its property rights. The statute was not enacted for the benefit of the plaintiff, and he cannot recover by reason of its provisions."
It must be equally true here. As the statute we are considering was not enacted for the benefit of relators, they can have no remedy by reason of its provisions.
Having thus disposed of the claim of the plaintiff in the Molloy case, so far as it rested upon the statute, the opinion then proceeds to consider the alleged right asserted to recover upon the contract, and held that no contract relation arose from plaintiff's bid in that case being the lowest bid, notwithstanding the requirement of the statute that the work should be let to the lowest bidder. The opinion then proceeds: "The statute and the advertisement in this case call for proposals. The common council reserved the right to reject any and all bids. Under a statute requiring that all contracts shall be awarded to the lowest bidder, the body awarding the contract acting in good faith may refuse to so award the contract if they deem it for the best interest of the city to do so, and may reject all of the bids and readvertise." (Citing Walsh v. Mayor, etc., supra.) The opinion then proceeds to point out the manner in which the provisions of such statutes are enforced by the courts when their enforcement is sought by one for whose benefit they are enacted, citing numerous cases to show: First, that actions upon contracts let in violation of such statutes are not sustained; second, that the petitions of contractors who have taken contracts in violation of such statutes to compel the municipal officers to pay in pursuance of such contracts are denied; third, that assessments involving expenditures in violation of such statutes are set aside upon the petition of taxpayers; fourth, taxpayers' actions to prevent the making of contracts contrary to the statutes are maintained. All the judges concurred in this opinion, except Judge VANN, who concurred in the result.
The case is, we think, controlling against relators' claim to be awarded the paving contract in question.
There is a further question as to whether relators were in fact the lowest bidders.
We think it was within the discretion of the common council to waive the default of the Syracuse Rapid Transit Railway Company and permit it to pave the railroad strip at any time before the contract was actually let to others, or at least that part of it described as the extra foundation in the railroad strip. The specifications stated: "The Common Council reserves the right through the Commissioner of Public Works to increase or diminish the quantity of work to be done by adding to and deducting from the work contemplated in the 'Railroad strip.'" Thus, even after the contract had been let, it was competent for the common council to take away from the contractor the work of laying this extra foundation and to permit the railway company to do that work or to let it to others. If that was done before awarding the contract, bidders could not complain. The board, in view of that contingency, might well be in doubt as to whether relators were, in fact, the lowest bidders; clearly they were not, unless they were to lay the extra foundation in the railroad strip. On September twentieth before the board had acted upon the bids the common council granted the request of the railway company permitting it to pave the railroad strip. It had the power so to do. It was then reasonably certain that the extra foundation would not be laid by the general contractor. While this perhaps would not justify awarding the contract to Baker as the lowest bidder, it did, we think, permit the board, acting in good faith, to reject all bids and readvertise, as was done.
In view of what has been said it is unnecessary to consider the question as to whether mandamus is the proper remedy in such a case as this.
We think the judgment and order appealed from should be reversed and the writ dismissed, with costs to the defendants.
All concurred, except McLENNAN, P. J, who dissented upon the opinion of ANDREWS, J., delivered at Special Term.
Judgment and order reversed and writ dismissed, with costs of this appeal and in the Special Term.