Potts v. Philadelphia

Opinion by Me. Chief Justice Geeen, The object of the bill in this case practically is to restrain the mayor of Philadelphia from signing, and the controller from countersigning, a contract for lighting the city with electric light during the year 1900. The terms of the proposed contract had been reached by the biddings of various electric companies, after public notice had been given that bids would be received, and the director of the department of public safety had accepted the bid of the Brush Electric Light Company, and had awarded the contract to that company. Thereupon the plaintiff’s bill was filed to restrain the execution of the contract. By the express terms of the Act of June 1, 1885, P. L. 51, art. 14, sec. 1, it is provided that “All contracts relating to city — 626 — affairs shall be in writing, signed and executed in the name of the city by the officer authorized to make the same; and in cases not otherwise directed by law or ordinance, such contracts shall be made and entered into by the mayor. . . . All contracts shall be countersigned by the controller.” As there is no law directing any other city official to execute such contracts, it became the plain legal duty of the mayor to sign, and the controller to countersign, the contract in question. Intrinsically, therefore, and upon the purely technical aspect of the subject it could not be tolerated that an injunction should, or could, be granted to prevent these officials from doing that which the law peremptorily says they must do. In other words if the contract for lighting the city is to be executed at all, it must be, done by these official persons. It follows, hence, necessarily, that unless this contract is one which they camiot lawfully sign, they must certainly perform that duty. For the appellant, it is contended that the proposed contract is an invalid contract for two reasons, first, that the advertising for proposals and the awarding of the contract were conducted by the department of public safety, whereas the law requires that this should be done by the department of public works, and, second, that the proposed contract was fraudulent in fact. As to the first of these contentions it is replied, that for six years preceding the present, it has always been the practice in the conduct of the city departments to carry on the proceedings for lighting the city with electric light through the department of public safety, and not through the department of public works, and that all the advertising for proposals to light the city in that manner, the acceptance of bids, and the awarding of contracts was proceeded with and completed through that department. And it was also alleged and proved that all the payments for moneys due by the city under said electric lighting contracts, were made by ordinances of councils, duly approved for that purpose in extinguishment of the liabilities of the city thus created. And it was also fully averred and proved that for many years extending as far back as to 1868, the subject of electricity was committed to a department called the department of police and fire alarm telegraph, and that ever since that time that department has had the care and management of the police and fire alarm telegraph, and of all telephone — 627 — and telegraph poles, wires and fixtures, and of underground electrical conduits, wires, pipes and cables belonging to the city. That by an ordinance’approved July 11, 1884, the name of department of “ police and fire alarm telegraph ” was changed to the “ electrical department,” and by ordinance approved December 80,1884, the sum of 886,417.60 was appropriated to said department for lighting certain streets named therein with electric lights, and that similar appropriations were made in increasing sums for the years 1885 and 1886 for the same purpose. That by the terms of the act of 1885, called the Bullitt bill, it was provided that henceforth there should be a department of public safety and that, “the care, management, administration and supervision of the police force, and all matters relating to the public health and the fire and police force, fire alarm telegraph, erection of fire escapes, and the inspection of buildings and boilers, markets and food sold therein, shall be in charge of this department. It is certainly true that by ordinance of December 30, 1886, section 8, it was ordained that the department of public works should embrace “ the erection of public lamps and the lighting and care of same, whether gas, gasoline or electric lights,” but it is also true that by the same ordinance, section 3, it was enacted that the department of public safety “ shall embrace the present departments of police, health, fire, electrical, erection of fire escapes, etc.” By ordinance of June 29, 1889, it was ordained that there should be established in the department of public works a bureau having charge of the lighting of the city to be known as the bureau of lighting. By ordinance of March 30,1883, the whole subject of laying of conduits, tubes or pipes for electrical conductors, cables or wires, was committed to the department of “ police and fire alarm telegraph.” By ordinance of February 16, 1886, it was ordained “ that the chief of the electrical department be, and he hereby is authorized to issue permits for the erection of such electric light poles and wires as may be required for the lighting of the public streets.” In the mean time the ordinance of July 11, 1884, had changed the name of the “ department of police and fire alarm telegraph ” to “ electrical department ” and when the ordinance of February 16, 1886, which was enacted in the year following the passage of the Bullitt bill of 1885, went into — 628 — effect, it followed, that the subject of street lighting by electricity was committed to the electrical department which was then a department of the department of public safety. It naturally resulted that in the ordinances making appropriations for electric lighting during the years 1885,1886, and 1887 the appropriations were all made to the electrical department. During the years 1888 to 1893, inclusive, the appropriations for lighting the city with electric lights were included in the appropriations made to the department of public Avorks. Beginning with the year 1893, the ordinances for each year, until and including the year 1899, appropriated the moneys to be paid for electric lighting of the streets to the department of public safety, and during all that time the whole business of the electric lighting of the city was conducted by that department. The manner in which, and the reasons why, the changes were made in the administration of the electric lighting of the city streets were fully explained in the testimony of Daniel R. Walker who was the chief of the electrical bureau. He testified that he had been connected with that bureau for forty-two years. He was asked, “ Q. Explain to the court what is the character of the electrical bureau ? A. It is a bureau established for the purpose of taking charge of the supervision, maintenance and construction of all city service, as well as all other service in the city, telephone, telegraph, electric light, trolley and all other electrical constructions. They supervise the erection and maintenance on the highways. Q. Is there in any other bureau or department in the city the facilities which are provided by your bureau ? A. There is none that have any facilities of the kind. . . . . Q. You stated you were connected Avith the electrical department for a number of years. During all the time that the city has been contracting for electric lights have they been under the supervision of your bureau? A. Yes ; the entire service since 1883. Q. Even during the time when they introduced appropriations to the department of public works for the bureau of public lighting did your department have superintendence of the electric lighting? A. Yes, sir. Q. It was not done through the department of public works ? A. No sir; the location of lights, the maintenance of lights, and everything pertaining to it was under the supervision of the electrical bureau, other than the drawing of the warrants — 629 — from 1888 to 1894. That is, the electrical bureau handled the whole thing. Q. Your bureau is an aid or adjunct to the police and fire department of the city is it not ? A. Yes, sir. Q. And the police and fire houses are lighted through your bureau, and by these companies, is that so? A. Yes, sir. Q. So that it becomes absolutely necessary for your bureau to take charge of that in connection with the police and fire departments of the city ? A. - It does, undoubtedly; having all the facilities and the experts in electrical matters to take charge of it. Q. Are there any facilities in the department of public works or bureau of lighting for knowing as to the electric lighting or the manner in which it is performed, or ,controlling it? A. There is nothing, only the information they obtain from the electrical bureau. Q. There is no force and no facilities in the bureau of lighting for doing that work, is there? A. When electric lights are established, the electrical bureau reports to the bureau of lighting the location of lamps that have been put up so that they can remove or extinguish gas lamps in the vicinity. Q. So that the department of public works has never had anything to do with the electric lighting but drawing the warrants for pay during the few years that the appropriation was made to that department; is that so ? A. That is so. ... Q. In your department is the police and fire alarm telegraph service, is it not? A. Yes; and telephone service and supervision of trolleys and supervision of everything erected on the highways. Q. It has been so there how long ? A. Ever since it was established. Q. Iiow long is that ? A. Since April 19, 1856. Q. And it so continues to-day? A. Yes; only the name is changed. First it was police and fire alarm telegraph, and then electrical department, and now electrical bureau. . . . Q. Ever since 1894, when the contracts have been bid for, what department of the city has been awarding the contracts ? A. The department of public safety. Q. That has been uniformly the case ? A. Yes, sir. Q. And the councils appropriated the money requisite to pay those contracts ? A. Yes, sir. Q. And the contracts have been signed by whom? A. By the director of public safety. . . . Q. Did you refer to the executing of the contract ? A. To the awarding.” It would seem from the foregoing testimony, which was not at all contradicted, that the whole business of electric lighting — 630 — of the streets of the city was conducted through the electrical bureau, and that this was a matter of necessity, because there was no other department that possessed the indispensable facilities for transacting that kind of business. It appears also that the electrical bureau was no more than a change of name for the original police and fire alarm telegraph, which always was, and still is, a department of the department of public safety. It is not easy to understand why the appropriation for electric lighting was diverted to the department of public works by the ordinance of June ^9, 1889, for that was all the change that was made upon this subject. That ordinance created a bureau of lighting but did not define the functions of that bureau, and there was much other lighting than by electricity which was provided for such as gas, gasoline, naphtha, etc. It is true the appropriations were directed to be made by transfers in the appropriations to the department of public works, but the ordinance contained nothing which changed in any respect the functions of the police and fire alarm telegraph or of the electrical bureau. The ordinance of December 30, 1886, in its 3d section ordained that the department of public safety should “ embrace the present departments of police, health, fire, electrical,” etc., and, in its 8th section directed that the department should embrace “ the erection of public lamps and the lighting and care of same whether gas, gasoline or electric lights ” etc., but in no way interfered with or changed the previous association of the police and fire alarm, and electric bureaus with the department of public safety. There is an apparent inconsistency in the provisions of these two sections of the ordinance, though if it were of any great importance, it might well be argued that the provision of the 8th section really was confined to “ the erection of public lamps and lighting and care of the same,” which would not necessarily include lamps erected by other companies who might furnish electricity from poles, wires and lamps erected by themselves. In other words while the erection of public lamps by the city and their care and use, was strictly provided for as something to be done through the department of public works, the purchase of electric light from other sources was something not provided for by the words of the 8th section and therefore remained with the electrical department as provided by the Ed section. — 631 — It is not of sufficient consequence however to follow out this line of thought, as it will be readily seen that there might easily exist a contrariety of opinion as to which one of the two great departments of public safety, or public works, possessed the preliminary jurisdiction of conducting the bidding for the contracts. Even conceding that it belonged to the department of public works to advertise for proposals and determine the bids, the same work could be far better done by the department of public safety which possessed all the facilities for conducting that part of the business, and it would amount to nothing more than an irregularity in the method of proceeding prior to the preparation and execution of the contract which must be signed by the mayor and countersigned by the controller, in any event. Such irregularities do not present any sufficient reason for enjoining those officials from performing their duties in the execution of the contract. We had this subject before us in the ease of City of Phila. v. Gorgas, 180 Pa. 296, where a contract for paving was signed by the mayor when it was perfectly clear that it should have been signed by the director of the department of public works, and under the express terms of the law the mayor was not authorized to sign it. The absolute execution of the contract is a much more important matter than the question as to which department should advertise for proposals and accept the bids, yet even that defect in the proceedings was held to be only an irregularity. We held that the matter of the signature was not a jurisdictional fact, and hence the signing by the wrong official was not a fatal objection but only an irregularity of which third persons could not be heard to raise questions as between the city and its contractors. We said: “ There is no provision avoiding the contract unless it is signed by the officer authorized to make the same, and hence the case falls within the line of decisions where the defects in the contracts are irregularities only, and as to these the rule is perfectly well established that third parties are not permitted to raise questions between the city and its contractors.” Precisely the same consideration applies to the present case. There is no provision in the Bullitt bill or in any of the ordinances which relate to the subject, avoiding the transaction if the preliminary advertisements for proposals and acceptance of bids are conducted by the wrong department, and where it is certain — 632 — that it does belong to one of these two departments, and highly probable that it really belongs to the department of public safety in any event, it is perfectly manifest that whether it was done by one or the other is not a jurisdictional question and therefore is. not open to controversy by third persons. The whole subject was fully considered and discussed in the opinion by Mr. Justice Woodwakd in the case of Fell v. Philadelphia, 81 Pa. 58, and the distinction clearly pointed out between those defects which were to be regarded as irregularities only and those which were jurisdictional and therefore fatal. There is no ordinance and no law which says directly that the department of public works shall advertise for proposals or determine the bids or award the contracts, and there is no allegation that there was. any defect or error in the advertising for proposals, or in the method of proceeding in conducting that part of the business. There is an allegation of fraud in fact in not awarding the contract to the lowest bidder and in the manner in which the bids were made, and this is the second objection urged against the validity of the proposed contract. The learned court below has found as a fact that there was no fraud or collusion on the part of the officers .of the municipality and has thus determined that question against the appellant. There is not even an averment in the bill that there was any fraud or collusion on the part of the director pf public safety or of the chief of the electrical bureau in considering the bids and awarding the contract, and the court also found that no fraud or collusion had been proven. Having carefully read the whole of the testimony we are obliged to say that we fully concur in that finding and that we can find no evidence in the case upon which to base such an accusation. The only other contention on behalf of the appellant is that the bids of the several electric companies were fraudulent because the Philadelphia Electric Company was the owner of the majority of the stock of all those companies and therefore controlled the bidding; that the Brush Electric Company to whom the contract was awarded was unable to comply with its bid, and that to enable it to comply it would have to use the plants of the other companies; that there was no real competition between the several companies in making their bi ds and that it was well known to the officials making the bids and also to the department of — 633 — public safety that there was no real competition except between the Philadelphia Electric Company and the Kensington Electric Company. When it is considered that the Philadelphia Electric Company was not a bidder at all, and the Kensington Company only bid for one district which only contained 878 lights out of a total number of 7,694 lights for the whole city, it is impossible to see how a conclusion of fraud can with any propriety be drawn from such premises. The whole argument in support of the allegation of fraud in the bids is based, not upon proof of actual fraud, but upon inferences of a fraudulent intent because the individual companies put in bids in their individual capacities, and because the bid of the Brush Company for the Kensington Company’s district was thirty cents per night, while the bid of the Kensington Company for that district was twenty cents. We cannot possibly assent to such an inference from such premises. What the city required was the lighting of the whole city, and it was the duty of the officials to determine what was the lowest responsible bid for all their requirements. It is no proof of fraud to show that in a bid in a single district, comprising less than one-twentieth part of the total number of the lights required, a lower price was bid by one company than the price named for that district in the bid that was accepted. If the aggregate of all the individual bids was greater than the single bid of the Brush Company for the whole it is difficult to see why the bid of that company for the whole is not lower than all other bids combined. There is certainly nothing illegal or fraudulent in each company putting in a bid for itself. Nor is there any propriety in an inference of fraud because one company which was not a bidder owns a majority of the stock of all the other bidding companies except the Kensington. Such ownership is authorized by law and is as consistent with absolute innocence of a fraudulent purpose as it is with guilt of such a purpose. The director of public safety testified that he accepted the lowest responsible bid for the whole contract and the figures bear him out in that statement. We concur with the learned court below in holding that the allegation of fraud in fact is not sustained. The assignments of error are all dismissed. Decree affirmed and appeal dismissed at the cost of the appellant.