Sanitary District v. Lee

Mr. Justice Adams delivered the opinion of the court. At the threshold of the inquiry, the question is raised whether the Sanitary District has the power to erect, etc., a bridge, by way of compensation to the railroads, as provided in the several contracts with the railroad companies. Section 8 of the act under which the Sanitary District is organized provides: “ Such Sanitary District may acquire by purchase, condemnation, or otherwise, any and all real and personal property, right of way and privilege, either within or without its corporate limits, that may be required for its corporate purposes,” etc. It is contended that the power to make compensation by erecting a bridge, etc., can not, on well recognized principles of construction, be held to be included in the word “ otherwise,” but we do not find it necessary to base the right to so make compensation on the word “ otherwise ” in section 8. Section 17 of the act provides: “ When it shall be necessary, in making any improvements which any district is authorized by this act to make, to enter upon any public property, or property held for public use, such district shall have the power so to do, and may acquire the necessary right of way over such property held for public use in the same manner as is above provided for acquiring private property, and may enter upon, use, widen, deepen and otherwise improve any navigable or other waters, waterway, canal or lake; provided, the public use thereof shall not be unnecessarily interrupted or interfered with, and that the same shall be restored to its former usefulness as soon as practicable,” etc. • We can not concur in the contention of appellee’s counsel that the above quoted words, after the word provided, apply only to “ public property ” and not at all to “ property held for public use.” On the contrary, we think that, construing the language strictly and grammatically, the provision applies in terms to property held for public use. Railroads are public highways of. the State, and are so declared to be by the Constitution, (Const. Art. 11, Sec. 12), and the Supreme Court so holds, (C. & N. W. Ry. Co. v. City of Chicago, 140 Ill. 309), and the Federal Supreme Court holds the same, as' a proposition of general law and without reference to any constitutional provision. Cherokee Ration v. Kan- sas Eailway Co., 135 U. S. 642, 657; Smyth v. Ames, 169 lb. 466, 544. The railroads, being public high ways, are held for public use, and it is not contended that the acquisition by the Sanitary District of the right of way through the railroad property is not necessary. The tracks of the railroad companies are now constructed on the solid ground, which, in all human probability, is a permanent foundation; the foundation for the tracks proposed by the contracts with the companies, namely, a bridge to be properly and continuously maintained, is as near an approach to the present foundation as is perhaps practicable, and is, as we think, clearly within the power of the Sanitary District. Section 11 of the act provides : “ All contracts for work to be done by such municipality, the expense of which will exceed $500, shall be let to the lowest responsible bidder therefor, upon not less than sixty-days’ public notice of the terms and conditions upon which the contract is to be let having been given by publication in a newspaper of general circulation in said district, and the said board shall have power to reject any and all bids.” It is claimed by appellants’ counsel, but we can hardly think seriously, that this section does not apply to the contract for the work in question. The construction of the bridge is “ work to be done ” by the Sanitary District, in pursuance of its contracts with the railroad companies; the expense of it will greatly exceed $500; a contract for it is, therefore, within the very letter of the section, and it must be advertised and let as therein provided. In Littler v. Jayne et al., 124 Ill. 123, the court, commenting on a statute providing that certain public work should be let to the lowest responsible bidder, say: “ The object of the statute is, that there should be notice, in writing, of the work to be contracted for, given by publication, to secure full and fair competition and prevent favoritism.” In Wells v. Burnham, 20 Wis. 119, the court say: “ The law requiring contracts to be let to the lowest bidder is based upon public economy, and originated, perhaps, in distrust of public officers whose duty it is to make contracts.” Commenting on a similar statute, the court, in Boren et al. v. Commissioners, etc., held that the obvious policy and intention of the statute was to render favoritism impossible. In Mazet v. Pittsburgh, 137 Penn. St. 54S, an act of the legislature, and ordinances passed in pursuance thereof, provided that all contracts in excess of fifty dollars should be let to the lowest responsible bidder, on notice, etc. The court held : “ It can not be doubted that the true intent of the act of 1874 and the ordinances passed in pursuance thereof, regulating the awarding of public contracts, is to secure to the city the benefit and advantage of fair and just competition between bidders, and at the same time close, as far as possible, every avenue to favoritism and fraud in its varied forms.” Ib. 561-562. The Constitution of the State of Arkansas contains this provision : “ All contracts for erecting or repairing public buildings or bridges in any county, or for materials therefor, or for providing for the care and keeping of paupers where there are no almshouses, shall be given to the lowest responsible bidder, under such regulations as may be provided by law.” The court say: “ The constitutional. provision was designed to secure economy in the line of public improvements to which it relates. Extravagance therein might arise either from the inattention or incompelency of the contracting officer, and his consequent failure to obtain favorable offers for contracts, or it might arise from the corruption or favoritism of such officer, and his consequent refusal to accept favorable offers when made. To prevent extravagance from the first source, the plan of public letting is adopted; the public are Informed of contracts to be let, and its self-interest and rivalry are appealed to for proper offers upon them; to prevent extravagance from the latter source, all discretion is withheld from the contracting officer; he is bound to give the contract to the lowest bidder, and can not let it out for individual gain or as a reward" to another. The method prescribed is well understood, clearly defined, and of distinctive character, specially adapting it to a conservation of public interests. It embodies three vital principles: an offering to the public, an opportunity for competition, and a basis for an exact comparison of bids; and any statutory regulation of the matter which excludes or ignores either principle destroys the distinctive character of the system, and thwarts the purpose of its adoption. Any arrangement which excludes competition prevents a letting to the lowest bidder.” Fones Hardware Co. v. Erb, 54 Ark. 045. We are of opinion that the spirit and intent of section 11 of the act is that the Sanitary District shall so advertise the work to be let and invite proposals therefor, that nothing will be left to the discretion of the trustees, after the bids shall have been received, except to determine wlio is the lowest responsible bidder. The question who is the lowest bidder is determinable by a mere inspection of the bids, and involves no exercise of discretion, but only a comparison of figures. The bidder who has offered to do the work for the smallest sum is the lowest bidder, and as among bidders equally responsible, the work can not lawfully be awarded to one who is not the lowest bidder. The Supreme Court has reprobated, in no uncertain terms, the reservation of the decision of any matter material to a public work until after the making of a special assessment for the work, or the reception of bids for the contract. Foss v. City of Chicago, 56 Ill. 354, was an appeal from a judgment for a special assessment. The ordinance under which the assessment was levied provided that a certain street should “ be curbed with curb walls, filled and paved with wooden blocks, excepting such portions of the above described work which have already been done in a suitable manner,” thus reserving to the city authorities the determination of what part of the work had been done “ in a suitable manner,” instead of determining in the first instance the exact work to be done. The court held that this reservation vitiated the assessment and said : “It might be used as the instrument of favoritism in letting the contract for the work. Some parties might be made to understand that the portions of the work already done were not done in a suitable manner, and that it would all have to be removed, while others might be informed that if they got the contract the portions already done would be considered as done in a suitable manner.” The case has been approved and followed in a number of subsequent cases. In Ill. Gen. R. R. Co. v. Chicago, 144 Ill. 391, and Bradford v. City of Pontiac, 165 lb. 612, a reservation of the right to make changes in the work ordered was held to be illegal, and that an assessment for the work ordered was, by reason of said reservation, invalid. , Littler v. Jayne et al., 124 Ill. 123, was a bill filed by a taxpayer, on behalf of himself and all other, taxpayers of the State, to enjoin the State House Commissioners from making, signing or approving vouchers for any expense incurred under a contract for eight electro-bronze statues of public men of the State. One of the grounds for an injunction stated in the bill was that the contract was let without an advertisement for bids for the work as required by law. The statute in relation to the subject-matter required an advertisement for bids or proposals, and provided that the work should be let to the lowest responsible bidder. The court, after pointing out deficiencies in the advertisement and the specifications to which it referred, say: “ These were elements as to which there was necessity of information, in order for the making of any intelligent bid or proposal for doing the work.. This is not only obvious, but the whole testimony in the case, that of experts as ivell, is. that the advertisement, taken in connection with the plans and specifications and this elevation drawing, is wholly insufficient for the making of an intelligent bid for the construction of these statues in question; that in order to do that, verbal explanation, in addition, would be requisite. And it is insisted that that is sufficient, if the needed information might have been obtained through verbal explanations. To allow such resort to verbal explanations for information, at least to the extent that would be necessary in this case, would be inconsistent with the policy of the statute requiring public notice to be given of the letting of contracts for public work, and would tend to the admission of the mischief the statute was designed to remedy. The object of the statute is, that there should be notice, in writing, of the work to be contracted for, given by publication, to secure full and fair competition and prevent favoritism. Verbal explanations might vary with different persons, and thereby bidders be made to stand not on the same equality, and there might, in this way, be afforded an opportunity for the exercise of favoritism.” It appeared in the case that the commissioners did not decide as to the kind of metal which should be used in the making of the statues until after the bids had been receivéd, with respect to which the court say: “ How is it possible to regard the contract here as let in compliance with the statute requiring that all contracts for labor or materials shall be let after advertisement for bids for the same for thirty days, when the materials, the kind of which was of such vital consequence for the making of the contract in question, were not determined upon at the time of inserting the advertisement, and not until just before the opening of the bids and the letting of the contract ? How could work and materials not known and determined upon, be advertised and intelligently bid for ? The bid of Poulson & Eger was the only one made for the statues. The contract price, the proof shows, was some $2,800 or $3,000 more than the reasonable value. How could the kind of the material, the character of the work, who wras to furnish the models, as described in the contract, have been ascertained and settled upon except through private negotiation.” The ratio decidendi plainly is, that all matters material to the contract to be let must be determined before advertising for bids, and that the advertisement, including documents to which it refers, must give full and definite information of the precise work to be done as a basis for intelligent bidding. To the same effect are the following cases : Xneeland v. Furlong, 20 Wis. 480; Boren et al. v. Commissioners, 21 O. St. 311; People, etc., v. Board of Improvement, 43 N. Y. 227; Mazet v. City of Pittsburgh, 137 Penn. St. 548; Fones Hardware Co. v. Erb, 54 Ark. 645. In Boren v. Commissioners the advertisement was for furnishing all the materials except the brick, and performing all the labor except excavating, in the erection of a court house, according to plans and specifications, etc. Boren’s bid conformed to the advertisement, and was $12,894.29 less than that of another bidder to whom the contract was awarded on the alleged ground that the bid of the latter included the brick and the excavation (bids for which were not invited), and that, in the judgment of the commissioners, the cost of the brick and the excavation exceeded the difference between the bids. But the court held the award illegal, saying : “ Whether this be so, can not be determined without resort to evidence outside of the written proposal, and then must rest in parol and be uncertain, which is contrary to the manifest purpose of the act under which the whole business must be conducted.” In People v. Board of Improvement, supra, the statute authorized the board to make an improvement according to such plan as it might adopt, and provided that the work should be let, on published notice, to the lowest bidder, who would furnish security to the satisfaction of the board. The published notice invited proposals for paving Union street with Belgian, improved Belgian, Uicólson, and other improved pavements, according to plans and specifications. The court say : “ What followed might reasonably have been expected, and perhaps was what was intended by the board. It was impossible for the board upon a canvass of these offers to determine therefrom which was the lowest. This could only be determined by considering which kind of pavement proposed for was the most desirable and durable and advantageous for use, and to what extent superior to the others, and then comparing these with the like qualities of the other kinds, in connection with the cost of each, and from this determining which offer was really the most advantageous as a whole for the public. The act contemplated the performance of no such duty by the board. It designed to open no such way for the exercise of favoritism. It designed that the work should be competed for as to price by contractors, and that this should be done in such a way that the lowest bidder could be determined by calculation, without any exercise of judgment as to the relative advantages of different kinds of pavement.” What the board did in the present case is precisely what the court, in the case last cited, decided could not legally be done. The board decided, after all bids had been received, what design of bridge it would adopt, and based its award on considerations inadmissible at that stage of the proceedings. In Fones Hardware Co. v. Erb, 54 Ark. 645, the advertisement was: “ Sealed proposals, competitive plans and specifications will be received up to noon, April 7, 1891, for the construction of a foot, highway and street railroad bridge, to be built by Pulaski county, Arkansas, over the Arkansas river,” etc. The court held the advertisement defective and insufficient, under the constitutional provision quoted sufra, and say: “ There can be no intelligent bidding for a contract unless all the bidders may know what the contract is, and this can not be known unless the plan of the work to be contracted for, and the specifications according to which it is to be done, have been adopted; for they, with the price to be agreed upon, go to make up the contract.” Ib. 651. The court further say : “ When it is determined to build a bridge within a given time, and the location, plans and specifications have been adopted, all the terms of the contract are fixed, except the price to be paid; the obligation to build a bridge according to the terms thus fixed, is a thing to be offered to competition; and until it is formulated by the defining of those terms, so that they, in connection with the bid to be thereafter accepted, will comprise a complete contract, there is nothing to be let, and nothing to which competition can be directed. It is idle to talk of competition where the minds of bidders are not directed to the thing offered.” Ib. 654. In the present case the attention of bidders was invited by the advertisement to only two plans, one on the designs of C. L. Strobel, and the other on that of the Scherzer Polling Lift Bridge Company. It appears from the record, and is conceded, that a bridge built on the plan of the latter design will be much more expensive than one built on the plan of the former, and that the designs are essentially different. Therefore the adoption of the plan or design was matter material to the contract, and it was incumbent on the Sanitary District to adopt the plan or design before advertising for bids, and the adoption of it after receiving the bids, and the award based on such adoption, were illegal. Section 11 of the statute is stricter in its expressed requirements than was the statute commented on in any of the cases cited. It, in terms, requires public notice to be given “ of the terms and conditions upon which the contract is to be let.” The phrase “ terms and conditions ” embraces all of the contract. How is it possible to give notice of the terms and conditions upon which the contract is to be let, when the very plan on which the work is to be done is undetermined ? It is simply impossible. Appellants’ counsel rely mainly on Attorney-General v. Detroit, 26 Mich. 263, in support of their contention that the Sanitary District might lawfully reserve the selection of a plan until after the bids were received. In that case the city advertised for proposals for paving a street with either wood or stone pavement, according to specifications which had been filed in the comptroller’s office for each of several kinds of wood and stone pavements. Fifty-seven proposals were received, only two of which were for the Ballard patent pavement, and the contract was awarded to the bidder of the higher of the two bids. The court in its opinion held that the city might lawfully withhold its decision as to which pavement it would adopt, until after receipt of the bids; the court did not base its decision on that ground, but on the ground that the pecuniary interest of the public of the city of Detroit, represented by the attorney-general, was less than thirty dollars, the minimum of equitable jurisdiction as prescribed by the Michigan statute, and ^therefore that a case for the exercise of equitable jurisdiction was not presented. Ib. 273-4. The court expressly declined to decide whether the council was justified in rejecting the lowest bid. In so far as the court held that the city might reserve the decision of the kind of pavement it would adopt until after the bids were in, we regard the opinion as not in harmony with the current of authority in this and other States. The published notice, as in the case of Littler v. Jayne, supra, was not only calculated to deceive, but actually deceived bidders. It is evident from the affidavit of the seven trustees in support of the answer of the Sanitary District, five of which seven cast the majority vote in favor of the Scherzer Eolling Lift Bridge Company design, that the board intended from the first to adopt either that design or the Strobel design, and also that in soliciting bids for any other design which might be approved by the railroad companies, they merely intended to induce competition by the owners of such other designs, and thus perhaps induce lower bids by the owners of the Strobel and Scherzer designs. Bids were invited “ according to one or the other of two sets of plans furnished by the Sanitary District on the respective designs of C. L. Strobel and of the Scherzer Eolling Lift Bridge Company,” etc., thus, as we think, plainly holding out to the public and to contractors, that the plans mentioned were equally acceptable to the district, and that a bid on either plan would be considered as in competition with any bid on the other. It is significant that this was the understanding of Mr. Eandolph, the chief engineer of the Sanitary District, and who had been closely associated with the board of trustees during the entire consideration of the matter. His tabulated statement of bids, made in obedience to the order of the board, is thus headed : “ The bids in detail for erecting sub and superstructure of eight track railroad bridge across main channel of Section O, near Campbell Avenue, excluding operation of bridge.” “ In order of magnitude. Lowest bid first. Opened June 25, 1898.” Under this heading the bids follow, commencing Avith the lowest bid, that of Strobel, $235,424.50, then following with the next higher, and in that order to the last, Avhich is the highest. Erom this it is apparent that Mr. Eandolph’s understanding was, that the competition invited by the advertisement was a competition merely between amounts bid, and not competition as between designs. As said in People v. Board of Improvement, supra, “ what followed might reasonably have been expected, and perhaps was what was intended by the board.” Ho two bids were of the same design with the partial exception that the King Bridge Company bid on the superstructure of the Scherzer Bolling Lift Bridge Company’s design, but not on the substructure, whereas bids were invited on the sub and superstructure both, and not on each of them separately. There was not, therefore, in fact, any competition as between designs. It is difficult to understand the following clause of the advertisement, except on the hypothesis stated in substance in the affidavit of the seven trustees, that they never intended to adopt any design except that of Strobel or the Scherzer Bolling Lift Bridge Company: “ Tenders will also be received upon any other design which may be submitted in competition with the two before-mentioned designs, provided such tenders are accompanied by written approval and acceptance from each óf the three railroad companies interested in this structure; and further provided, that in its design, workmanship, strength and quality of material it conforms to the requirements of the Sanitary District of Chicago.” There is no requirement of the Sanitary District as to a design referred to in the advertisement, except that the work must be in accordance with one or other of two sets of plans on designs essentially different, and it does not appear, and certainly is not probable, that a bridge constructed on a design different from the designs mentioned in the advertisement, namely, the Strobel and Scherzer Company designs, could be constructed on a set of plans prepared for and adapted to either of said two designs. H„o plans being referred to except the plans of the Strobel and Scherzer designs, to which bidders could have access, it necessarily follows that bids on other designs were limited to the owners of the designs, thus resulting in inequality between bidders. Also, the trustees not knowing what other designs might be bid on, could not and did not publish the terms and conditions on which a contract for any of such other designs would be let. A2DpelIants’ counsel say that no fraud is charged in the bill. This is not necessary to appellee’s case. It is not even necessary to appear that there was actual or intentional fraud. It is enough if it appears that, by a violation of the statute, an opportunity for fraud or favoritism was created. In Foss v. Chicago, supra, the court, referring to the reservation of the right to decide what portion of the work ordered had been done in a suitable manner, say: “ It might be used, and it does not affect the principle whether it was so used or not, as a cover to an unfair estimate of assessment,” and again, “ it might be used as the instrument of favoritism in letting contracts for the work.” The order will be affirmed. Mb. Pbesiding Justice Windes. I concur in affirming the order of injunction, but am of opinion that while it is a proper subject for decision, it is not necessary to the decision of this case to decide, as is done by Mr. Justice Adams in his opinion, that it was the duty of the Sanitary District trustees to decide, in advance of an advertisement for bids, that they would build a bridge according to one particular design and advertise for bids on that design alone. As to whether this was the duty of the trustees I am in doubt, and do not therefore assent to that part, though I concur fully in the remainder of the opinion. Had the advertisement made it clear that the trustees sought bids u2")on each of the Strobel, Scherzer and other designs, clearly and specifically described, so that all bidders could tell what design and all the designs there were open to competition, and which were accompanied by plans and specifications applicable to each of such designs, and also made clear that designs as well as bids were in competition, then I am inclined to the view that there Avould have been much fuller and fairer competition than was given by the advertisement in this case. The notice given, so far as it refers to other designs of bridge than the Strobel and Scherzer designs, did not, in my opinion, comply with the law which requires that notice be given of the terms and conditions upon which the contract is to be let. It can not be a compliance with the law as to terms and conditions upon which the contract will be let when the notice leaves it uncertain and unknown to all bidders as the one at bar does, as to what designs, outside of the two named, are competing, and what would be the plans and specifications with reference to which the contract would be let, in case any other than the Strobel or Scherzer design should be selected by the trustees. / To have a full and fair competition as to designs, as well as bids, it is highly important that all persons desiring to bid should know each of the designs in competition and the plans and specifications that accompany each design, so that if a bidder wishes to bid on each design he may know the terms and conditions of the contract, if a particular design should be selected, and also when the bids on that design are opened, it may be known by a mere comparison of figures whether he is or is not the lowest bidder.