Anderson v. Public Schools

• Decision Date: 14 May 1894
• Citation: 27 S.W. 610,122 Mo. 61
• Parties: Anderson et al., Appellants, v. Public Schools
• Court: Missouri Supreme Court

27 S.W. 610

122 Mo. 61

Anderson et al., Appellants, v. Public Schools

Supreme Court of Missouri, First Division

May 14, 1894

Appeal from St. Louis City Circuit Court.

Affirmed.

J. M Holmes for appellants.

This suit is brought for the purpose, not only of recovering the damages sued for, but for the purpose of testing the right of bidders under the circumstances detailed in the petition. It is not necessary to discuss the nature of the defendant corporation. It is clearly defined by the statutes and by many decisions of this court. That it had the power and authority to make contracts for the erection of buildings as set forth in the petition, will not be disputed. That it had the power and authority to make, for its own guidance and for that of persons dealing with it, the rules and regulations set forth in the petition, will not be disputed. R. S. 1889 sec. 8, page 2172. That all persons dealing with it had notice and knowledge of its powers in the premises, can not be disputed, the acts creating it being public statutes. R S. 1889, sec. 15, p. 2173. That it did make the rules and regulations set forth in the petition is admitted by the demurrer. Those rules are binding upon it in its dealings with others, and enter into and constitute a part of all proposals and contracts for the erection of buildings. 1 Morawetz on Private Corporations, sec. 501; see, also, authorities cited. It can, then, fairly be assumed that in advertising for bids for the erection of the building described in the petition, one of the conditions binding upon the defendant was, that the bid should be awarded to the lowest and best bidder. Now, the rights of the lowest bidder, providing he has duly complied with all the requirements of the proposal, are fixed and defined by many decisions. He acquires a right to the contract, and the contract can not be let to a higher bidder. If, in point of fact, it is let to a higher bidder the performance of it by such bidder will be enjoined. State ex rel. v. Trenton, 49 N. J. Law, 339; Mayor v. Keyser, 72 Md. 106. Again, in case the contract is let to one who is not the lowest bidder, and he actually performs it, he can not recover, as the contract is void. People ex rel. v. Gleason, 121 N.Y. 631. The lowest and best bidder acquires, by his bid, a vested right to the contract and to the emoluments and profits thereof. He has a right of action at common law for the profits which he would have earned by the performance. McNiel v. Chamber of Commerce, 154, Mass. 277; People v. Campbell, 72 N.Y. 496; People v. Thompson, 99 N.Y. 641. We do not for one moment deny the right of the defendant to reject all bids and advertise for new ones. That right is too clear for discussion. American Pavement Company v. Wagner, 139 Pa. St. 623; Walsh v. Mayor, etc., 113 N.Y. 142. To deny such a right would put the defendant at the mercy of a single bidder. It would deprive it of its right to abandon its project in case all bids were for an amount greatly above its expectations. It would force it to build or pay the profits accruing to the bidder, even in cases where building might be ruinous. Such is not our claim. We contend, however, and the decisions cited support the contention, that while the defendant had the undoubted right to reject all bids, whether such right had been reserved in the advertisement or not, it had not the right to reject the lowest of one set of bids and accept a higher one of the same set.

Charles B. Stark for respondent.

(1) When proposals to do public work are invited, no cause of action accrues to any bidder because of a refusal to accept his bid and award the contract to him. Coquard v. School District, 46 Mo.App. 6; 1 Dill. Mun. Corp. [4 Ed.], p. 546, sec. 470; 1 Add. Cont. [8 Ed.], *p. 15, foot p. 37; Smith v. Mayor, 10 N.Y. 504; State ex rel. v. Directors, 5 Ohio St. 234. (2) When an act is legal in itself, the motive with which it is done is immaterial. Hence the plaintiffs' case is not strengthened by the allegation that the defendant rejected the plaintiffs' bid arbitrarily, capriciously and through favoritism and bias. Barr v. Cubbage, 52 Mo. 404; Buford v. Packet Co., 3 Mo.App. 159; Chatfield v. Wilson, 28 Vt. 49; Mahan v. Brown, 13 Wend. 261; 2 Dill., Mun. Corp. [4 Ed.], sec. 987n.

Barclay, J. Black, C. J., Brace and Macfarlane, JJ., concur.

OPINION

Barclay, J.

Plaintiffs appealed from a judgment based on a ruling sustaining a demurrer to their petition.

The substance of their allegations is as follows:

Plaintiffs are copartners in the business of building. Defendant is a corporation, having charge and control of the public schools and school property in the city of St. Louis.

The defendant had a well known rule in regard to buildings by which it was provided that all new buildings, etc., should be "let by contract to the lowest and best bidder."

Defendant, being desirous of erecting a large school building to be known as the new high school, duly advertised for bids for the erection thereof. The advertisement was this:

"PROPOSALS FOR THE ERECTION OF THE NEW HIGH SCHOOL BUILDING ON GRAND AVENUE.

"Office of Board of President and Directors of the St. Louis Public Schools.

"St. Louis, August 28, 1891.

"Sealed proposals will be received at the office of the secretary on or before Monday, September 7, 1891, at 4 P. M. for the erection of the New High School on Grand Avenue.

"All bids are to be addressed to John W. O'Connell, Esq., chairman building committee, and must be accompanied by a certified check, payable to the order of 'Board of President and Directors of the St. Louis Public Schools,' or cash, amounting to $ 2,500, which is to be forfeited by the successful bidder if he fails or refuses within five days after the award of contract by this board, to enter into written contract, and furnish good and sufficient security for the faithful performance of the work.

"Plans and specifications can be seen at the office of Furlong & Brown, the architects, room 38, southeast corner of Broadway and Olive street.

"The board reserves the right to reject any or all bids. C. L. Hammerstein,

"Secretary Building Committee."

Plaintiffs submitted a bid (in accordance with the above advertisement) to build the proposed high school for $ 196,965. Defendant refused to accept the bid of plaintiffs; but "without cause, arbitrarily, and capriciously, through favoritism and bias," rejected it, and then accepted the bid of another for $ 197,000.

Plaintiffs alleged a loss of profits in the sum of $ 15,000, and prayed judgment, etc.

The above is a sufficient outline of the facts on which plaintiffs rely.

It is claimed by defendant, in support of the demurrer and of the judgment in the trial court, that, as the plaintiffs' bid related to public work, no action can be maintained for the refusal to allow plaintiffs to execute such work. The contention is that bids for public work are not governed by the general principles of the law of contracts.

We do not consider it necessary to examine into the soundness of that contention, as we think the ruling of the trial judge was obviously correct, even conceding to plaintiffs that the transaction should be treated as an ordinary one between individuals irrespective of the supposed public nature of its...