Bourne v. Sullivan

• Decision Date: 28 December 1962
• Citation: 104 N.H. 348,186 A.2d 834
• Parties: James P. BOURNE et al. v. James B. SULLIVAN et al.
• Court: New Hampshire Supreme Court

Page 834

186 A.2d 834

104 N.H. 348

James P. BOURNE et al. v. James B. SULLIVAN et al.

Supreme Court of New Hampshire.

Argued Nov. 7, 1962.

Decided Dec. 28, 1962.

J. Francis Roche, City Sol., for plaintiff city treasurer.

Peter J. Bourque, Manchester, for defendant Finance Commissioners.

Sheehan, Phinney, Bass, Green & Bergevin, Manchester, for defendant Albert Poisson.

The plaintiff creditors furnished no briefs.

DUNCAN, Justice.

The Manchester Finance Commission was established in 1921 by legislative act (Laws 1921, c. 226), the constitutionality of which was determined in Amyot v. Caron, 88 N.H. 394, 190 A. 134. See also, Attorney General v. Bond, 81 N.H. 269, 124 A. 553. Section 6 of the statute charges the Commission with 'general supervision and control over the expenditure of all money appropriated by [the] city.' It authorizes the Commission to make 'such rules and regulations to govern purchases, sales, payments, fixing of salaries and wages, the letting of contracts by all city departments * * * officials or agents as they may deem necessary to insure economy and efficiency.' The Commission is also invested with investigatory powers for the purpose of reporting its findings to the board of mayor and aldermen 'as a basis for such laws, ordinances or administrative orders' as the mayor and board might deem necessary. Ss. 3, 4.

In Kearns v. Nute, 94 N.H. 217, 220, 50 A.2d 426, the provision for 'general supervision' was considered to give the Commission power to cause the laws of the city to be executed and to set on foot appropriate proceedings if violations were discovered. Its authority to issue regulations and to 'control' expenditure of appropriated funds is not questioned in this action. Poisson v. Manchester, 101 N.H. 72, 133 A.2d 503. See also, Laws 1949, 411:1; Laws 1957, 434:1.

It is not disputed that the checks upon which payment was stopped by direction of a majority of the commission were issued 'to either city officials or to firms or corporations in which said city officials have an interest' in payment of obligations incurred without public notice or competitive bidding, with the exception of one account which has since been paid.

Section 34 of chapter 8 of the Manchester Ordinances, adopted in 1925, provides as follows: 'It shall be unlawful for any commission, board of trustees, aldermanic committee or other official of the city of Manchester having the custody or expenditure of any monies appropriated by the city to enter into any contract with or purchase any article or service from any member of any commission, board of trustees, alderman or other city official of the city of Manchester unless the same be done by competitive bidding after due public notice.'

In 1941 the Legislature adopted 'an act to prevent public officials from buying property from themselves for the city, county or state,' which now appears in RSA ch. 95 (Laws 1941, c. 85). The act, which carries a maximum penalty of a five-thousand-dollar fine and compulsory removal from office, provides as follows: 'Public Officials Barred From Certain Private Dealings. No person holding a public office, excepting only members of the general court, as such, for which remuneration in the form of wages, salary, or per diem is paid, in city, county, or state governmental service shall, by contract or otherwise, except by open competitive bidding, sell or buy goods, commodities, or other personal property of a value in excess of twenty-five dollars at any one sale to or from the city, county, or state by which said official is paid.' RSA 95:1.

In 1950, pursuant to Laws 1921, c. 226, s. 6, the Finance Commission adopted a regulation which provided that the Commission would neither authorize nor consider valid 'payments for contracts of any kind, leases, sales and purchases of property or other expenditures in excess of $300 unless the requirements with respect to competitive bidding have been observed.' It had previously issued a regulation requiring that 'unless the competitive bidding procedure is waived' by the Commission, solicitation of bids should be published in a newspaper when materials or services of a value in excess of $300 were sought.

Although one purpose of the pending action is to adjudicate the validity of the Manchester ordinance, supra, the parties also seek a determination under the provisions set forth above, of the status of the creditors involved, and in particular of the status of 'firms or corporations' in which city officials have an interest.

The various enactments brought to our attention by these proceedings illustrate the difficulties commonly encountered in the field of regulation of conflict of interest. The problem is difficult of satisfactory legislative solution; and the standards which are imposed by statute or regulation need to be understandable not only to enforcing authorities, but also to officials whose conduct is to be governed by them. Note, Conflict of Interest, State Government Employees, 47 Va.L.Rev. 1034, 1060, 1076 (1961).

The case requires some preliminary analysis of the several enactments before us, viewed in perspective. The regulations of the Finance Commission based on Laws 1921, c. 226, supra, to achieve 'economy and efficiency' (s. 6) are of general application, requiring open competitive bidding upon all transactions obligating the city where the amount involved exceeds $300, regardless of whether the party dealing with the city is or is not an official thereof or related in some way to such an official.

The city ordinance adopted in 1925, would require competitive bidding regardless of the amount involved, but is sharply limited to transactions between officials of the city, where one of them has 'the custody or expenditure' of appropriated funds.

The statute of 1941 (RSA ch. 95), if literally interpreted, is sufficiently broad on its face to require competitive bidding in any transaction by any compensated city official which involves a value of more than $25. If this was the purpose of the Legislature, then the provisions of the 1925 ordinance would clearly be invalidated because inconsistent with this statutory requirement. State v. Paille, 90 N.H. 347, 9 A.2d 663. We do not consider however that the application of the statute was intended to be as broad as a literal reading of its operative provisions might indicate. Opinion of the Justices, 75 N.H. 613, 615, 72 A. 754.

While the title of the original act (Laws 1941, c. 85, supra) referring to 'officials * * * buying property from themselves for the city' has been discarded in compilation of the statutes, RSA ch. 95 is entitled: 'Personal Interest in Business Transactions With Public'; and the section which forbids transactions without competitive bidding retains its original title: 'Public Officials Barred from Certain Private Dealings.' (Italics supplied). The statute is a criminal statute, carrying severe penalties for violation, including loss of office. RSA 95:2. See Catalfo v. Cotton, 104 N. H.----, 184 A.2d 907. It is not to be extended beyond its fair import and alleged violators are entitled to the benefit of any substantial uncertainties in meaning. State v. Williams, 92 N.H. 377, 379, 31 A.2d 369. While the title of the act and of section 1 are not conclusive of its interpretation (Vera Chemical Co. v. State, 78 N.H. 473, 475, 102 A. 463), they are significant when considered in connection with the legislative history of the act, and ambiguities inherent in its language. See State v. Faro, 118 Conn. 267, 171 A. 660; Brown v. Robinson, 275 Mass. 55, 175 N.E. 269; 2 Sutherland, Statutory Construction (3d ed.) s. 4802.

The act originated as a bill to prohibit, without exception, all sales in excess of $25 in a year by any officer drawing compensation from the city. H.B. 143 (1941 Session). The bill was revised in new draft, and thereafter subjected to several amendments, so that it was applicable to both sales and purchases, 'any one' of which should exceed $25, and to persons holding public office except members of the General Court 'as such,' unless there was 'open competitive bidding.' House Journal March 19, 1941, pp. 442-444, 447. We are therefore of the opinion that RSA 95:1 was intended to prohibit compensated officials of a city acting as such from dealing with themselves as individuals except upon open bid, where more than $25 is involved in the particular transaction.

In the light of the foregoing discussion, the regulations adopted by the Finance Commission are necessarily inconsistent with the provisions of RSA 95:1 only to...