Brutsche v. Inc. Town of Coon Rapids

• Decision Date: 14 March 1936
• Docket Number: No. 43158.,43158.
• Parties: BRUTSCHE et al. v. INCORPORATED TOWN OF COON RAPIDS et al.
• Court: Iowa Supreme Court

220 Iowa 1295

264 N.W. 696

BRUTSCHE et al.

v.INCORPORATED TOWN OF COON RAPIDS et al.

No. 43158.

Supreme Court of Iowa.

Jan. 14, 1936.

As Modified on Denial of Rehearing Mar. 14, 1936.

Appeal from District Court, Carroll County; M. E. Hutchison, Judge.

A suit to enjoin the construction of an electric light plant by a municipality purporting to act under the authority of the Simmer Law (Code 1931, 6134-d1 et seq.), upon the claim that the provision of that law for letting contracts by competitive bidding was not complied with. From the decision of the lower court in favor of the defendants, the plaintiffs appeal.

Reversed.

Salinger, Reynolds & Meyers, of Carroll, Graham & Graham, of Jefferson, and Harry Wifvat, of Perry, for appellants.

William L. Hassett, of Des Moines, for appellee Fairbanks-Morse Const. Co.

Helmer & Minnich, of Carroll, and George A. Rice, of Mapleton, for other appellees.

ALBERT, Justice.

This case is somewhat related to the case of Brutsche v. Incorporated Town of Coon Rapids, reported in 218 Iowa, 1073, 256 N. W. at page 914. The fact situation is partially related in that case, and need not be elaborated here.

Briefly stated, in February, 1934, the town held an election to determine whether or not a municipal electric light and power plant should be established and constructed by the municipality. The proposition was carried, and in pursuance of the power there conferred and in accordance with the statute, a resolution was passed by the council to adopt the plans and specifications and the form of contract then on file with the clerk of the town council. The power conferred by the election on the town of Coon Rapids, according to the question submitted to the voters, was derived from the following form of ballot:

“Shall the town of Coon Rapids, Carroll County, Iowa, establish, erect and construct a municipal electric light and power plant at a cost of not to exceed the sum of $114,000.00, to be paid out of the future earnings of said plant?”

Advertisement was duly made calling for bids on the proposed improvement. Several bids were submitted, among others that of the defendant Fairbanks-Morse Construction Company, and after said bids had been received and considered, an alleged contract was entered into between the town and the Fairbanks-Morse Company; whereupon this action was instituted by the plaintiffs, alleging, among other things, that said contract was invalid because, under it, negotiable bonds or pledge warrants were issued in the sum of $98,690, with 6 per cent. interest payable semiannually, running over a series of years, and that the said company retains the title and ownership of all of said property until the said sum of $98,690, together with all the interest, shall have been paid in full, and therefore the contract is invalid as being in excess of the authority granted to said town by the electors. It is further alleged that said contract does not comply with the plans and specifications as adopted by said town, in that (a) the specifications and notice to bidders were for a three-unit plant, while the contract proposed was to supply a two-unit plant; (b) under the specifications and notice to bidders, the engines supplied were to be guaranteed with respect to fuel oil consumption and also as to lubricating oil consumption, and said contract does not contain any such guarantee; (c) according to the specifications and notice to bidders (treating the specifications on file as a part of the notice to bidders), specific provision was made as to the time of the commencement and completion of said proposed plant, subject only to delays beyond the control of the contractor, while the alleged contract specifically provided: “In the event any suit, action, or other legal proceedings in which the legality or validity of this contract or of the proceedings preliminary to and authorizing the same shall in any manner be brought in question, shall be filed or pending, the time for commencement or completion of delivery and installation of said machinery and equipment shall be extended during the period while said suit, action or other proceedings shall be pending and until the same shall be finally adjudicated * * * ;” (d) the specifications and notice to bidders provided for a trial run and test of not less than eight hours to be run in the presence of the town council or engineer, or both, under such loading conditions and at such hours as the town engineer might direct, and that such test was to be made a basis for the approval of the installation by the town engineer and the acceptance of the installation by the council, whereas the alleged contract provided that the test should be conducted by the engineer of the defendant company, who should have entire charge thereof, and guarantees of duty were specifically limited to the operation of said machinery at a test conducted by the engineer of the defendant company. The town must request such test within ten days after the machinery was put in operation on penalty of having the guarantees made null and void and the machinery considered as accepted by the municipality. The specifications that were adopted as part of the contract were not specifications furnished by the town, on which all bidders were expected to base their bids, but were specifications furnished by the defendant company, and differed in many respects from those furnished by the town and on which bids were to be based. Hence, free competition was not had, as the call for bids was on the plans and specifications filed with the town clerk, and not on those furnished by the Fairbanks-Morse Construction Company.

It is because of these matters that the plaintiffs insist that the contract under assault here is invalid.

[1][2] 2. Numerous questions are raised as to whether or not the contract is responsive to the call. Among other provisions is one that the bid and contract must fully respond in all material respects to the call or invitation. This has been the previous pronouncement of this court in the Carroll Case (Urbany v. City of Carroll), 176 Iowa, 217, 157 N.W. 852, and the Grand Junction Case (Iowa Electric Light & Power Co. v. Incorporated Town of Grand Junction), 216 Iowa, 1301, 250 N.W. 136, where it is said that unless the bid responds to the proposal in all material respects it is not a bid at all, but a new proposal. We think this fully settles the law of this...