East Bay Garbage Co. v. Washington Tp. Sanitation Co.
| Decision Date | 02 October 1959 |
| Docket Number | S.F. 19950 |
| Court | California Supreme Court |
| Parties | EAST BAY GARBAGE COMPANY (a Corporation), Appellant, v. WASHINGTON TOWNSHIP SANITATION COMPANY (a Corporation), Respondent. |
Quaresma & Rhodes and Fred E. Avera, Fremont, for appellant.
LeRoy A. Broun & Associates and Bernard M. King, Fremont, for respondent.
Plaintiff sought (1) an injunction restraining defendant from soliciting customers and from collecting and disposing of garbate within the former boundaries of the Irvington Sanitary District and (2) damages and loss of profits. Defendant cross-complained for similar injunctive relief against plaintiff, plus damages for alleged infringement of defendant's rights in this area. The cause was submitted upon an agreed statement of facts. Judgment was entered on defendant's cross-complaint, with the proviso that the court, pursuant to the parties' stipulation, reserved the determination of the amount of damages until disposition of this appeal. We have concluded that the record sustains the propriety of the relief awarded defendant.
On February 17, 1955, the Irvington Sanitary District published a notice soliciting proposals for the collection and disposal of garbage within the district for a 10-year period under an exclusive contract establishing a schedule of fees to be paid the garbage collector by those inhabitants of the district utilizing the garbate collector's services. Only one publication of the notice was made. Within the time allotted, both defendant and plaintiff's predecessor submitted bids. Defendant proposed to pay the district $1.50 a year for each unit serviced. At the time there were approximately 1500 units within the district requiring service, so that defendant's proposal, in effect, would amount to the payment of $2,250 a year. Plaintiff's predecessor offered to pay the district a flat sum of $1,200 a year for the first five years of the contract and $1,800 a year for the second five years. On March 8, 1955, the Irvington Sanitary District awarded the exclusive contract to plaintiff's predecessor. Admittedly, the contract was not let pursuant to section 6515.5 of the Health and Safety Code.
On January 23, 1956, the city of Fremont was incorporated and its territorial limits include the then existing boundaries of both the Irvington Sanitary District and the Union Sanitary District. On February 9, 1956, the city of Fremont adopted an ordinance (No. 15) prohibiting any person from collecting garbage within the city limits unless that person had either a contract with the city or a valid, subsisting contract with the Irvington Sanitary District which was in effect on January 24, 1956. On March 27, 1956, the Irvington Sanitary District was consolidated with and became a part of the Union Sanitary District.
On April 10, 1956, the city of Fremont awarded defendant an exclusive 10-year contract for the collection of garbage 'within the corporate limits of the City of Fremont and areas to be annexed to said City, with the exception of such portions of said annexed areas as are serviced under a pre-existing legally binding contract with a legally constituted public body and with the further exception of the area included within the Irvington Sanitary District.' This language pertaining to the exception of 'the area included within the Irvington Sanitary District' was properly construed by the trial court in the light of the other provisions of the contract and of the provisions of the above-mentioned Ordinance No. 15. So construed, the trial court correctly concluded that it gave defendant the right to collect garbage within that area unless the area was then 'serviced under a pre-existing legally binding contract.' To construe the exception more broadly, and without regard to said Ordinance No. 15, would mean that in the absence of a 'pre-existing legally binding contract,' the area in question would have been left without any garbage collection service, a result which could not reasonably have been intended. Both plaintiff and defendant have continuously collected garbage within the area which formerly comprised the Irvington Sanitary District.
From these facts the trial court concluded that section 6515.5 of the Health and Safety Code applied to the 'franchise and exclusive contract' of plaintiff's predecessor with the Irvington Sanitary District; that said section required the district to publish a notice requesting bids once a week for two consecutive weeks and to award the contract to the lowest responsible bidder; that since the fees to be charged the residents of the district were all uniform, the 'lowest responsible bidder' was the bidder who would pay 'the largest sum to the district for the right and privilege of collecting and disposing of garbage within its boundaries for a fee'; that since said section was not complied with, 'plaintiff's franchise and exclusive contract is null and void and plaintiff can predicate no rights under it'; that because it is 'null and void,' defendant can attack its validity in an action for an injunction where defendant can show a legal right to collect and dispose of garbage in the area in question; that since plaintiff does not have a contract with the city of Fremont and the contract of plaintiff's predecessor with the Irvington Sanitary District is void, Ordinance No. 15 of the city of Fremont prohibits plaintiff from collecting and disposing of garbage within the city limits, including that portion of the city which formerly comprised the Irvington Sanitary District; that defendant's April 10, 1956, contract with the city gives it the exclusive franchise and right to collect and dispose of garbage within the mentioned area; and that defendant is entitled to damages for loss of profits as well as an injunction restraining plaintiff from collecting garbage within the city's corporate limits. Judgment was entered accordingly, and plaintiff appeals.
The principal question presented is that of the applicability of section 6515.5 of the Health and Safety Code relating to contract awards by a sanitary district. (Sanitary District Act of 1923, Health & Safety Code, §§ 6400-6915.) That section, at the time here involved, read as follows: 'If the total cost of any work exceeds two thousand five hundred dollars ($2,500), the district shall publish a notice requesting bids therefor by publication for once a week for two consecutive weeks in a newspaper of general circulation in the county in which the district is located and award the contract to the lowest responsible bidder. * * *
'If more than one bid is received, the board shall award a contract, as specified in the notice requesting bids, to the lowest responsible bidder. * * *
'Any contract to which this section applies that is not let pursuant to this section is void.'
Plaintiff contends that this section was not applicable to the contract between its predecessor and the Irvington Sanitary District because the contract did not involve the expenditure of public moneys--that is, the district's payment of moneys from its...
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