Johnson City v. Carnegie Realty Co.

• Decision Date: 18 November 1933
• Parties: JOHNSON CITY v. CARNEGIE REALTY CO. et al.
• Court: Tennessee Supreme Court

64 S.W.2d 507

166 Tenn. 655

JOHNSON CITY v. CARNEGIE REALTY CO. et al.

Supreme Court of Tennessee.

November 18, 1933

Certiorari to Court of Appeals.

Suit by the City of Johnson City against the Carnegie Realty Company and others. A decree in favor of the complainant sustaining the bill was affirmed by the Court of Appeals, and the defendants bring certiorari.

Decree of the Court of Appeals reversed, and the suit dismissed.

Williams Miller & Winston and Miller, Miller & Martin, and Glenn M Elliott, all of Johnson City, for defendants Carnegie Realty Co. et al.

SWIGGART Justice.

This is an original bill by the city of Johnson City against owners of property abutting Oakland street, to enforce special assessments levied to pay the cost of paving the street. The chancellor's decree sustaining the bill was affirmed by the Court of Appeals, and the case is before us by certiorari, granted on the petition of the defendants.

The assessments sought to be enforced were levied by authority of Acts 1907, chapter 276, a special act limited in its application to Johnson City. This act authorizes the creation of "improvement districts," in which pavements sidewalks, and sewers may be constructed at the joint expense of abutting property and the city. Section 12 directs the legislative body of the city to cause to be prepared plans and specifications for the proposed improvement, and to advertise two weeks for sealed bids therefor. If no satisfactory bid is obtained, the city may "by ordinance" determine to construct the improvement under its own supervision. By section 16 it is provided: "All improvements authorized by this Act shall be constructed under contract with the lowest responsible bidder, except as herein otherwise provided after the notice for sealed bids hereinbefore set forth." The city's failure to comply with these requirements is urged by the defendants as invalidating the assessments.

The improvement district for Oakland street was created pursuant to a petition signed by the owners of more than 51 per centum of the property to be affected, in October, 1923, as required by section 2 of the Act of 1907 (as amended by Priv. Acts 1917, c. 88). Some of the defendants to this suit were signers of that petition. Advertisement for bids was made on November 30, 1923, fixing December 21, 1923, as the date for the opening of bids and the letting of the contract. On that date, the bid of the Municipal Paving Company was the only bid received, and a contract was awarded that company for unit prices which, according to the city engineer's estimate, aggregated about $19,000.

But notwithstanding the apparent regularity of the advertisement for sealed bids, and the award of the contract on December 21, the proof shows without contradiction that the Municipal Paving Company, which was paving other streets in Johnson City at the time, began the work of paving Oakland street in November, and by December 1 had done work estimated by the city engineer to be of the value of $8,000, more than one-third of the total. Of this sum $7,400 was paid early in December. The chancellor found that on January 1, nine days after the contract was awarded, the engineer estimated that the work completed amounted in value to $18,000, practically all.

From this it appears that the Municipal Paving Company had completed a substantial portion of the work when advertisement for bids was first made, and that the work was at least more than half completed when the date for awarding the contract arrived. The mayor and city engineer, in office when the work was done, testified without offering any explanation for the facts disclosed.

The chancellor gave it as his opinion that these facts amounted only to an irregularity and did not amount to a "total" failure to comply with the statutory requirement that the work be done on contract awarded after notice for competitive bidding. In our opinion, the failure to comply with the statute was worse than "total." Observing the forms prescribed, the city pursued a course which made it impossible for any other contractor to make a bona fide bid to do the work. The purpose of making the advertisement could only have been to deceive; to make it appear on the record that the work was done after the contract had been awarded on the date fixed by the advertisement for bids, when in fact it was begun before that date, and necessarily under some undisclosed agreement as to what the contractor's bid should be. The chancellor surmised that the motive of the city officers was to avoid delay, because the street was in bad condition. But the record fails to disclose, and we think it immaterial, what the motive was. The only reasonable inference of fact is that, under the circumstances stated, the improvement was not only done by private contract, but a culpable effort was made to conceal the...