Marshall & Bruce Co. v. City of Nashville

• Decision Date: 24 January 1903
• Parties: MARSHALL & BRUCE CO. v. CITY OF NASHVILLE.
• Court: Tennessee Supreme Court

71 S.W. 815

109 Tenn. 495

MARSHALL & BRUCE CO. v. CITY OF NASHVILLE.

Supreme Court of Tennessee.

January 24, 1903

Appeal from chancery court, Davidson county; H. H. Cook, Chancellor.

Bill by the Marshall & Bruce Company against the city of Nashville. From a decree of the court of chancery appeals reversing a decree of the chancellor in favor of complainant, complainant appeals. Decree of chancellor affirmed.

John Allison and Vertrees & Vertrees, for appellant.

K. T McConnico and Hill McAlister, for appellee.

WILKES J.

This is a bill against the mayor and city council of Nashville to recover $83.05 and interest for stationery furnished and printed for the city. The city concedes that the account is correct as to items and amounts, but declines to receive the goods and pay the bill therefor on the ground that the stationery does not bear the union label of the Nashville Allied Trades Council, or the label enacted by the International Typographical Union.

It appears that on December 11, 1897, the city council of Nashville passed the following ordinance:

"Section 1. Be it enacted that all city printing shall bear the union label of the Nashville Allied Trades Council or the label enacted by the International Typographical Union.

"Sec 2. That this ordinance shall take effect from and after its passage, the welfare of the city requiring it."

It appears further that in February, 1901, the city, being in need of blank books and stationery over the value of $50, solicited competitive bids therefor, specifying what was desired, and complainant, being the lowest bidder, was awarded the contract to furnish the goods, and, under its bid and contract, manufactured the articles specified, according to specifications, and delivered some of the letter heads embraced in the order in March, 1901. After the manufacture of all the items specified, and the advance delivery of the letter heads mentioned, the city notified complainant that it would refuse to receive the goods upon the sole and only ground that they did not bear the union label prescribed by the ordinance, and refused to pay for the goods for the same reason, and thereupon relet the work to the Brandon Printing Company at an advance price of 38 1/2 per cent. The bill is filed to recover the amount of complainant's bill, and to have the ordinance in question declared unreasonable, null, and void. The city insists upon the validity of the ordinance, and that complainants knew of its existence when they made their bid, and agreed to abide by it in the event the contract was awarded to them, and upon both grounds deny any right of recovery. The chancellor heard the case on proof, and held the ordinance null and void because in conflict with the provisions of the charter of the city, and gave complainant judgment for the amount of the bill and costs. The city appealed, and in the court of chancery appeals assigned two errors: First, that the chancellor erred in holding the ordinance void, and that it was not in the power of the city to pass the same; second, that, even if the ordinance be held void, the complainant nevertheless agreed to place the union label upon the stationery, and was bound by its agreement, and, unless complied with, it could not recover.

The charter of the city requires that all goods and supplies furnished the city, amounting to over $50, must be let out at competitive biddings to the lowest responsible bidder. We are of opinion that the ordinance in question is clearly in conflict with the spirit, purpose, and letter of the charter, and is invalid and void. It is, morever, class legislation, contrary to public policy and to the constitution of the state, because plainly discriminative in its character. All the authorities to which we have access so hold in regard to similar ordinances and statutes, and we have been able to find none to the contrary. We cite the following from among many others: Davenport v. Walker (Sup.) 68 N.Y.S. 161; Holden v. City of Alton (Ill.) 53 N.E. 556; City of Atlanta v. Stein (Ga.) 36 S.E. 932, 51 L. R. A. 335; Adams v. Brenan, 177 Ill. 194, 52 N.E. 314, 42 L. R. A. 718, 69 Am. St. Rep. 222; Fiske v. People (Ill.) 58 N.E. 985, 52 L. R. A. 291; State v. Loomis, 115 Mo. 307, 22 S.W. 350, 21 L. R. A. 789; In re Jacobs, 98 N.Y. 98, 50 Am. Rep. 636; People v. Gillson, 100 N.Y. 389, 17 N.E. 343, 4 Am. St. Rep. 465.

We give a short synopsis of several cases, to illustrate the holdings:

Holden v. City of Alton (Ill. April 17, 1899) 53 N.E. 556: The charter of the city of Alton provided that all printing and contracts for stationery should be let to the "lowest bidder" unless the amount of the contract price was under $10. Charles Holden proposed at a competitive bidding, under seal, to print certain bonds for the city for $18.25. The Sentinel-Democrat Printing Company bid $22.85 for the same work. An ordinance was pending before the council, but had not become a law, to the effect that no city printing should be let to any one who could not furnish the union label. Mr. Holden could not, but the Sentinel-Democrat Printing Company could. The letting of the contract was delayed until the ordinance could be passed. This being done, the contract was let to the Sentinel-Democrat Printing Company, and the bid of Holden refused, solely and alone on the ground that he could not show the union label. Holden was a stationer of good standing, entirely responsible, and a taxpayer of the city. He filed a bill to enjoin the Sentinel-Democrat Printing Company from carrying out the contract, and the city from paying him therefor. Nothing had been done in that direction when the bill was filed, but pending the final decision the city paid him anyway. The court held that the fact that Holden was a bidder did not impair his right to bring the bill as a taxpayer. The court further said that, even if the ordinance had been approved before the bidding, the case would not have been altered; that the statute or charter required the contract to be let to the lowest bidder; and that this "implied equal opportunity and freedom in all who might choose to bid." The court said that, while in many cases there might be ground for the exercise of discretion, here there was no attempt to exercise any discretion as to the qualification or facilities of bidders, and that a refusal upon the ground upon which Holden was refused was "merely the imposition of a greater burden on the taxpayers, through an attempted abuse of power." As the money was paid after the bill had been filed, restitution to the city was directed.

City of Atlanta v. Stein (Ga. Aug. 9, 1900) 36 S.E. 932: The charter of Atlanta does not require the public printing to be let to the lowest responsible bidder, but leaves to the municipal authorities a wide discretion. An ordinance was passed by the city requiring all printing used by the city to bear the union label, and directing all advertisements soliciting bids to so state. Printing was advertised for, it being stated that no bids could be accepted for printing which could not bear the union label. There were 4 union and 15 nonunion printing establishments in Atlanta at that time. The nonunion men were not allowed to bid, and evidence was introduced tending to show that they could have bid less than the lowest union bid. The work was awarded to the Pease Printing Company, a union establishment. Thereupon Mr. Stein filed a bill, as a citizen and taxpayer, to enjoin the execution of this contract. The injunction was granted upon the ground that the ordinance was void because it tended to defeat competition and encourage monopoly. The court said that it was "not within the power of municipal authorities to enact legislation of this kind." This ordinance cut off the power to fully and freely exercise the discretion which the public good required to be exercised, and it was therefore void. The injunction was granted.

Adams v. Brenan, 177 Ill. 194, 52 N.E. 314, 42 L. R. A. 718, 69 Am. St. Rep. 222: The board of education in Chicago entered into an agreement with a workingmen's union, known as the "Building Trades Council," to the effect that the board would insert in all contracts for work on school buildings a provision that union men only should be employed by contractors to work on such buildings. A schoolhouse needing repair, the board advertised for bids; inserting in the advertisement a clause to the effect that none but union labor should be employed. One Knisely put in two bids. One was for $1,900, with the right to use either union or nonunion labor, and the other was $2,090, and use union labor only. The board accepted the higher or "union" bid. J. L. Adams, a taxpayer, thereupon filed a bill against Knisely and the board to enjoin the execution of the contract. The injunction was granted, although the work had been begun under the contract. The court held that, even if the provision had been inserted pursuant to an act of the legislature, it would be void; that such an act would be unconstitutional, because it would be an infringement upon the constitutional right of the citizen, and tended to create a monopoly and to restrict competition in bidding for work. The contract was in effect an expenditure of public money for the benefit of a private organization or labor union.

Recently this identical question arose in that state. An ordinance was passed by Chicago to the effect that every bidder upon public work should agree to use only union labor, and that the contract made in pursuance of such bids should so provide. The ordinance was declared to be void as discriminating between different classes of citizens, and as restricting competition and increasing the cost of public work. Fiske v. People (Ill.) 58 N.E. 985, 52 L. R. A. 291. A...