Menzl v. City of Milwaukee

• Decision Date: 04 October 1966
• Citation: 145 N.W.2d 198,32 Wis.2d 266
• Parties: Ludwig MENZL, d/b/a Menzl's Towing Service, Appellant, v. The CITY OF MILWAUKEE et al., Respondents.
• Court: Wisconsin Supreme Court

Page 198

145 N.W.2d 198

32 Wis.2d 266

Ludwig MENZL, d/b/a Menzl's Towing Service, Appellant, v. The CITY OF MILWAUKEE et al., Respondents.

Supreme Court of Wisconsin.

Oct. 4, 1966.

Murphy, Shapiro & Gorsky, Milwaukee, Carl L. Dubin, Milwaukee, of counsel, for appellant.

John J. Fleming, City Atty., Carl F. Kinnel, Asst. City Atty., Milwaukee, for respondents.

HEFFERNAN, Justice.

The city contends that the cost of the contract chargeable to city funds is less than $1,000.00, and, hence, by its terms, the bid ordinance, sec. 7.29, is not mandatorily applicable.

If the contract in question is not subject to the provisions of the bid section, the city is not bound by that type of procedure and even, after determining to invite bids, may reject any or all bids and ask for new bids, or may contract on the basis of reasonable business judgment with one who is not the low bidder. Cullen v. Rock County (1943), 244 Wis. 237, 240, 12 N.W.2d 38; 10 McQuillin, Municipal Corporations (3d ed.), pp. 272--274, sec. 29.31.

If, on the other hand, the towing contract can be left only pursuant to bid procedure, it is necessary to determine whether the commissioner has the discretion to award the contract to other than the low bidder--bearing in mind that Menzl was the higher of the two bidders.

Was bid procedure prescribed by Sec. 7.29

mandatory?

Sec. 7.29, Milwaukee city charter, insofar as it as pertinent to this case provides:

'All work and the purchase of all materials, supplies, and equipment, chargeable to any city fund, when the cost thereof shall exceed the sum of $1,000.00, except street cleaning, shall be let by contract, to the lowest bidder in the manner provided by Sections 7.23, 7.24 and 7.26 of the Milwaukee City Charter, 1934 compilation. * * *'

Appellant claims that in determining the amount of the contract the entire cost of the related governmental functions must be considered; in this case, all payroll and administrative expenses of the police department devoted to locating and investigating matters pertaining to abandoned, wrecked, disabled, stolen, or police-evidence vehicles, a sum clearly in excess of $1,000.00. We consider this argument devoid of merit. Only such costs that the city must pay for the performance of the contract should be considered and not the administrative cost of a function of the city. The bid statute is pertinent only to work not done by the city's own employees.

Menzl also contends that, since the gross proceeds of the sale of abandoned cars concededly amounts to more than $1,000.00, the contract is within the purview of sec. 7.29. We conclude, however, that the city attorney correctly points out that the dollar limit referred to in the ordinance must be chargeable to 'city funds.' The method of paying the tower is outlined in sec. 7.46 of the charter and is set forth in greater detail in the specifications that are of record. It appears that the towing contractor has first claim upon the proceeds after the payment of the cost of the sale. It is only after payment to the contractor that the balance is deposited with the city treasurer and paid to the general city fund. By the terms of the specifications and sec. 7.46, the contractor is given a vested right to a share of the proceeds equal to the contractual price of his services. In Pembar, Inc. v. Knapp (1961), 14 Wis.2d 527, 534, 111 N.W.2d 476, we held that separate museum funds were not city funds since they were not under control of the common council. We deem the same principle applicable here. The sum paid to the towing contractor upon the sale of abandoned or junked automobiles prior to deposit with the treasurer is not 'chargeable to any city fund.'

Appellant points out, however, that the city concedes that approximately $700.00 a year will be chargeable to a city fund for the towing of police-evidence vehicles and that, since this is a three-year contract, the cost is estimated to be $2,100.00, well in excess of the $1,000.00 proviso of sec. 7.29. The respondent city contends that the contract cannot be considered a three-year contract because the commissioner of public works is restricted in his authority to contract for the doing of any work in any one year to the sum appropriated for such work. In this case it appears that that $700.00 has been appropriated for 1966. The city relies on sec. 7.27 of the Milwaukee city charter, which provides:

'Contracts not to exceed appropriations. 7.27 The said commissioner of public works shall have no power, by contract or otherwise, to exceed in the doing of any work, in any one year, the sum appropriated for such work by the said common council, or by law, for such year.'

This section is not relevant to the purposes of sec. 7.29. Sec. 7.27 merely means that the commissioner of public works cannot in a single year subject the city to liability by contract that is in excess of the funds appropriated for a particular purpose in that year.

The basic ordinance that we must consider is sec. 7.29, which provides that contracts shall be let by bid 'when the cost thereof shall exceed the sum of.$1000.00.' (Emphasis supplied.) Respondent, in effect, contends that sec. 7.29 should be read, 'when the presently appropriated cost thereof' shall exceed the sum of $1,000.00. If such an interpretation, contrary to the plain meaning of the words used, were intended, it would have been easy enough for the authors of the charter ordinance to have said so. The expressly stated criterion for triggering the effect of sec. 7.29 is the 'cost' of the contract and not the amount of the appropriation. We consider that sec. 7.27 is merely declaratory of one facet of the common-law rule that one who deals with a municipality does so at his own risk and may be subject to any provisions of law that might prevent him from being paid by a municipality even though the services are rendered.

Respondent's interpretation is contrary to the purpose of the bid statute and the generally accepted rule as stated in 10 McQuillin, Municipal Corporations (3d ed.), p. 280, sec. 29.33:

'And where a municipality is prohibited from letting contracts involving an expenditure of more than a specified sum without submitting the same to competitive bidding, it cannot divide the work and let it under several contracts, the amount for each falling below the amount required for competitive bidding.'

It seems to be the position of the respondent that, although there is a master agreement that binds the bidder for a three-year period, a contract as defined in sec. 7.29 comes into fruition only as money is appropriated annually. Such interpretation would render sec. 7.29 substantially ineffective. It could readily be evaded either by dividing the work into a series of small contracts or, as the city attempts to do here, withholding the council's formal act of appropriation until after the contract is entered into on a non-competitive basis.

There is no intimation in respondent's argument that the city does not intend to pay the obligations under the contract as they accrue, and the evidence of record shows that the cost in the aggregate will exceed $1,000.00.

We conclude that the contract is one in which the cost chargeable to any city fund exceeds $1,000.00 and must be led only by the bid procedure specified in sec. 7.29 of the city charter and in the 'manner provided by Section(s) 7.23.'

Will mandamus lie in this case?

It is clear that the trial judge arrived at the decision to deny mandamus through an error of law. In his memorandum opinion he stated:

'A mandamus will lie, of course, when there is clear and satisfactory evidence that the Commissioner refused or failed to do that which he is required to do by law. His duty to act should be plain and clear either as an abuse of discretion or to perform a given act which it is his legal duty to perform.

'For the reasons previously stated by the court, namely, that the particular contracts which, in the opinion of this court, have not been shown to fall within the competitive bid provisions of the charter, statute and ordinance, no specific legal duty has been demonstrated to the satisfaction of the court by the proof required, and the * * * mandamus must be denied.'

However, our decision that the towing contract must be let only by bid procedures does not ipso facto determine that mandamus will lie. Mandamus is a discretionary writ. We said in State ex rel. Sullivan v. Hauerwas (1949), 254 Wis. 336, 340, 36 N.W.2d 427, 430:

'Mandamus is a summary, drastic and extraordinary writ issued in the sound discretion of the court. Although classed as a legal remedy, mandamus is equitable in its nature and its issuance is generally controlled by equitable principles. The rights of the public and of third persons may be considered.'

'The (trial) court has discretion as to the issuing of a writ of mandamus directed to a public officer. The order of the court will not be reversed except for abuse of such discretion.' State ex rel. New Strand Theatre Co. v. Common Council of City of Racine (1930), 201 Wis. 423, 425, 230 N.W. 60, 61.

Moreover, it is an abuse of discretion for a court to compel action through mandamus when the officer's duty is not clear and unequivocal and requires the exercise of the officer's discretion. Wisconsin Pharmaceutical Asso. v. Lee (1953), 264 Wis. 325, 58 N.W.2d 700; State ex rel. Drew v. Shaughnessy (1933), 212 Wis. 322, 249 N.W. 522, Anno. 90 A.L.R. 368; State ex rel. Adams County State Bank v. Kurth (1939), 233 Wis. 60, 288 N.W. 810. But it is equally well settled that a writ of mandamus will issue to enforce the performance of plain imperative duties of a ministerial character imposed on executive agencies. State ex rel. City of West Allis v. Zawerschnik (1957), 275 Wis. 204, 207, 81 N.W.2d 542; State ex rel. Krause v. Jones (1928), 196 Wis. 464, 220 N.W. 373. Furthermore, it is the proper remedy to compel public officers to perform their...