Murphy v. City of Greensboro

• Decision Date: 14 October 1925
• Docket Number: 387.
• Citation: 129 S.E. 614,190 N.C. 268
• Parties: MURPHY ET AL. v. CITY OF GREENSBORO ET AL.
• Court: North Carolina Supreme Court

129 S.E. 614

190 N.C. 268

MURPHY ET AL. v. CITY OF GREENSBORO ET AL.

No. 387.

Supreme Court of North Carolina

October 14, 1925

Appeal from Superior Court, Guilford County; McElroy, Judge.

Action by T. J. Murphy and others against the City of Greensboro and others. From a judgment sustaining demurrers to complaint plaintiffs appeal. Reversed, and demurrers overruled.

Demurrer referring to city charter not made part of complaint cannot be considered.

The action was brought to enjoin the execution of a contract between the city and the Murray Construction Company, or, if already executed, to have it canceled and declared void.

The material allegations of the complaint may be condensed and summarized. Plaintiffs reside and have property in the city of Greensboro, which is a municipal corporation governed by a board of seven councilmen and the city manager, and the Murray Construction Company is a corporation organized under the laws of Tennessee. The city manager is active in the conduct and management of the affairs of the city, including its contracts. The governing body resolved to pave certain streets covering a distance of 6 1/2 linear miles, at a cost of several hundred thousand dollars. The city manager and some of the members of the city council took the position that they could award the contract for paving these streets to the Murray Construction Company without public notice or advertisement as provided by C. S. § 2830, to which other members of the council did not agree; but the mayor councilmen, and city manager were advised that it would not be lawful to award the contract without giving the statutory notice. It has been the custom to give such notice by repeated advertisement in two of the city papers--such notice having been given on one or more occasions in the Manufacturers' Record, and in papers published outside the state, for the purpose of increasing competition. On March 13, 1925, the following notice was inserted one time in the Greensboro Daily Record, an afternoon paper of local circulation:

"Street Paving.

Proposals will be received by the city council of Greensboro, North Carolina, until 2:15 o'clock p. m., Tuesday, March 24 1925, for the paving and work incidental thereto on certain streets in the city of Greensboro, North Carolina. Plans and specifications may be obtained by applying to George E. Finck, highways engineer, city hall, Greensboro, North Carolina.

Each bid must be accompanied by a certified check in the sum of $7,500, made payable to the city of Greensboro, North Carolina, which will be forfeited if contract is awarded and the contractor fails to sign the contract.

All bids shall be sealed and marked on the outside 'Bid for Street Paving,' addressed to P. C. Painter, city manager, Greensboro, North Carolina.

The bids will be opened publicly and read at the city hall on Tuesday, March 24, 1925, at 2:15 o'clock p. m.

The city reserves the right to accept or reject any or all bids.

G. E. Finck, Highways Engineer.

P. C. Painter, City Manager."

On the day named for opening the bids, the state highway commission received bids for the construction of highways to cost between one and two million dollars, and the defendants knew that many persons, firms, and corporations engaged in this work would then be in Raleigh. Lassiter & Co., a corporation organized under the laws of North Carolina, has for several years maintained an office in Greensboro, and to the knowledge of the defendants has been engaged in street paving and road construction in and near the city for a number of years, having a complete paving plant and organization. On the day named in the notice, Lassiter & Co. filed with the city council its sealed bid for the construction of the proposed work for $531,875 and its check for $7,500, together with a certificate from a responsible surety company that, if the bid were accepted, the required bond would be given. Lassiter & Co. was ready, able, and willing to complete the work according to the requirements and specifications and within the time named by the defendants. The Murray Construction Company also filed its bid, which was $566,502. This sum exceeded Lassiter's bid by $34,627. These two were the only bids.

At the time designated, the bids were opened and read, but the contract was not then awarded. Instead of then acting upon the bids received and passing thereon, and either accepting the lower bid of Robert G. Lassiter & Co. or rejecting both of the said bids, the said city council postponed action until the next day at 11 o'clock, pretending that it desired in the meantime to ascertain whether or not Robert G. Lassiter & Co. was in position to begin the work at once and to finish it within the time limit required, and the said city council instructed the city manager to make such investigation and report it at 11 o'clock the next morning, whereas in truth and in fact, as this plaintiff alleges on information and belief, the delay was for the purpose of devising some scheme by which the said city council could accept the bid of the Murray Construction Company and disregard the bid of Robert G. Lassiter & Co., which was the only competing bid, and which would have saved a large sum of money to the taxpayers of the city of Greensboro. That the final disposition of the said bids was delayed from time to time until Monday, March 30, 1925, and that in the meantime the Murray Construction Company was allowed to file with the said city council, or with some member thereof, a new and secret bid, which bid was not filed in accordance with the requirements of law, nor opened as provided by law. That on Monday, March 30th, as aforesaid, the said city council wrongfully and unlawfully awarded the contract to the Murray Construction Company, and thereby accepted, or attempted to accept, a bid filed and opened secretly and unlawfully and in violation of the law, and in contravention of the interests and rights of the citizens and taxpayers of the city of Greensboro, and this letting to Murray Construction Company was with a full knowledge on the part of the mayor and city council that between March 24 and March 30, 1925, tests had been made as to the sufficiency of some of the work theretofore done by Murray Construction Company and as to whether it complied with the specifications under which said work had been done, and that a number of such tests disclosed that the Murray Construction Company had not complied with its contract for said work, and that there were several streets on which the yardage, as claimed by Murray, did not check with the estimate of the city's engineers. Much of the work heretofore done by Murray Construction Company is not, to the knowledge of the mayor, city councilmen, and city manager, in compliance with the city's specifications under which said work was done, and this knowledge on the part of the mayor, city councilmen, and city manager was in their possession prior to March 30, 1925.

On March 26, 1925, Lassiter & Co. wrote the city manager a letter indicating its readiness and ability to comply with the proposed contract. Between the time of the filing and opening of the bids on the 24th of March, 1925, and the letting of the work to the defendant Murray Construction Company on the 30th of March, 1925, in some way it was arranged for the appointment of a committee of three, and that a committee of three was appointed consisting of City Manager Painter and two members of the city council to determine the award of the contract, with the agreement that all the councilmen should and would vote to let the contract for the construction of the said work as the said committee might report and recommend.

Between the opening of the bids on the 24th of March, 1925, and the meeting of the board of city councilmen at 2:30 o'clock p. m. on the 30th of March, 1925, either through the committee aforesaid, or at a secret meeting of members of the council of the city of Greensboro, or some of them, it was agreed to award this work to Murray Construction Company at the sum of $548,639, and at the meeting on Monday, March 30th, at 2:30 o'clock p. m., as aforesaid, the city councilmen, pursuant to their agreement to abide by the decision of the committee aforesaid, and by way of carrying out and giving effect to the secret agreement entered into by them prior to that time, in conjunction with defendant Murray Construction Company, unanimously voted to award this work to the said Murray Construction Company at the sum of $548,639, which was a mere formal vote, made in compliance with the terms of the secret agreement referred to, thereby unlawfully accepting an entirely new bid and at a new price, wrongfully and unlawfully disregarding the sealed bids, and accepting a bid not filed in accordance with law, in that, among other things, the same was not a sealed bid nor made in compliance with law regulating such matters, and was in excess of the bid of Robert G. Lassiter & Co. in the sum of $16,764.

The cost of the construction of the work hereinbefore referred to is in the first instance paid for by the defendant city out of funds raised by taxation or otherwise, which is in part recouped by assessments against abutting property. It was the intention of P. C. Painter, city manager, and one or more of the city councilmen, to let this work to the Murray Construction Company without any notice or advertisement for bids, and at a price not less than that for which the Murray Construction Company had been doing similar work for the said city, notwithstanding the fact that recently competition among persons, firms, and corporations engaged in the business of paving and...