R. S. Noonan, Inc. v. School Dist. of City of York

• Decision Date: 30 June 1960
• Citation: 162 A.2d 623,400 Pa. 391
• Parties: R. S. NOONAN, INC., Appellant, v. SCHOOL DISTRICT OF CITY OF YORK, Pennsylvania, and Buchart Engineering Corp.
• Court: Pennsylvania Supreme Court

162 A.2d 623

400 Pa. 391

R. S. NOONAN, INC., Appellant, v. SCHOOL DISTRICT OF CITY OF YORK, Pennsylvania, and Buchart

Engineering Corp.

Supreme Court of Pennsylvania.

June 30, 1960.

Arthur Markowitz, James E. Buckingham, Markowitz & Kagen, York, for appellant.

K. F. Ralph Rochow, Carl R. May, Ports, May, Beers &amp Blakey, York,Donn I. Cohen, Cohen, Senft & Rubin, York, for appellees.

Before CHARLES ALVIN JONES, C. J., and BELL, MUSMANNO BENJAMIN R. JONES, BOK and EAGAN, JJ.

MUSMANNO, Justice.

Prior to October 31, 1957, the School District of the City of York advertised for competitive sealed bids from contractors wishing to vie for the erection of a new school building to be known as the Hannah Penn Junior High School, all bids to be submitted no later than 4 p. m. of that day. When the bids were opened that evening, R. S. Noonan, Inc., was revealed to be the lowest bidder. However, on November 7, 1957, the Board of Directors of the School District, by unanimous vote rejected all the submitted bids, and authorized its architect, the Buchart Engineering Corporation, to advertise for new bids which would be opened on November 30, 1957.

On that date, the contracting firm of I. Reindollar & Son emerged as the lowest bidder and was awarded the contract for the erection of the new school building. R. S. Noonan, Inc., then brought a bill of complaint in the Court of Common Pleas of York County, praying that the School District and the Buchart Engineering Corporation be ordered to award the contract for the new construction to the plaintiff and be required to pay such damages as it had suffered in the premises.

The defendant entered preliminary objections and as a result the plaintiff filed an amended complaint, to which the defendants offered still further preliminary objections which, insofar as they are here material, were in the nature of a demurrer. The Court sustained the demurrer and the plaintiff appealed.

The plaintiff contends that the School District of York was guilty of bad faith, arbitrary action, and abuse of discretion in rejecting its bid. The plaintiff submits that its bid was not unreasonably high, it was within the amount appropriated by the Board for the project, there was no collusion among the bidders, and the project was not to be abandoned, postponed or altered in any way. Thus, it argues, there was no justification for rejection of its bid, with those of the others, and the ordering of new bids.

The plaintiff stands on the Public School Code, Act 1949, P.L. 30, amended by Act of 1957, P.L. 775, Sec. 751, 24 P.S. § 7-751(a), which provides:

'All construction * * * upon any school building or upon any school property, made by any school district, where the entire cost, value or amount of such construction * * * including labor and material, shall exceed one thousand dollars ($1,000), shall be done under a contract or contracts to be entered into by such school district with the lowest responsible bidder, upon proper terms, after due public notice has been given asking for competitive bids * * *. The board of school directors shall award the contract or contracts to the lowest responsible bidder or bidders * * *.' (Emphasis supplied.)

However, the statute does not vest in a disappointed low bidder a cause of action, but gives to the public, in a taxpayer's suit the right to demand that the lowest responsible bidder be awarded the contract. This principle of law was well summarized in 43 American Jurisprudence, Public Works and Contracts, Paragraph 65:

'Such a statutory provision, enacted as a protection to the public, cannot be used to make disobedience of its provisions by public officers a double source of punishment to the public body; if the low bidder is permitted to maintain such an action then this obedience of the statute would make the public body pay the difference between the lowest bid and the bid for which the contract was made, and also the profit that the lowest responsible bidder would have made if the statute had not been violated. And when a public official in good faith refuses to award a contract the bidder has no right of action against him for damages although his bid is the lowest, and it has been held that no right of action exists even though the public authorities acted maliciously.'

As early as 1876, this Court held in the case of Commonwealth ex rel. Snyder v. Mitchell, 82 Pa. 343, that a disappointed bidder has sustained no personal injury which entitles him to redress in Court. If these be a loss in such a situation, it is the loss of the public:

'By their bid they (Snyder & Co.) proposed to contract for certain work; that bid was not accepted. It was a mere proposal that bound neither party, and as it never was consummated by a contract, the city acquired no right against the relators nor they against the city. Snyder & Co. are wanting in a specific...