Yarnold v. City of Lawrence

The opinion of the court was delivered by Brewer, J.:

Plaintiffs in error, plaintiffs below, brought their action in the district court of Douglas county, seeking to restrain the defendants from selling their property for the non-payment of certain special taxes, and obtained, without notice, a temporary injunction. Subsequently upon motion the injunction was dissolved, and this ruling is the matter brought here for review. Two or three important questions-are presented. One, and perhaps the most important, is this: The tax in dispute was for the pavement of Massachusetts street in the city of Lawrence with the Wyckoff pavement. It is insisted that this pavement, being covered by a patent, excludes competition, and that therefore the city which was by law obliged to let all contracts to the lowest bidder, had no power to let a contract for such an improvement. The right of a city to avail itself of patented inventions in the improvement of its streets, etc., where the law required the letting of contracts to the lowest bidder, has been before the courts of several states, and the adjudications thereon are not uniform. In Wisconsin, California and Louisiana, the right has been denied; while in Michigan and New York it has *130 been sustained. Dean v. Charleton, 23 Wis. 590 ; Nicolson Pavement Co. v. Painter, 35 Cal. 699 ; Burgess v. Jefferson City, 21 La. An. 143; Hobart v. City of Detroit, 17 Mich. 246 ;. Matter of Anthony Drugro, 50 N. Y. 513 . These cases are alike in these matters, that in each the precise question was as to the power of the city to charge the cost of the improvements on the adjacent lots, and also that the city was expressly required to let the contract to the lowest bidder. They differ in these respects: In Wisconsin, it is provided that the estimates of total cost and expense to each lot shall be filed in the office of the city clerk, time fixed for doing the work, and notice thereof given to the lot-owners. If the work is not done by the lot-owners within that time, then it may be let by contract to the lowest bidder. In California, the bids are opened and the work awarded to the lowest responsible bidder. Then notice is published of the award, and the owners of a major portion of frontage may take the contract upon the same terms. If they fail to take the contract within the specified time, it is then finally given to the party to whom it was first awarded. In both these states, therefore, it will be noticed that special provision is made for securing to lot-owners the 'privilege of doing the work themselves, a privilege the courts consider of no value if the contemplated improvement is covered by a patent, and can only be made by the patentee, or such person as he chooses to permit. In Louisiana, the court notices and lays stress on the fact that the city may, under the general grant of power to improve, etc., avail itself of any patent by making the cost of such improvement a charge on the general funds of the corporation, and is only restricted to contract with the lowest bidder when it seeks to throw the cost of the improvement on the adjacent lot-owners; while in New York and Michigan there is a general restriction on the power of the city to enter into contracts above a specified amount without letting them to the lowest bidder — thus, as the courts say, if the doctrine announced in the other courts be correct, cutting off the city from the right to avail itself of those improvements *131 in pavements, sidewalks, etc., which the genius of our inventors is constantly discovering, until after the expiration of the patents therefor. The question is a doubtful one, and one on which courts will continue to differ. The writer of this opinion is inclined to favor the views of the courts in Michigan and New York upon this question. There is however such a distinction between the case before us, and those cited, as will enable us to dispose of it without definitely deciding this question. In each of those cases there was an express direction, that the contract be let to the lowest bidder, and upon that rested the argument of the courts. Here, there is no such express direction; nor is it, we think, necessarily implied from any of the express directions. Sec. 31, of ch. 19, Gen. Stat.' of 1868, p. 169, is the section from which the implication is claimed. That section provides that, prior to any contract the city engineer shall make and submit to the council an estimate of the cost, and that in advertising for bids the amounts of such estimate shall be published. Counsel contend that the city is required to advertise for bids, and that therefore when the bids are received, she must let to the lowest bidder. We dissent from both premise and conclusion. The section does not declare that before any contract is let an advertisement shall be made for bids. It simply says that “ in advertising for bids,” certain things shall be published. Requiring, that when an advertisement is made, certain things shall be published, is by no means equivalent to requiring that advertisements be made in all cases. We see no reason to doubt the right of the city under that section to make a valid contract without any advertisement. Nor does it necessarily follow from the fact of an advertisement for bids, that the contract must be let to the lowest bidder. There is a strong implication that such ought to be the result, but it is not the necessary legal conclusion. We think therefore that the contract in question must, under the law in force at the time it was made, be sustained.

Another important question is, as to the power to pay and to contract to pay for such improvements in bonds. The *132 contract provided for the payment in bonds, one-third payable in one year, one-third in two, and the balance in three years, and the entire transaction from the first resolution of the council to the acceptance of the work seems to have proceeded upon the idea of payment in such manner. It is earnestly contended that this was beyond the power of the city. By paragraph 38 of § 30 of the act of 1868, incorporating cities of the second class, Gen. Stat. 166, such cities are authorized “to issué from time to time, street bonds to contractors * * * on such terms and in such manner as the council may provide.” This, it is contended, is limited by a clause in § 32 of same act, which declares that “the mayor and council shall have no power to sell or dispose of scrip, orders, or bonds at less than ninety cents on the dollar.” If the city may legally contract for labor to be paid for in bonds, this prohibition is practically nullified, and the city disposes of its bonds at just such a value as the contractor places upon them. Therefore, all contracts must be made upon the basis of payment in cash, though after the debt has been contracted, it may be settled by the city, by the issue of its bonds therefor at ninety cents on the dollar. But § 30 was repealed in 1871, (Laws 1871, p. 166, § 81,) and in lieu thereof upon this matter this was enacted:

“The assessments (those like the one in question) shall be known as special assessments for improvements/ and except as hereinafter provided shall be levied and collected as one tax. * *• * But the mayor and council shall have power to issue the bonds o'f the city for the costs of paving, * * * to be made payable as follows: one-third of the aggregate amount of such bonds of any issue in one year; * * * and for the payment of said bonds assessments shall be made in each year,” etc. Laws of 1871, p. 149, §17.

Now the purpose and scope of this enactment was to grant authority to a city to distribute over three years the burden of street improvements. That being the obvious purpose, it is both fair and legal that the city should contract with reference to this authorized mode of payment. It is just to the lot-owners, that they may know whether to encourage or ob *133 ject to the proposed improvement, for they might well object to that the cost of which must be met in a single, year, when they would gladly indorse the same work if they could have three years in which to pay for it. It is just to all bidders for the contract, for often the time and manner is as important as the fact and amount of the payment. It must be borne in mind that these bonds are to be paid in the same way, and out of the same property, as though the improvement was paid for in a single year, and by one assessment. So that though these instruments issued.to the contractor are called bonds of the city, yet they are not like ordinary obligations, primarily chargeable upon its entire property, while the “scrip, orders, and bonds “spoken of in § 32 are doubtless its ordinary and general obligations. We think therefore that the city might legally contract for the street improvement upon the basis of payment in the manner provided in the contract before us. It would seem therefore to follow, that all the other proceedings, including the estimate of the engineer required by §31, (Gen. Stat. p. 169,) should.be had upon the same basis. These are the principal questions in the record as presented by counsel, and in them appearing no error, the judgment will be affirmed.

It is understood that the same questions are involved in the case of McCurdy v. The City of Lawrence, and therefore the same judgment must be entered in that case.

All the Justices concurring.