Majority
p. 49THE CLEVELAND FIRE ALARM COMPANY against THE METROPOLITAN FIRE COMMISSIONERS. Supreme Court, First District; At Chambers, Oct., 1869.
Headnote
Injunction.—Public Contracts. —Advertisements eor Proposals.—Lowest Bidder.The provisions of chapter 308 of the Laws of 186!,—requiring all contracts made by or on behalf of the Mayor, &e. of New York to be awarded to
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the lowest bidder,—do not apply to contracts made by the Commissioners of the Metropolitan Fire Department, who are authorized by chapter 249 of the Laws of 1865, to make contracts for the city of Flew York . in reference to providing the instrumentalities for extinguishing fires.
A statute declaring that public contracts shall be given to the lowest bidder, should be construed in reference to the proper exercise of discretion on the part of the officers in whom the power to make it is vested, and in determining which of several bids is the lowest, the adaptability of the thing offered for the purposes for which it is required must be eon- I sidered.
An injunction does not lie, at the suit of one who is literally the lowest bidder, to prevent the carrying out of a contract with one who offers, at a higher price,' a thing which is by such officers, in the exercise of a sound discretion, deemed better for the purpose.
The Fire Commissioners of the Metropolitan District of Flew York advertised for proposals for a contract for furnishing a fire alarm telegraph in the city,"and the plaintiffs offered to establish one upon their plan for §275,000. Other bidders offered to establish one upon a different plan for §426,450.—Held, that the advertisement having reserved to the commissioners the right to reject any proposals which did not embrace a ■perfect and reliable system, and there being evidence to sustain them in <the opinion that the more expensive system offered was more desirable, •even at its price, than the other, the court would not interfere by injunc■tion to restrain the carrying out of a contract for the latter.
Motion for an injunction.
"This action was "brought by the Cleveland Fire Alarm ■‘Company against the Board of Metropolitan Fire Commissioners of the Metropolitan Fire Department, Charles T. Chester and John 1ST. Chester, to restrain the execution and performance of a contract about to be made by the Fire Commissioners with the Messrs. Chester rt) supply a fire alarm telegraph apparatus for $426,450, when the plaintiffs had offered to supply such apparatus for $275,000, being $151,450 less. On July 12, 1869, the Fire Commissioners advertised for proposals for 1 ‘ a new and perfected system of telegraph for fire alarm purposes in the city of blew York.” The notice specified the nature of the machinery—a central office, radiating metallic circuits, four hundred automatic street boxes, alarm machinery for eighty stations, not more than ten stations on each circuit. All the ma
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chinery, &c., to be of the best quality and improved style. Notice was given that specifications could be obtained at the office. Accordingly, application was made for their further specifications. Upon examining- them it was found that they described a patented system which Gamewell & Company held, and which no one else could use. The plaintiffs thereupon sent the commissioners a protest against this mode of excluding all competition. They offered Gamewell & Company to allow them to use a patent which the plaintiffs hold for certain contrivances in fire alarm telegraphs, if Gamewell & Company would also allow the plaintiffs to use their patent, and then that both should bid for furnishing either or any style or apparatus including the patented features of either. They informed the commissioners of this proposition. The time for receiving proposals, by the original advertisement, was limited to July 26, 1869. The commissioners, in reply to -the plaintiffs’ request and objections, stated that they would receive, and the plaintiffs might put in proposals based upon the advertisement alone, without reference to the specifications, and extended the time to put in proposals to August 9. The plaintiffs then put in proposals to do and furnish what the advertisement required for $275,000.
The commissioners, on August 11, awarded the contract to the Chesters, who were averred to be merely representatives of Gamewell & Company, for $426,450.
The plaintiffs alleged that their system had received the approval of the commissioners, or a committee appointed by them, and that the system of the Gamewell & Chesters was condemned by said commissioners for its cost; that the defendants Chesters were mere representatives of Gamewell & Company, and that there was reason to suspect collusion and fraud in giving the job to Gamewell & Company.
A public test or examination of the two systems was invited.
The plaintiffs claimed that according to the law con
p. 52I. The affidavits show that proposals were intended to be received by the commissioners, and were received, without requiring any specific features of detail, or peculiarities of any patented system, except in the particulars pointed out in the original advertisement. II. Under the facts shown as to the advertisements of the proposals, the peculiarities of the two systems, and the conduct of the parties (reviewed in detail), the plaintiffs are entitled to the contract.
trolling the action of these officers, they were entitled to the contract for erecting the telegraph.
The provision of the act Lof 1861 relied on by the plaintiffs is as follows :—
“All contracts by or on behalf of the mayor, aider-men and commonalty of the city of New York shall be awarded to the lowest bidder for the same respectively with adequate security, and every such contract shall be deemed confirmed in and to such lowest bidder, at the time of the opening of the bids, estimates or proposals therefor, and such contract shall be forthwith duly executed in the name of said mayor, aldermen and commonalty, by the head of the department having cognizance thereof, with such lowest bidder.” Laws of 1861, 702, ch. 308. '
The provision of the Fire Department Act under which the commissioners acted in making these contracts is as follows:—
“ The board of commissioners shall have full power to provide, in and for the city of New York, supplies, horses, tools, implements, and apparatus of any and all kinds, (to be used in the extinguishing of fires,) and fire telegraphs, to' provide suitable locations for the same, and to buy, sell, construct, repair and have the care of the same and take any and all such action in the premises as may be reasonably necessary and proper.” Laws of 1865, 397, ch. 249, § 6.
James Hmott, and Daly, Henry & Olin, for the plaintiffs.
p. 53III. The right of public officers and of cities to contract for a patented article is sustained on the ground that even though one person may own exclusively the right to sell it, that does not prevent any one from bidding—taking the right of paying for its use by royalty or otherwise (Hebart v. Detroit, 7 Am. Law Rep., 741, 745). A competitor may make the most preposterous claims as to patents. But this court cannot decide those .claims. It has no such jurisdiction. IV. The Fire Commissioners, admitting that we have duly proposed for this work, conformably to the requirements set by them, claim the right to reject our bid, although the lowest, in the exercise of discretion, or caprice, or wTorse, because, as they say, the Chesters’ plan would work better, and because they thought contracting with them would prevent litigation. But we say these commissioners have no power and no right to do so. They are bound to advertise—as they did ; and to receive bids—as they did, under their advertisement, waiving anything in the specifications in the way of competition, and they are bound to give a contract to the lowest bidder. Indeed the law gives it to us. V. The Metropolitan Fire Commissioners are merely city officers. They are not, like the Police Commissioners, officers of a new district. Every contract which they make is therefore a contract by and in behalf of the city. All their acts and contracts are, therefore, subject to and regulated by the act of 1861 (Laws of 1861, 702, cli. 308, § 1). The act of 1865, and its sixth section, must be read in connection with and construed by the previously existing act of 1861. The act of 1865 is constitutional, because it.takes powers belonging then to the common council, or delegated by them to a department, or to officers or other persons, viz: the power of purchasing apparatus, and of using and directing it, and confers that power upon a new set of officers or agents. These powers were not an office, or the duties of an office. The power now in question is part of the general contracting
p. 54power of the common council. That is precisely the power which the act of 1861 was intended to and did restrict and regulate. It is no less restricted in the hands of these special agents than in the common council. These commissioners are only special agents, though appointed for and not by their principal (Roosevelt v. Draper, 23 N. Y., 318 ). VI. The commissioners succeeded to all the powers and duties of the common council in regard to contracts for supplies and machinery, to be exercised as the common council, or the boards or officers possessing it, were bound to exercise it. They succeed to the restrictions, as well as to the power ; and the whole system of checks and regulations which surrounded the administration of this business by the former authorities attach to it now. VII. We do not contend that the ordinances of the common council (1 Hoffm. L., 141), or section 38. of the Charter of 1857 (1 Hoffm. L., 137), in terms or expressly apply to this contract. But the act of 1861 does cover the case, and the whole legislation and system of ordinance referred to, indicate the policy of the legislature and of the city authorities. The law requires these commissioners, in making such a contract, to advertise for proposals and receive bids—tj*en to open the bids—and the lowest bidder becomes the contractor, provided within fifteen days he signs the contract and furnishes satisfactory security. The contract relates back, and is in force from the time of the bids. This is the law of 1861, and these restrictions and requirements are binding on the defendants. The commissioners have no discretion. They are acting under a system of contracting by proposals and letting, and they cannot introduce features of an inconsistent and hostile system of absolute and discretionary power.
Only two questions are really presented in this motion: 1. Does the charter or the act relative to
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contracts by the mayor, aldermen and commonalty of the city of New York, passed April 17, 18G1, control the Board of Metropolitan Fire Commissioners ; and, if it does, 2. Are the words “ lowest bidder” to be construed literally, and to be accepted in an absolute sense.
First. The title of the act, in terms, declares it to apply to contracts made by the mayor, aldermen, and commonalty of the city of New York, and so does the text of the act itself. It declares expressly, also, that the contracts referred to ill it shall be executed in the name of the mayor, aldermen and commonalty. When we consider that the act of 1865 invests the Metropolitan Fire Department with sole and exclusive authority to extinguish fires, and to provide all the instrumentalities essential for this purpose, it would be indulging in a very wide latitude of interpretation to say that the restrictions of the act of 1861, or of the charter, apply to it. The truth is, the department are necessarily invested with unlimited discretion in negotiating and executing contracts, and are not even obliged to advertise for proposals. The act of 1865 creates a fire district, consisting of the cities of New York and Brooklyn, not responsible to and not identical with any local authority. The officers and agents of the department are appointed by the governor with the consent of the senate ; they are required to report to the governor ; and although the funds necessary for the support and other expenditure of the department are levied and collected by the board of supervisors of the county of New York, those funds are deposited and kept in the State treasury.
Second. Even where a statute declares that contracts shall be given to the “lowest bidder,” it cannot be held that these words should be construed literally, and accepted as an absolute restriction. In such case, undoubtedly, the bids should be bona fide, and should conform strictly to the prescribed specifications; but, in determining whether a bid is the lowest among several others, the quality and utility of the thing ottered,—in other words, its adaptability to the purpose for which it is re
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quired,—must be first considered. The offer, in nominal amount, may be exceedingly low, while the thing offered may be exceedingly worthless. It may be apparently cheap, while really dear, and much dearer and much less adapted to the required purpose than other offers, in which a much larger amount of money was required. If the commissioners were restricted to the lowest bid they would be bound to consider which of the telegraphic systems submitted to their consideration would ultimately cost the city the smallest amount of money, and which would be the most effectual and most desirable. In the exercise of their judgment in this matter, they have decided that the system which they have adopted is cheaper at $426,150 than that of the plaintiffs at $275,000. In fact, they are sustained by the sworn opinion of several experts—among the rest, by that of the renowned inventor of the telegraph. This right of independent judgment they observed in their advertisement, expressly notifying all that “they would reserve the right to reject any or all proposals which, in their judgment, do not embrace a perfect and reliable system.”
The motion is denied with costs.