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could let the work or portions of the work by contract, it was held that, having elected to do the work by contract, they must let the contract strictly as provided by law, and material deviations from the methods imposed rendered the contract void and the contractor without remedy.' Such legislative acts are not directory but imperative in their requirements, and when a statute or charter declares that work is to be advertised, plans and specifications prepared and published, bids invited, and the contract awarded to the lowest bidder it is a formality that cannot be dispensed with.'*
52. No Recovery can be Had for Work and Materials Furnished for Public Work Contrary to Law.–Any irregularity, gross mistake, fraud and collusion, or any circumstance that tends to foster favoritism or to prevent fair and honest competition, may suffice to render the contract void and to deprive the contractor of any returns for his labor or materials. This must necessarily work great hardships to a contractor, it is imposing upon him great burdens to ascertain and watch the deliberations of a board or city council; it is impossible to ascertain the mistakes and collusions of their officers and agents;- but the courts maintain that, though the law may work hardships, it is better that an individual should occasionally suffer from the mistakes of public officers or agents than to adopt a rule which, through improper combinations and collusions, might be turned to the detriment or injury of the public. This rule may seem unjust to a contractor who, without having considered whether the law has been complied with or not, has performed labor and furnished materials for a public corporation, and expects compensation therefor, the same as if they had been done or furnished for a private individual. But, nevertheless, the authorities hold that
a a contractor when dealing in a manner expressly provided by law must see to it that the law is complied with. Where work is done for a city without authority the fact that the city is benefited thereby does not establish its liability to pay for it.'
53. The Law will Not Imply a Contract which the Law Forbids.The general doctrine unquestionably is that when one receives the benefit of another's work or property he is bound to pay for the same, and this doctrine applies as well to corporations as to individuals in cases where there is no restriction imposed by law upon the corporation against making in direct terms a contract like the one sought to be implied; | but where there exist legal restrictions which disable a corporation from agreeing in
Dickinson o. City of Poughkeepsie, 75 96 U. S. 691 (1877]; Nash v. St. Paul, 11 N. Y. 65.
Minn. 174 (1866); Burrell Boston ? Davison o. Gill, 1 East 64-71; People v. (Mass ), 2 Clifford 590 (1867). Allen, 6 Wend. 486; Briggs v. Georgia, 15 * Springfield M. Co. v. Lane Co., 5 Oreg. Vern 72.
265. 3 Whiteside o. United States, 93 U. S. 5 Cases collected, 29 Amer. & Eng. Ency, 247–257 (1876); Hawkins v. United States, Law 864. * See Chap. VI, Sec. 138, infra.
+ See Secs. 692-703, infra.
express terms to pay money the law will not imply any such agreement against the corporation. The law is based upon motives of economy, and orginated perhaps in some degree from distrust of officers to whom the duty of making contracts for public work was committed. If contractors were allowed to recover the reasonable value of their work, or were allowed compensation to the extent that the corporation is benefited, it would afford a means of evading the law. Contractors could combine, conspire to not bid against one another, bribe public officers to accept their proposals, and if detected recover the reasonable value of their work and materials, and thus defeat the very object of the statute.'* No implied contract can be inferred from the fact that the structure is subsequently used by the public.'
Attempts have been made to give detailed estimates of the kinds and quantities of materials and work required, and to omit from the specifications and plans such materials and work as may be encountered that would greatly increase the cost and which are difficult to determine in advance, it being the intention to have such work done by outside parties or by the contractor at a reasonable price. Such materials are hard-pan, rock, and quicksand. If under the statute contracts can only be let to the lowest responsible bidder, then no other manner of contracting can be legal, and any bid or contract which leaves the payment for a substantial part of the improvement contemplated, either in work or material, to private agreement, is contrary to express provisions of law, and void. It seems that if the extent of such extra work and material cannot possibly be ascertained in advance, even approximately, it may be proper to mention such contingencies in the specifications and contract and to provide for payment for such extraordinary contingencies at what the extra work is reasonably worth; by measure or weight, as per cubic yard or per ton; but such a course can never be necessary where, by the exercise of reasonable diligence and suitable investigation by the city surveyor or other proper official, the condition of things affecting the cost of construction can be ascertained beforehand. It can be justified only when the true condition of things cannot be ascertained. If a partial compliance were sanctioned, then there would be no safeguard to the public interests in the requirements of the statute. part of a contract be exempted from the force of the law, a small and comparatively unimportant portion of the work might be advertised and com
· Brady o. The Mayor, 2 Bosworth 173; Pratt v. Swanton, 15 Vt. 147; Murphy v. Zotimau o. San Francisco 20 Cal. 102-105; Albina (Orec.), 29 Puc. Rep 355 (1892). S ringfield Milling Co. 0. Lane Co., 5 Welson v School District, 32 N. H. 118; 1 Oregon 265 (1874); Berlin Iron Bridge Co. Dill. Mun. Corp., § 464; many cases in 6. San Antonio, 62 Fed. Rep. 882
15 Am r. & Evg. Evcy. Law 1081-5. • Bare d. Village of G. 72 N.Y. 463-472; 4 McBrian o. Grand Ripids, 56 Mich. 95. McBrian o. Grand Rapids, 56 Mich. 95. 6 Parr v. Village of Greenbusin, 112 N.
: Taft 0. Montague. 14 Mass. 281, a Y. 246 ; Brady v. Miyor of New stretti. McDnald v. Mayor, 68 N. Y. 23; York, 20 N. Y. 317–318; McBrian v. Grand Davis School District, 24 Me. 349; Rapids, 56 Mich. 95.
* See Sec. 43 and Secs. 136-140, infra.
petition invited, and the great bulk be left to private agreement between public officers and the contractor.'*
It is thought advisable to mention some cases of interest to engineers and contractors in which contracts have been held void and inoperative. The books are full of cases where, contrary to law, contracts have been awarded to parties who were not the lowest bidders, and it is fully established that the contract in such a case is void, and that the contractor cannot recover for work done or materials furnished. +
54. Irregularities Need Not be Caused by Contractor.—Irregularities in awarding the contract, though not encouraged or solicited by the contractor, may destroy the validity of the contract when subsequently discovered. Thus where one of the competitors in bidding for a public work was permitted by the engineer, to whom the proposals were referred for calculation and comparison, to alter his bid so as to make it appear lower than that of the others, and then after the acceptance of his bid, a contract was made at different prices, and with material clauses inserted, not contemplated or offered the other bidders; it was held that the contract was unauthorized and void, and, further, that no recovery could be had for the work performed.' The misfortunes of the contractor are thus augmented when it lies in the power of a dishonest or careless engineer to render his contract invalid. It has been so held when an engineer has been negligent, dishonest, or collusive in his estimates, and it turned out that the successful bidder was not the lowest bidder, that the law was not complied with, and that there was no basis for a valid contract.'
The facts of the case cited, briefly stated, are that the estimate of the engineer proved no better than a random guess, and, like such cases, was far from being correct. The engineer reported the quantities as 10,000 cubic yards of earth and 20,000 cubic yards of rock, and the successful contractor bid $1.621 for earth and 2 cents for rock excavation, and in comparison with others he was the lowest bidder. As it turned out, there were about 20,000 cubic yards of earth and 10,000 cubic yards of rock, which made him one of the highest instead of the lowest bidder. The contractor cleared about $12,000, or 20 to 30 per cent. above the fair value of the work. The court said that such an estimate, in connection with a bid of five times the actual cost of earthworks and less than 1} per cent. of actual cost of rock excavation, was enough to show on its face that the contract was the result of fraud and collusion.'
To engineers and contractors this estimate and bid may not seem so extraordinary nor such clear evidence of fraud. When it is considered that no appropriation or other provision had been made for engineering investi.
8 In re Anderson, 109 N. Y. 554.
i McBrian 0. Grand Rapids, 56 Mich. 95.
+ See Secs. 132-200, infra.
gation, and that no tests whatever were made before letting the work to ascertain the quantities of rock and earth respectively, the estimate is not 80 extraordinary. And men of experience engaged in construction know that facilities for undertaking and handling work, the co-operation of con. tractors, the joint performance of two dependent jobs, in which the work done upon one counts upon the other, would all tend to make a wide difference in the prices bid. For earth that must be hauled to the limits of a city or to distant dumping-grounds they would require a good price, while other contractors who have contracts for filling an adjoining lot at a good figure would be giad to secure the earth for the digging; and likewise with rock, contractors who had immediate use for stone in the vicinity could excavate or quarry it at a mere nominal price. Whether such conditions existed is not known, but to an engineer the facts related would alone hardly be conclusive evidence of fraud. If, however, there had been a bona fide effort to comply with the ordinance, and there had been an honest mistake or error as to the quantities, the case would have been decided differently.
In a more recent case in the same state, with almost precisely the same facts and circumstances, it was held, -that the contract was binding; that, though the contractor in making his bid knew that the estimate misstated certain items, and, in bad faith and with intent to profit by the ignorance of the engineer, made an unbalanced bid, yet, there being no fraudulent collusion between him and the engineer or other officer of the corporation, he was entitled to recover, and had a right to the benefit of his own knowledge, honestly acquired, so long as he did nothing to mislead or deceive the city. It was held that the validity of such a contract did not depend upon the accuracy of the officer charged with the duty of making the estimates, but upon an honest effort on his part to be accurate; that the lowest bidder under the esti ates is the lowest bidder under the law; that the city could not hold the contractor to a performance and then annul the contract because the accurate result so varied from the estimates as to make the accepted bidder higher than the others."
The decision in this case, it is thought, will better meet the views of engineers and contractors, but it does not overrule the preceding case; and if the officers of a corporation have acted dishonestly, collusively, or even negligently, in express violation of the statute or ordinance, the contract may be declared void.'
In another case, in which the prices for curbing and guttering were about four times those of other bidders, and the bid offered to do flagging for nothing, which was the largest portion of the expense, the case was
" In re Anderson, 109 N. Y. 554. . Reilly o. Mayor, etc., of N. Y., 111 N. Y. 473.
3 Accord McMullen o. Hoffman (C, C.), 75 Fed. Rep. 547.
regarded as free from fraud, and it was held that the prices alone were not sufficient reason for declaring the contract invalid.'
55. Precautions to be Taken by Contractors with Regard to Parties and Their Powers. In conclusion it is submitted that when a contract is made and entered into “ by and through commissioners or boards of public works, government or city officers or engineers, or agents of a public corporation it is imperative that the parties study the act or statute to which the corporation or board owes its existence; that the constitutionality of the act be considered; that the charter granted be consulted to see that the powers and privileges of the corporation comprehend the proposed improvement; that the deliberations and actions of the city council or board have been legal and constitutional and within the strict interpretation of the act; that the indebtedness limited by the act has not been exceeded, nor the appropriation been exhausted; that the power to make and enter into contracts has not been specifically given by the act to some particular officer, and that it is a power that can be delegated; that the officer or agent who assumes to act has been duly appointed, elected, and authorized to act on behalf of the corporation or board; that his acts are within the authority so delegated or bestowed; that such officer or engineer has in honesty and in good faith performed his duties according to law; that the work itself is not forbidden by statute, ordinance, or public policy; and finally that the property upon which the work is to be performed has been acquired, accepted, or condemned pursuant to the powers given and the laws governing the corporation. Then, and only then, can a contractor feel secure in the prosecution of his work and that he will be rewarded for his labors.
56. Source of Power.—“ By virtue of the power vested in him [them]," etc.* The importance of this clause must be evident from what has preceded. Every opportunity should be given the contractor to investigate the conditions under which he enters into the contract, and to inquire into the legality of his undertakings.
57. Residence of Parties—Place Where Contract is Executed.—“By and between...
...of the City of County of......
... State of.. Here should be inserted the full name of the person, partnership, or corporation that assumes to act and be responsible for the performance or execution of the works undertaken. The contract should give the full and correct name under which the parties do business if a partnership, and if a corporation the precise title under which it was incorporated.
58. Laws Governing Contract May be Determined by the Place Where Contract was Made or by the Residence of the Parties. It is important that the residence of the parties be given. Corporations should be described
1 Matter of N. Y. P. E. P. S., 75 N. Y. 324 .
* See Secs. 29, supra, and 200-202, infra.