Case Name: REED et al. v. CITY OF BARTLESVILLE et al.
Court: Oklahoma Supreme Court
Jurisdiction: Oklahoma
Decision Date: 1923-03-13
Citations: 108 Okla. 62
Docket Number: No. 13458
Parties: REED et al. v. CITY OF BARTLESVILLE et al.
Judges: JOHNSON, Y. O. J., and MeNEILL, KEN-NAMER, NICHOLSON, and BRANSON, JJ„ concur.
Reporter: Oklahoma Reports
Volume: 108
Pages: 62–64

Head Matter:
REED et al. v. CITY OF BARTLESVILLE et al.
No. 13458
Opinion Filed March 13, 1923.
Rehearing Denied March 17, 1925.
(Syllabus.)
Municipal Corporations — Action % Sewer* Contractors Against City for Tort — Petition — Insufficiency.
Record examined, and held, that the action of the trial court in sustaining the demurrer to plaintiffs’ petition is not erroneous.
Error from District Court, Washington! County; J. R. Charlton, Judge.
Action by E. B. Reed et al. against, the City of Bartlesville et al., for damage» Judgment for defendants, and plaintiffs bring error.
Affirmed.
Shipman & Lewis and G. A. Paul, for plaintiffs in error.
A. O. Harrison, for defendants in error.

Opinion:
KANE, J.
This was an action for damages for tort commenced by plaintiffs int error, plaintiffs below, against the defendants in error, defendants below. Hereafter, for convenience, the parties will, be designated "plaintiffs" and "defendants," respectively, as th^y appeared in the trial court.
'The sole question presented for review" arises out of the action of the trial court in sustaining a general demurrer (to plaintiffs' petition.
The allegations of the petition necessary to notice in passing on this question, as we-gather them from the statement, contained in counsel's brief, may be briefly summarized as follows: That the defendant, the city off Bartlesville, adopted and created by ordinance a certain sewer district and directed ithe< city engineer to prepare and present sections, profiles, plans, plats, and specifications, together with a complete estimate of costs, as provided for by section; 468, Rev. Laws 1910; that in pursuance off such direction, said engineer did submit at complete, preliminary estimate of the costs of construction of such sewer in the aggregate sum of $154,112.50, to which was addecE 2 per cent., anticipated extra work, -and T pi^r cent., city expenses, making an aggregate total estimated cost of $168,198.38. Thait thereupon the proper city authorities directed the city clerk to advertise for sealed bids for the construction of sai(I work; thej plaintiffs 'being the successful bidders. That thereupon the city entered into a written contract with the plaintiffs to .perform said work at a price lower than the aggregate Estimate of costs prepared l>y the city .engineer. That upon ithe completion of said work the city by ordinance undertook to levy assessments to pay the oosts of such improvement and to apportion the cost' of such construction against the several lots and tracts of land within the «district as provided by section 469, Rev. Xaws 1910.
It is conceded by the parties that up to this point all Ithe proceedings hereinbefore referred to were regular on their face, and •that the tortious features of the transaction, if any, weire disclosed as follows: After the enactment of Ithe -assessment ordinance, as provided by section 469, Rev. Xaws 1910, certain property owners resid-.5ng in said sewcjr district instituted an ac-±ion in the district court for Ithe purpose of •enjoining said assessment upon the ground '•that the city engineer, in preparing the preliminary estimate of costs, knowingly based the same in part upon Ithe market value of the warrants to be issued to the contractor In payment for such work, which was 25 per cent, below their face or par value!; that, while upon this basis the bid of Ithe «contractor wa® within the prepared estimate «of the engineer, it would have been in excess of such estimate if the same had been ibased upon the actual or cash cost of the work, and the contract price would have «exceeded the' estimate of costs, and ithere-ifore was to that extent invalid.
The petition then reciites that the city of Bartlesville answered said petition, and thereafter it was adjudged and decreed by the district court that for the reasons stated the tax warrants issued in payment of the work of construction were invalid to the extent of 25 per cent, of thelir face value, to wit, the sum of $69,277.45,
It is further alleged that -ait -the trial of «aid cause Ithe city engineer testified that Ire estimated the costs, of the work partly «upon the depreciated value of -the warrants, and th^ mayor testified that the engineer informed him of his action,«in the premises.
The petition also alleges that the plain-•fiffs herein had no knowledge of the fact •that the engineer had so estimated the costs -of «the work, and that they in good faith -bid -on 'said work of improvement; that an inspection of the engineer's estimate disclosed mo latent defect therein, and thait,. relying upon the correctness of the proceedings of <the city of Bartlesville in the adoption of plans, specifications-; and estimates of costs, .and finding the same! on their face to be fair and reasonable and in all things relying upon such records, they bid upon said work and accepted said contract and completed the work in a satisfactory manner.
Wherefore -they pray it-hat by reason of the wrongful acts of the city in adopting ¡such estimate and letting the contract thereon, the plaintiffs have been damaged in the| sum of $39,277.45, for which, with interest, they pray judgment.
Counsel insists that the foregoing facts state a cause of action sounding in tort against the city under the rule laid down in Oklahoma City v. Orthwein, 258 Fed. 190, wherein it was held that:
"Where a municipal corporation, which has power to make a contract for internal improvements, contracts for them and stipulates that the agreed price shall be paid out of iunds to be realized from special assessments, which it has power to make, .i;b becomes primarily liable to pay tbe contract price itself."
We are unable to perceive any close analogy between the two eases. In the principal case the court found that the evidence showed that fch-e city was guilty of negligence and of a willful (refusal to make valid assessments to pay the bonds of-the plaintiff. In the case at bar there is nothing to indicate thait the city -authorities were either negligeht or that they willfully refused to- do anything in the matter of making ithe prescribed estimate of costs.
The petition clearly -shows Itbat the city authorities prepared an estimate of costs as provided by section 468, supra, and as soon as the district sewer was completed, they computed the whole cost of the work as provided by section 469, Rev. Laws 1910, -and issued tax warrants for ithe payment of the work in pursuance of the same section.
It is true that it is alleged that the city engineer in making the preliminary estimate of costs knowingly took into consideration the fact that the -market value of the tax warrants was 25 per cent, ¡below par. But, assuming that this was unauthorized by tht statute, we are'unable to perceive how this alone can constitute' an actionable wrong against the plaintiffs, nor do ' we see how they could be injuriously affected by if in tbeir bidding, under any reasonable construction of the 1-aw.
Section 468, supra, requires the city authorities to prepare sections, profiles, and specifications, for the work, together with a complete estimate of the costs. This the city authorities did. The next step required of the city aunthoritieis under this section is to advertise for sealed bids for the performance of this work, upon the receipt of which they shall award the contract t-o the l-owelst and. best bidder, which con- tracit; «hall in no ease exceed the aggregate estimate of costs submitted with the plans and specifications.
W.e are unable to pejrceive that the estimate of coste required by the section has any binding effect whatever upon the contractors in the matter of mating bids. It is true it doels .fix the maximum sum which the city aulthoocitiies may noit exceed in making the contract, but within this limit, indeed beyond it, the contractor is free to exercise his own judgment in the matter of bidding. Neither do.es the statute require, as counsel .seem to assume, that 'the estimate of costs shall bel based upon the actual or cash eosit! of the work. The section merely provides for the preparation of a preliminary estimate of costs, and of course in making it the city authorities must necessarily make it sufficiently in excess of the actual cost to provide a reasonable margin of profit; for the successful bidder.
It may be true, and probably is, that thej bids to some extent are based on the sections, profiles, and estimate of costs prepared by the city authorities, but there is nothing in this which prevents the contractors from exercising their own independent judgment and making their bids upon a basis that will insure them a fair profit.
In ithe cascj at bar it appears that the city authorities prepared the sections, profiles, specifications, and estimates of costs in good faith, and they still contend that ithe estimate made is lq'gal and just and that the contractor should be paid in full by the property owners of the district.
In these circumstances, it is fairly clear to us that if the plaintiffs herein suffered any damage!, it was nolt on account of any wrongful or willful act of commission or omission on the part of the city authorities, but wholly on account of the ruling of the district -court, which entertained a different, view of the law.
While' at this time we are not called upon It.o decide which of tkes.e tribunals correctly interpreted the law, we may say in passing that if the bid was fair and not fraudulently Excessive, we -are unable to perceive that the -action of the city authorities complained of furnishes any ground whatever for interfering with paying the contractors the full amount stipulated in .the contract, which was well with Ithe .estimate.
For the reason stated, the judgment of the trial court is affirmed.
JOHNSON, Y. O. J., and MeNEILL, KEN-NAMER, NICHOLSON, and BRANSON, JJ" concur.