Court Opinion

ID: 9632080
Source: CourtListenerOpinion
Date Created: 2023-08-22 11:02:27.726366+00
Date Added: 2024-06-11T18:08:08.209026
License: Public Domain

.PERRY, C. J.,
dissenting.
'The majority apparently base their decision on the ground that the Board could not lawfully accept *648the bid of the plaintiffs’ because it did not substantially comply with the advertised call for bids. They rely upon 10 McQuillin, Municipal Corporations (3rd ed 1966) 416, § 29.72, note 32, and 65 ALR 835, 836 (1930).
These cases, with the exception of a single case, Greenberg v. Fornicola, 37 NJ 1, 178 A2d 339, which is contra to the majority opinion and will be later referred to, do not deal with the leasing of city owned property, but with compliance with bids for public improvements in which the call for bids must set forth in detail the specifications or requirements which a bidder must meet in constructing the project and which must be made available to the bidder by the city. In my opinion, cases involving calls for bids for public improvements are not applicable to the issue presented here.
Where the lowest responsible bids are sought for public improvements there is naturally the requirement that the municipality provide full, clear, definite, precise and specific specifications. Baldwin-LimaFLamilton Corp. v. Superior Court, 25 Cal Rptr 798 (1962); Bolton v. Gilleran, 105 Cal 244, 38 P 881; Bennett v. City of Emmetsburg, 138 Iowa 67, 115 NW 582; Ricketson v. The City of Milwaukee, 105 Wis 591, 81 NW 864. This is so there may be a common standard as to quality to permit comparison as well as the price to be paid. Konig v. M. & C. C. of Baltimore, 126 Md 606, 95 A 478. Also, the purpose is to limit the discretion of officials which are susceptible to such abuses as fraud, favoritism, improvidence and extravagance. Gale v. City of St. Paul, 255 Minn 108, 96 NW2d 377. Therefore, it is clear that, while specifications advise the bidder, specifications are required for the protection of the public, not the bidder.
*649I agree with the majority that in testing calls for public improvement bids, “[t]he test of whether a variance is material is whether it gives a bidder a substantial advantage or benefit not enjoyed by other bidders.” Duffy v. Village of Princeton, 240 Minn 9, 12, 60 NW2d 27, 29. For if a bidder receives a substantial advantage or benefit not granted other bidders under the specifications submitted the way is open for the abuses sought to be eliminated, and unduly restricts bidding. Temple v. Portland, 77 Or 559, 151 P 724. However, whether or not the bidder’s proposal gives him an advantage is a question of fact to be resolved in the light of all the circumstances. Bader v. Sharp et al., 36 Del Ch 89, 125 A2d 499.
It should be noted, in Duffy v. Village of Princeton, supra, 240 Minn 9, 14, 60 NW2d 27, 30, that the call for bids stated that “[a]s time is the essence of this project, the Contractor shall complete his work at the earliest possible moment, and shall plan the work so there is no unnecessary delays.” The successful bidder stated in its bid that it would commence work within 10 working days and complete the project in 215 consecutive calendar days, unless there were unforeseen delays beyond its control. While this bidder placed upon itself a greater burden than the call for bids required, the court held this was not a material variance as there was nothing in the call for bids that precluded other bidders from responding in the same manner.
ORS 274.040, which authorizes the leasing of tide and overflow lands, so far as applicable to the issue presented, reads as follows:
“* * ® tide and overflow lands owned by the State of Oregon may be sold or leased only to the *650highest bidder after being advertised not less than once each week for four successive weeks in two or more newspapers of general circulation in the state, one of which must be of general circulation in the county in which the lands are situated. # * * »
It is to be noted, there are no requirements as to what the notice shall contain or terms or conditions that must be incorporated in the lease.
The offer to lease the land owned by a public body has for its purpose, as stated in the statute, the obtaining of the greatest return possible from the lease of the land consistent with its lawful use. Therefore, the need for full, clear, definite, precise and specific specifications as required in public construction and purchase offers is not required since the only comparison required of the public body is that it determine in good faith the greatest possible monetary return from the leasing of the land.
There were no specifications as to what would be required of bidders in the offer to lease; therefore, each bidder was at liberty to submit the terms upon which he would lease the property for the five-year term. See Fereday & Meyer Co., Inc. v. Elizabeth Bd. of Public Works, 27 NJ 218, 142 A2d 99.
I think it must be conceded that since the statute authorizing the leasing of the tide and overflow lands does not require any specific specifications to be set forth, as are required in other statutes for the leasing of state property, none are required. See ORS 274.765.
However, I do not wish to intimate that the legislature in not requiring specific specifications in the leasing of tide and overflow lands deprived the Board of its discretion in requiring such specifications -if the *651Board determined any to be necessary. The Board in this case decided none were necessary. But even if it be assumed that the call for bids was specific, plaintiffs’ bid was responsive to the offer in every material matter.
The defendant, as the unsuccessful bidder, bid the minimum amount set forth in the call — $580 per annum or a total sum of $2,900 for the entire term.
The bid of the plaintiffs’ was $15,000 per year, or a total of $75,000. Therefore, no matter how viewed the .plaintiffs’ bid was the highest offer.
■ The plaintiffs’ bid is as follows:
“We hereby offer to lease from the State Land Board for a period of five years at a rental of Fifteen Thousand Dollars ($15,000) per annum the following described tide and overflow land located in Columbia County, Oregon:
[description omitted]
“This offer is made with the understanding that we intend to use said lands and the adjacent waters for the purpose of mooring log rafts and other floating objects and that the lease shall provide that in the event a permit cannot be obtained for the erection of dolphins and piling for moorage purposes, the lease may be terminated.
“We are inclosing herewith cashier’s or bank manager’s checks for the sum of Fifteen Thousand Dollars ($15,000) in payment of the first year’s rental.” (Emphasis supplied)
The majority seem to hold, since the bid was made subject to an option to terminate the lease upon the happening of an uncertain event, it was a conditional bid and not an offer to lease for the full period.
The answer is to be found in the fact that plaintiffs’ offer is for the full period unless an uncertain event occurs in the future.
*652' OES 91.020, which classifies tenancies in this state, sets forth, among others, a “tenancy for years,” and “a tenancy from year to year.”
ORS 91.060 defines a tenancy from year to year as where “[o]ne ivho enters into possession of real estate with the consent of the owner, and no certain time is mentioned, but an annual rent is reserved, is considered a tenant from year to year.” Since the lease in question discloses a certain date for payment, the lease is not one from year to year.
No statute defines a tenancy for years, but it is well established that whenever a lessor grants in writing the possession and enjoyment of land to a lessee for a specified and definite period of years a tenancy for years is created.
The plaintiffs’ bid states they are enclosing “payment of the first year’s rental” which shows an intent to lease for the full period with only an option to terminate on the happening of a future event.
It is equally well settled that “[w]here a term for a fixed period is created by a lease, a provision for the termination of the lease on an event which may or may not happen before the expiration of the period specified will not prevent the creation of a valid term for years. The fact that a lease for a fixed period provides for its termination before the expiration of such period at the option of the lessor or the lessee will not prevent it from creating a valid term for years.” 51 CJS 534, Landlord and Tenant § 27. See Peoples Park and Amusement Ass’n v. Anrooney, 200 Wash 51, 93 P2d 362.
In view of well-established law, I am at a loss to understand the contention of the majority that this was not an offer to enter into a five year lease. The *653majority seem to argue that the offer is made “with the understanding * * * that in' the event a permit cannot be obtained * * * for moorage purposes, the lease may be terminated” and that, therefore, the bid was conditional.
Again it must be noted that the offer is unconditional as to the first year’s rental. The offer does not state that if the bidder is unable to obtain the permit the lease is to be cancelled as though never entered into and that the bidders are entitled to a return of the money advanced. The bid only requests the right of future cancellation.
A truly conditional bid is to be found in Claus et al v. Babiarz et al, 40 Del Ch 500, 507-508, 185 A2d 283, 287, relied upon by the majority, and it is not in point under the facts of our case. In Claus the bid was for the purchase of real property and as stated by the court, “[t]he effect of the condition * * * is to provide an avoidance of the bid upon the happening of a contingency * ® *. Moreover, in the bid the limitation is referred to as a condition, the happening of which will avoid the bid.” (Emphasis supplied.)
As pointed out, in the matter before us the bid is unconditional.
Another answer to the result reached by the majority is that there is set forth in the call for bids no exact specifications as to the terms of the lease other than monetary which may be acceptable to the Board or otherwise the bid will be rejected. The defendant does not question the specifications set forth in the call.
Where the specifications in the call are not questioned, an unsuccessful bidder may not complain that he was injured because of a matter inserted by another bidder.
*654In Fereday & Meyer Co., Inc. v. Elizabeth Board of Public Works, supra, 27 NJ 218, 142 A2d 99, 100, the city advertised for bids' to perform garbage collection'. The former calls had required the bidder- to maintain a dumping ground “within the city or within five miles,” but this solicitation for bids did not. The successful bidder’s dumping grounds were beyond the five miles. The court held, since there was no complaint that the specifications were not satisfactory, that the unsuccessful bidder could not complain.
Also, as pointed out in Duffy v. Village of Princeton, supra, the specifications in the call were silent as to the date of completion and the insertion in the bid of an approximate completion date was not a material variance.
'Again, in Greenburg v. Fornicola, 37 NJ 1, 178 A2d 339, 341, 342, the city advertised for bids for the leasing of space in a pavilion owned by the city. The advertisement permitted the bidder to suggest some other line of business other than those proposed by the city, subject to the approval of the city. It was contended by the unsuccessful bidder that “the provision permitting a bidder to suggest a line of business enabled each bidder to fix his oavii standard,” and \iolated the requirement that “a public body shall prescribe a common standard on all matters that are material to the proposals, to the end that interested persons may bid intelligently and will be induced to bid by a promise of impartiallity.” This contention was sustained by the appellate division, but reA^ersed on' appeal. Mr. Chief Justice Weintraub, writing the opinion of the Supreme Court, said:
“Plaintiff argues * * * that a limitation upon use is compatible Avith the bidding statute *655only if the acceptable uses are specified in the proposal for bids, and hence a proposal for any use, subject to disapproval, violates the statutory policy. The statute does not express that distinction and we should not find it by implication.
“A private owner would hardly take the route urged by plaintiff. * * * It thus comports with the statute unless it is so beset with the prospect of evil that we must find incompatibility on that account.
“The bidding statute seeks to prevent a predetermined result for a favored bidder. We see no special prospect of this evil in a proposal for bids for any use, subject to disapproval * *' *.” (Emphasis supplied.) Greenburg v. Fornicola, supra, 37 NJ 1, 7-8, 178 A2d 339, 342.
The same may be said of the matter before us. The statute does not attempt to set forth any require^ ments as to use or length of required occupancy. The only requirement is that the lease be let to the highest bidder. The highest bidder in this case was the plaintiffs. Their bid to pay and the payment of $15,000, made at the execution of the lease, for a period of one year was more than five times the bid of the defendant for the full five years, even if a future event permitted the plaintiffs to exercise the option to terminate at the end of one year. Termination at the end of one year would have been a benefit to the people of the state for the Board would have been able to again lease the property.
The reference by the majority to the fact that defendant by its bid expressed a greater “willingness to assume the risk of .the nonoccurrence of the contingency and an adjustment of the consideration to reflect this assumption of the risk” than did the plaintiffs is a shibboleth.
*656This is clearly reflected in the fact that, although the defendant was offered the right to a lease upon the same terms as that of the plaintiffs, the defendant rejected the offer. And further, the defendant stated its purpose in leasing the land was the same as that of the plaintiffs. Therefore, I am unable to distinguish, as does the majority, between a bidder who offers more and assumes the risk of a greater loss in the first year of the contract, and one who assumes a very much smaller loss over the entire term.'
The sole duty placed upon the Board by the statute was to advertise for bids and to accept the highest bid. The highest bid, whether it be considered an absolute bid for only one year or for the five year term, was made by the plaintiffs. Certainly this court should riot read into the statute requirements which are not there in the absence of some showing that not to do so would create a great evil that would result in loss to the public.
Regardless of all else, this matter was heard ás a matter in equity and equitable principles apply.
The defendant was granted by the trial court the right to lease the property involved upon the exact same terms as those granted the plaintiffs and defendant rejected the offer. Therefore, in my opinion, the defendant is not in a position to complain.
To me it is unconscionable for this court to set aside the lease entered into between the Board and the plaintiffs.
In the light of all the facts, that this was a lease of land and from all the circumstances it is clear the plaintiffs’ bid did not result in plaintiffs receiving any advantage over any other bidder, I would affirm the decree of the trial court.
Sloan, J., joins in this dissent.