Court Opinion

ID: 9828428
Source: CourtListenerOpinion
Date Created: 2023-09-01 18:21:54.811866+00
Date Added: 2024-06-11T07:42:48.016328
License: Public Domain

On Motion for Rehearing.
On motion for a rehearing, we have given this case as much, indeed far more, consideration than we originally did. We regard the questions involved as of great importance, not only to the parties involved, but to municipal governments especially.
We will set out more of the contention of appellants, as appears in their brief:
“On the 11th day of June, 1927, the taxpayers of Alamo Heights voted improvement bonds in the sum of $180,000 for the purpose of improving streets in said city, and $120',000 for the purpose of constructing sewer improvements in said city.
“On September 2, 1927, R. O. Thaxton addressed to the council of said city a proposal to do all engineering work in connection with the improvements to be constructed with said money for 6 per cent, of the cost of the work. That proposal was accepted on the same day. On September 6, 1927, appellee Colglazier & Hoff, Inc., submitted to the city a proposal to construct all the improvements to the extent provided for by said bond issue and to the full extent of the proceeds derived from the sale of the bonds for the actual cost of such construction plus 12 per cent. That proposal was accepted by ordinance on the same day.
“To the time of the institution of this suit on December 3, 1927, there had riot been prepared, and completed sufficient plans and working details on which to commence construction of the improvements, and these proposals were received and accepted by the city without it having invited or received from any other person a proposal to do the work.
“The city of Alamo Heights had not, at the time of the receipt of the proposal, or of the filing of this suit, ordered the improvement of. any street, with one exception, to wit, that on November 23, 1927, a storm sewer was ordered on Broadway from Basdon avenue to Grace Gian.
*265“On September 9, 192.7, the mayor of the city assumed to execute in its behalf a contract between the city and appellee Colglazier & Hoff, Inc., for the construction by it of the proposed improvements in accordance with the terms of that contract. The city proposed and proposes to construct curbs, gutters, and pavement wholly at the cost of the city, to be paid from .the proceeds of said bonds, and without assessing against abutting property and owners thereof any portion of the costs of such improvements; it proposed and proposes through the contract to surrender and delegate to Colglazier & Hoff, Inc., the determination of all costs of construction, except such materials as the city may be permitted to and may purchase directly under the terms of the contract, and to pay Colglazier & Hoff, Inc., as its compensation 12 per cent, upon all such costs and purchases, and also to pay all bond premiums incurred by it in connection with the work.
“The city council of Alamo Heights wrote a letter addressed to the taxpayers as an inducement for them to vote bonds for sewer construction, stating that arrangements had been made to connect the proposed Alamo Heights sewer system with that of the city of San Antonio, in event sewer bonds be voted. The bonds were voted, but before making the contract here challenged it was a known fact that such proposed sewer system could not be connected with that of the city of San Antonio. Without any method for disposal available, and not knowing how or where disposal could or would be had, or the cost thereof, the city proposed and proposes under the contract, to expend the bond money in constructing lines of sewers, without knowledge that the lines when constructed would be adapted to such.disposal, if any, as may be hereafter provided.
“The appellee Colglazier & Hoff, Inc., to aid the city council to procure the voting of the bonds, furnished, without any agreement for or expectation of receiving compensation, services of its officers and surveyors and engineers at. a substantial expense to procure and furnish data essential to the proposed bond issue. After the bonds were voted, the contract challenged was awarded to Colglazier & Hoff, Inc., without competition.
“This suit was instituted by appellants as taxpayers seeking a temporary injunction against proceeding with the contract, or the expending of any money thereon.”
The contractors entered into the bond required by the city, and the contract was let under the city ordinance. There is no statute requiring competitive bidding as the.basis for a contract by a city; incorporated under the general laws. There is such a statute with reference to counties, where the amount involved exceeds a certain sum. There being no statute requiring competitive bids to be taken by the city of Alamo Heights for street or sewer improvements, it had the power to enter into a contract for that purpose without requiring competitive bids.
The contention that the city of Alamo Heights could not contract for street improvements to be paid entirely by the city, even though out of the proceeds of a bond issue, without providing for the assessment of a portion of the costs against the abutting property and its owners, is without merit. Reliance is placed by appellants upon chapter 8 of the Statutes of 1925, which was originally enacted as sections 126 to 129 of an Act approved March 18, 1875. See Gammel’s Laws, vol. 8, pp. 148 to 150.
Section 32 of the same act gives cities exclusive control and power over the streets, alleys, and public highways of the city, and power to open, alter, widen, extend, establish, regulate, clean, grade, or otherwise improve the same.
The legislative act now known as chapter 8 of the Statutes of 1925 has been brought forward by codifiers, notwithstanding it is invalid under the decision in the case of Hutcheson v. Storrie, 92 Tex. 685, 51 S. W. 848, 71 Am. St. Rep. 884, for want of provisions relating to 'hearing to determine benefits. It was decided in 1899, overruling other Texas decisions on the same point. Chapter 9, Revised Statutes 1925, was passed in 1909, evidently for the purpose of affording an opportunity to cities and towns of making street improvements on the assessment plan, and of complying with the decision in Hutcheson v. Storrie, supra. Chapter 106 of the Acts of the Special- Session of the Fortieth Legislature was passed evidently for the purpose of affording a better system for levying assessments and for the purpose of enabling cities incorporated under the general law, having population in excess of 1,000 inhabitants, .to make street improvements and assess part of the costs against the property owners without first having an election to adopt, such law, as was provided in the act of 1909. The effect of the provision of that act is to permit its use by a city like Alamo Heights, even if such city had theretofore adopted the act of 1909.
Article 1016 of the Revised Statutes 1925 confers general power upon cities - incorporated under the general law to make street improvements. In view of such general provision and of the act passed by the Fortieth Legislature above referred to, it is clear that the city of Alamo Heights had the power to contract to pay for the improvements entirely out of city funds, without levying assessments against the abutting property for a part of the costs. The act of 1909, not having been adopted in Alamo Heights, has no application in this case.
As the city had the power to make a contract for the improvements in question, without competitive bidding, and has the power to agree to pay therefor entirely out of the city’s funds, the next inquiry is whether the contract itself is invalid on' account of any of its provisions. It is contended that it is invalid because the work is to be done by the cost plus plan. While the wisdom of any such provision is indeed questionable, no authority is cited, nor have we found any, showing *266that our courts have ever held such a contract to be invalid, and the weight of authority, as cited elsewhere-herein, seems to support the validity thereof.
It is likewise contended and urged with great insistence that other provisions of the contract render it invalid, the most important of which is to the effect that article 6 of the contract undertakes to delegate to the contractor nondelegable municipal powers, in that it authorizes expenditures by the contractor in amounts less than $500 without the approval of the engineer and in amounts in excess of $500 with the approval of the engineer, and limits the city’s right to make its own expenditures for purchases for such improvements through the contractor as fiscal agent for the city. The last-mentioned provision reserves to the city the right to make expenditures and make arrangements for purchasing, but contains the provision that it must be done through the contractor as fiscal agent for the city. It is evidently intended to mean that the city retains the power to make expenditures and to arrange for purchases, but that the actual closing of purchases is to be done through the contractor, no doubt for .the purposes of avoiding any confusion in keeping account of what has been expended. The provisions relative to purchases by the contractor, while perhaps unwise, are not such as to render the contract invalid. They do not relate to purely governmental functions, and, while it may not be advisable to permit purchases to be made by a person who receives a percentage upon such purchase, still he would be required under the law to act in good faith and to make purchases to the best advantage. Criticism is also made of the last paragraph of article 8, relating to the city’s right to place, employees of its own in positions of accounting, timekeeping, and checking; it being further provided that such employees shall perform their respective duties in accordance with the contract for handling the work in co-operation with the contractor’s employees. This provision does not destroy the reservation made by the city, but limits it for the purpose 6f leaving the contractor in control of the work. The work of accounting, timekeeping, and checking, when performed by the city’s employees, must evidently be done at such time and place as will not interfere with the carrying forward of the construction work and in co-operation with the contractor’s employees who may have duties to perform with reference thereto so as not to interfere with the proper progress of the work.
There does-not seem to be any conflict between the reservation and the proviso, and .does not appear to be anything in the particular part of the contract as would authorize the court' to declare it invalid. Other claims of inconsistencies and ambiguities are made, but such inconsistencies and ambiguities as may exist raise questions of construction of the contract which may have to be worked out by resort to extrinsic facts and circumstances in some iristances, but same do not affect the Validity of the contract.
As heretofore stated, it is discretionary with the governing body to pave streets wholly at the expense of bonds voted for street improvements or under the plan of assessing a portion of the cost against abutting property.
If the governing body proceeds regularly and legally, it is within their discretion to say what work shall be done, and whether or not disposal of sewerage after leaving the outfall has been provided for is a matter within that discretion. If no arrangements had been made for disposal of sewerage, then, of course, the sewers cannot be used because of the danger to public health. It is not required that the same contract which provides for the sewer mains shall provide for the outfall disposal.
It is not the province nor the desire of courts to embarrass or control governmental bodies in the exercise of their legal functions, in the absence of fraud or some other great abuse of arbitrary power.
The motion for a rehearing is overruled.