Court Opinion

ID: 3449595
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:20:41.150079+00
Date Added: 2024-06-11T14:04:07.129123
License: Public Domain

I am unable to agree with the opinion of the majority in this case, and, as I believe that the principle on which it is rested is so far reaching in its implications, I deem it proper to express the reasons for my dissent.
On the former appeal of this case we held on the authority of Schuster v. City of Oakdale, 180 Ky. 760, 203 S.W. 715, that the allegations of the second paragraph of the petition justified the injunction which the plaintiffs sought. The prayer of that petition asked an injunction enjoining the town of Southgate from entering into the contract in question on the ground that the ordinance which authorized the contract was void. It follows that the decision on the former appeal necessarily meant that, *Page 742 
under the facts alleged in the second paragraph of the petition, the ordinance authorizing the work was void. Indeed, that is exactly what Schuster case, supra, held. I quote:
    "The trial court was, therefore, in error in holding legal and valid the ordinances enacted by the council of the city of Oakdale, upon which the bond issue must rest for support, and a like error was committed in sustaining and adjudging valid and binding the contracts for such improvements."
But little reflection must convince one of the correctness of the court's conclusions in the Schuster case if its interpretation of the statute governing the 10-year bond plan of cities of the fifth class be sound. The ordinance in the Schuster case was void because it authorized an indebtedness beyond constitutional authorization. The majority opinion misses the true basis of the Schuster case. The injunction in that case was not issued because the contractor was to be paid with void bonds. It was issued because the town of Oakdale could not authorize the work which called for the creation of an indebtedness beyond that authorized by the Constitution. And this was necessarily the ruling of this court on the first appeal of this case. The majority opinion here says that the fallacy of the appellants' position on this appeal lies in the assumption:
    "That the contractor was to be paid for this improvement in bonds, whereas, there is no such provision in the statute."
The fallacy of the majority opinion, in my judgment, is that it overlooks entirely the immateriality of how the contractor is to be paid. It does not make the slightest difference whether he is to be paid in bonds or by a town warrant. The fact remains that the original ordinance provided for work which costs $70,058.35 to do. The town could not pay this amount out of its current revenues, and under the ordinance as enacted it undertook to discharge this obligation by the creation of an indebtedness. The proposed creation of this indebtedness violated constitutional restrictions and so theordinance itself was void, not because it proposed to pay the contractor in bonds, for I confess it did not, but because it created an indebtedness in violation of constitutional *Page 743 
restrictions. The ordinance was necessarily wholly void, despite what the majority opinion says, for the only method of payment provided by it was the creation of an unconstitutional indebtedness. The Schuster case so holds. The Gedge case cited in the majority opinion is not in point. The ordinance there involved, as I read the case, simply provided for the improvement at the cost of the property owner. Thereafter, the property owners petitioned the city to be permitted to pay for the improvement on the 10-year bond plan. The city acquiesced and issued bonds, the payment of which was secured by the credit of the city as well as by the assessments against the property involved. We held that the city could not pledge its credit as such pledge violated constitutional limitations, but to the extent of the assessments pledged to pay them the bonds were valid. But in the case before us, the ordinance itself provided for the issual of the town's bonds to pay for this improvement and, as this created a debt beyond that authorized by the Constitution, the ordinance itself was void. Now, could the breath of life be breathed into this dead thing? Works of public improvement such as that here involved must be let atcompetitive bidding to the lowest and best bidder. Kentucky Statutes, section 3643-3. If this means anything, it means that all bidders shall bid on the same specifications and look to be paid for their work in the same manner. By providing in the amended ordinance involved on this appeal that the town of Southgate should not be liable itself for any part of the indebtedness created by the doing of this work, the city has provided a valid consideration for the work proposed in lieu of the invalid consideration provided for by the original ordinance. The amended ordinance thus changes a vital part of the contract to be entered into with the contractor. The proposed contract is changed just as much as it would have been had the specifications for material been changed. If the latter had been changed, the majority opinion admits that the law would require a new advertisement and a new submission of bids. See City of Newport v. Schoolfield, 142 Ky. 287, 134 S.W. 503. I am absolutely unable to see why the same consequences should not flow where the provision for payment is changed. Business proverbially hates lawsuits. A prospective bidder under the original ordinance might well *Page 744 
have refrained from bidding, knowing, as he must have known from the Schuster case, with the knowledge of which he is charged in law, that the ordinance under which the work was tobe let was void. He ran the risk of a brutum fulmen if his bid were accepted, or a loss of his remuneration if any one objected after the work had been completed. Cohen v. City of Henderson, 182 Ky. 658, 207 S.W. 4. Who can say what the bids would have been, had the ordinance been valid? The very fact that the successful bidder under the invalid ordinance is willing now to stand by his bid indicates that he did not bid too low at that time. He now has an advantage, the opportunity for which is denied all others who might wish to bid under an ordinance providing for a constitutional payment of the debt to be incurred. To say that this contract is let under competitive conditions is to ignore the facts of the case. It is not a question of a defect in the proceedings involved in the enactment of the ordinance. The ordinance as originally enacted was itself void because it created an unconstitutional indebtedness. If the ordinance be made valid by subsequent amendment, then all bidders should be given opportunity to bid under it as validated. In Preston Land Co. v. Town of Paintsville, 192 Ky. 738, 234 S.W. 445, bids for certain public improvements were invited by advertisement as required by statute. None was received by the day appointed for that purpose. Without readvertisement, bids were solicited by telegrams from certain contractors. It was held that the contract of the successful bidder was void because the invitation for bids had not been readvertised. Of course, the reason for the requirement of readvertisement is that all who wish to bid shall be notified and given an opportunity to bid and thereby competitive bidding be received the majority opinion in this case, however, ignores this salutary rule. Their opinion comes to this — that although a contract entered into is invalid because the ordinance authorizing it is void, yet a municipal body may make the contract valid by amending the ordinance, although the amendment creates a situation entirely different from that previously existing under the original ordinance, and although bidders are not permitted to bid under the new terms. I can never consent to such a proposition. I am authorized to state that Judges McCandless and Logan concur in these views and this dissent. *Page 745