MONTANA SUPREME COURT. STATE of Montana, ex rel. Lucien EAVES | therefor, which contract must not exceed the et al., V. J. E. RICKARDS et al. (........Mont.........) 1. The lowest bidder although offering a bond for the performance of the contract cannot compel the award to him of a contract for the publication and annotation of codes which by the Constitution and the Act of March 7, 1895, the state furnishing board is required to let to the "lowest responsible bidder therefor," the statute also requiring that the type-setting, printing, and binding shall all be done within the state, and that the publisher shall keep sufficient copies to supply all demands for not less than eight years, and a full complete set of stereotyped matrices of every page of type used. sum of eight thousand five hundred and fiftyfive dollars for the publication and annotation of one thousand sets, containing two thousand, three hundred pages, or less, and two and 25-100 dollars for each additional page. Sec. 6. The contract shall specify that one thousand sets shall be printed, published and delivered to the secretary of state, on or before the 30th day of June, 1895. That the type-setting, printing and binding of said codes shall all be done within the state of Montana. That the publisher shall keep on hand, and for sale, at price not to exceed ten dollars per set, a sufficient number of copies of said codes to supply all demands for a period of not less than eight years. That the publisher shall also make and keep on hand a full and complete set of stereotype matrices of each and every page of type used in printing the codes." 2. A corporation is not disqualified to bid for a contract to be let by the state furnishing board by reason of the fact that its As to public printing, the constitution of business manager, who was not a stockholder or the state provides as follows: "“All stationofficer of the company and whose salary or posi-ery, printing, fuel, and lights used in the tion would not be in any way affected by the legislative and other departments of governcontract, was a member of the legislative assem-ment, shall be furnished, and the printing bly which passed the act providing for the letting of such contract. (May 6, 1895.) APPLICATION for a writ of mandamus to committees, shall be performed under cole compel defendants as the state furnishing board to award relators the contract for the printing of the public statutes. Dismissed. and binding and distribution of the laws, journals, and department reports and other printing and binding, and the repairing and furnishing the halls and rooms used for the meeting of the legislative assembly, and its tract to be given to the lowest responsible bidder, below such maximum price, and under such regulations as may be prescribed by law. No member or officer of any deStatement by De Witt, J.: The matter before us is a decision upon way interested in such contract; and all such partment of the government shall be in any the return of an alternative writ of manda-contracts shall be subject to the approval of The respondents, constituting the state the governor and state treasurer.' Article furnishing board, let a contract to the In5, 30. termountain Publishing Company for print. ing, annotating, and binding the codes which were adopted at the fourth session of the legislative assembly. The act of the legis lature, approved March 7, 1895, as to the printing of the codes, provided, among other things: mus. on or about March 17, 1895, the state furnishThe application for the writ sets forth that ing board caused to be published the following notice: "Proposals for Printing. Office State Furnishing Board, Helena, Montana, March 13, 1895. Notice is hereby given that the state furnishing board, in accordance "Sec. 4. The said codes, as compiled and with the provisions of an act entitled, ‘An codified by said commissioner, shall be an act to provide for the compilation, codificanotated by the publisher thereof as fully and tion, publication, distribution, and sale of completely as Hill's Annotated Statutes and the Code of Civil Procedure, Civil Code, Codes of the state of Washington, in so far Penal Code, and the Political Code,' apas the reports of the supreme court of the proved March 7, 1895, will receive proposals state of California are contained, and shall for the printing, binding, publication, and contain full annotations of the Montana Re-annotation of the Political, Civil, Penal ports to April 1, 1895. They shall be published in two royal octavo volumes, equal in size, quality of paper, press work and binding, and similar in respect to the type used, to said Hill's Codes. Code, and the Code of Civil Procedure of the state of Montana, as codified by the code commissioners, in two royal octavo volumes, equal in size, quality of paper, press work, and binding, and similar in all respects to "Sec. 5. The state furnishing board of the the type used, to Hill's Annotated Statutes state of Montana are required to immediately and Codes of the state of Washington, as contract for the publication and annotation fully and completely as Hill's Codes are anof said codes, as specified in this act, con- notated, in so far as the reports of the sutracting with the lowest responsible bidder preme court of the state of California are NOTE.-The rights of the lowest bidder for a pub-contained, and, as well, full annotations of lic contract are the subject of a note to Thomas v. the Montana Reports to April 1, 1895. All Mason (W. Va.) 26 L. R. A. 727. bids must be filed with the secretary of this See also 33 L. R. A. 827. board on or before April 4, 1895, and be in- | Upon this affidavit an alternative writ was dorsed 'Proposals for Printing Codes of Mon-issued, commanding the said board to contana.' The board reserve the right to re- vene and revoke the award of the contract to ject any and all bids. J. E. Rickards, L. the Intermountain Publishing Company, and Rotwitt, H. J. Haskell, State Furnishing award the same to the relators, as the lowest Board." The relators further state in their responsible bidders, or to show cause on the affidavit upon which they ask for the writ 18th of April why they had not so done. of mandamus that, in pursuance to said no- The respondents filed a demurrer, and a motice, they submitted to the board a bid for tion to quash. Decision was reserved upon the annotating, printing, and binding of said the questions raised by said motion and decodes, in the sum of $7,795, and $2.25 per murrer, and respondents were ordered to file page for each page exceeding 2, 300, and that their answer. The answer being filed, there they submitted another bid to annotate, print appeared to be a denial of most of the maand bind, and deliver the required number terial allegations of the affidavit, and it of volumes for the sum of $8, 290; that each seemed that there were raised questions of of said bids was below the maximum pro- fact essential to the determination of the vided by law to be paid for said service, matter. This court thereupon appointed a and also lower than that of any other bid referee, and in the order appointing him submitted; that they offered to execute a defined the issues upon which he should take good and sufficient bond in the sum of testimony. $10,000, or in any other sum which the The issues of fact, as set forth in the orboard might require. They allege, further, der of reference were as follows: "(1) Was that they are experienced publishers, and James H. Monteith, mentioned in the affiresponsible and capable artisans, engaged in davit in this case, a stockholder of the Interdevoting their services, skill, experience, mountain Publishing Company at the time and ability to their business; that they are of the awarding of the contract herein menfinancially able to procure the services of tioned to the Intermountain Publishing Comcompetent and skillful codifiers and annota-pany, or at any other time mentioned in said tors to aid them, and are competent and re-affidavit? (2) Is the said James H. Monteith sponsible for the faithful execution of the interested, or was he at the time of the letwork in a skillful and workmanlike manner. ting of the contract interested, in any manThey set forth, further, that other proposals ner whatever, in the contract awarded as or bids were filed; that the board examined aforesaid to the said Intermountain Publishthe bids on April 4, 1895, and that the bid ing Company? If so, how, and to what exof the relators upon the first proposition sub-tent? (3) Did the relators, in making their mitted was $760 less than that of the Inter-alleged bid, offer to execute or deliver to mountain Publishing Company, and, upon said board a good and sufficient bond or unthe second proposition submitted, $265 less dertaking, or any bond or undertaking, for than the bid of said company. They fur- the sum mentioned in the affidavit, or any ther set out in their affidavit that the Inter- sum, for the performance of the contract? mountain Publishing Company is disquali- (4) Did the state furnishing board, in awardfied to contract for said work, because, as ing the contract in question, make inquiry they are informed and believe, James H. as to whether the relators were financially Monteith is a member of said company as a able to procure the services of competent and stockholder and officer therein, and business skillful codifiers and annotators; and, if so, manager thereof, actively and personally en what inquiry did they make? (5) Did said gaged in the management and promotion of board, in letting the said contract, make inthe interests of said company, and as such quiry as to whether relators were competent is interested in the contract; and that the or responsible for the performance of the consaid James H. Monteith is now, and during tract in a skillful and workmanlike manner, all the times herein mentioned was, a mem- according to the requirements of law; and, ber of the legislative department of the state, if so, what inquiry was made? (6) Did the as representative from Silver Bow county, board, in awarding the said contract, make which legislature passed the act for said inquiry as to whether the relators were able printing, binding, and annotating the codes. to annotate the said codes as fully and comRelators further set up that by virtue of the pletely as Hill's Annotated Statutes and facts stated it was the duty of the state fur- Codes of Washington are annotated, in so nishing board to award said contract to re- far as the reports of the state of California lators, and that they demanded that such are contained; and, if so, what inquiry was action be taken by the board, but that, not- made? (7) Did the said board, in awarding withstanding the facts set up, the board the said contract, make inquiry as to whether wrongfully, arbitrarily, and in disregard of relators were capable, and could do or cause the duty enjoined upon it, and contrary to to be done the type-setting, printing, and the provisions of the constitution and laws, binding of the said codes within the state of wrongfully resolved and pretended to award Montana, or could have published the same said contract to the Intermountain Publish as required by law; and, if so, what inquiry ing Company. Relators allege that they are was made? (8) Did the state furnishing beneficially interested by reason of their be board, before awarding said contract, meet ing bidders, as described, and being entitled for the purpose of considering bids submitted to the award of said contract, and also by to them, and what examination did they reason of their being citizens and tax-payers make of said bids? Did they hear relators, of the state. They prayed a writ command- and other persons who had presented bids? ing the board to award said contract to them. What inquiry did they make as to the ability pairing the Erie canal. People v. Contracting When the officer is althe matter, the writ and qualification of said bidders to perform the said work? What inquiry did they make as to the responsibility of the several bidders, financially and otherwise? Was the deter-will be refused. Id., 27 N. Y. 378. It has mination of the said board to award the contract to the Intermountain Publishing Company based upon the facts inquired into by them ?" The referee has filed a voluminous report. Counsel argued the law of the case fully upon the motion to quash and the demurrer, and have also discussed the questions of law and fact since the filing of the referee's report. Messrs. Wilbur F. Sanders and E. N. Harwood for relators. Messrs. Henri J. Haskell, Atty-Gen., William Scallon, E. S. Booth, and Miss Ella L. Knowles, Asst. Atty-Gen., for respondents. De Witt, J., delivered the opinion of the court: As we have viewed this case from its inception, there seem to be only two main propositions for the decision of this court: (1) Had the state furnishing board, in awarding this contract, discretionary powers? This is the question of law in the case. (2) If the first proposition be answered in the affirmative, did the board wisely exercise such discretion, or did they, as alleged by the relators, exercise it "wrongfully, arbitrarily, and in disregard of duty?" been refused because the officer could decline the bids if he deemed them to be excesssive or disadvantageous to the state (Id., 33 N. Y. 382); because the officer was only required to let the contract to the lowest bidder if he was responsible (Hoole v. Kinkead, 16 Nev. 217), or if he furnished adequate security (People v. Fay, 3 Lans. 398); because the contract was to be let to the lowest responsible bidder, and the contract in the case required, for its fulfillment, pecuniary ability, judgment, and skill (Com. v. Mitchell, 82 Pa. 343); and because in the advertisement the right to reject any and all bids was reserved. Hanlin v. Independent Dist. of Charles City, 66 Iowa, 69. We quote also, from the following authorities: It is held in Douglass v. Com., 108 Pa. 559, as follows: "In the Act of Assembly approved May 23, 1874 (Pub. Laws, 233), directing contracts for supplies to be awarded to the lowest responsible bidder, the word responsible' does not refer to pecuniary ability only. The act calls for an exercise of discretionary powers on the part of the city officers; and if they act in good faith, although erroneously or indiscretely, mandamus will not lie to compel them to change their decision. They may be ordered by mandamus to proceed to do their duty of deWe will first address our attention to the ciding and acting according to their best question of law. It is true that the relators judgment, but the court will not direct them were the lowest bidders for this contract, and in what manner to decide." See also, Com. it is probably true that they offered to give v. Mitchell, 82 Pa. 343, as follows: "The a bond for the faithful execution of the same word 'responsible' in the 6th section of the if it were awarded to them, and they allege Act of 23d of May, 1874, has a broader meanthat they were competent and skillful for ing than is involved in the pecuniary ability the performance of the service. But does this to make a good contract by security for its conclude the state furnishing board? Is the faithful performance, and where the term is offer of the lowest bid and the tendering of a applied to contracts requiring for their exebond, sufficient to constitute one the lowest re-cution, not only pecuniary ability, but also sponsible bidder? The authorities do not so judgment and skill, the statute imposes, not hold. The board must let the contract to the merely a ministerial duty upon the city aulowest responsible bidder. Responsibility thorities, but also duties and powers which includes judgment, skill, ability, capacity, are deliberative and discretionary; and thereand integrity, and it is the duty of the fur- fore, where these authorities have exercised a nishing board to wisely and honestly deter-discretion, mandamus will not lie to compel mine this question of responsibility. It is said in Merrill on Mandamus (section 117): "The law generally requires public officers who are charged with letting contracts for public work to accept the lowest bid there for, and to make the contract accordingly. When such bidder has fully complied on his part with the requirements of the law, he may by the writ of mandamus compel the officer to make the contract with him. The writ has been considered appropriate in relation to a contract for constructing county buildings (Boren v. Darke County Comrs. 21 Ohio St. 311; State v. Licking County Comrs. 26 Ohio St. 531); for state printing (State v. Barnes, 35 Ohio St. 136; State v. Printing Comrs. 18 Ohio St. 386; American Clock Co. v. Licking County Comrs. 31 Ohio St. 415); for articles to be purchased for use of the county for building a bridge (People v. Buffalo County Comrs. 4 Neb. 150); for re them to modify their decision, even though their action was erroneous, in the absence of clear proof of fraud or bad faith." It is said in Kelly v. Chicago, 62 Ill. 282, as follows: "The complainants have merely submitted a proposal to make a certain contract with the board. How do they found upon that a right to have the board make the contract with them? The notice for proposals expressly reserved the right to reject any bid. The charter did not make it the absolute duty of the board to let the contract to the lowest bidder. It provides that 'all contracts shall be awarded by said board to the lowest reliable and responsible bidder.' These qualities of being reliable and responsible, it is obvious, were of the utmost importance in the construction of a work of this magnitude. And the complainants must have been the possessors of these requisites, as well as being the lowest bidders, to make a case of duty on the part of the board to | 1875 (pages 809, 810) that all contracts for award the contract to them. It was for the work to be done upon the new capitol shall board to determine whether the complainants be awarded to the lowest bona fide responsiwere reliable and responsible. It exercised ble bidder or bidders. Held, that the statits judgment upon the question, and found ute requires the successful bidder to be a rethey were not so, and for that reason awarded sponsible one, that is, 'able to respond or the contract to another bidder." See also, to answer in accordance with what is exthe following from Hoole v. Kinkead, 16 pected or demanded, '-in addition to the Nev. 220: "Section 5 of the Statute referred giving of the bond for the faithful performto provides that said board may adopt or ance of the contract. He is not to be deemed reject any and all bids not deemed reasonable a responsible bidder because he offers adequate or satisfactory, but in determining bids for security for the performance of the contract. the same work or material, the lowest re- Where the contracting board has passed upon sponsible bid shall be taken.' Laws 1881, the pecuniary responsibility of a bidder, and p. 59. The provision that they shall take rejected his bid because their conclusion was the lowest responsible bid is mandatory, and unfavorable to him in that particular, the they had no power or authority to accept any court will not interfere, so long as there has other; but in ascertaining whether or not a been no abuse of discretion." See also, rebidder was responsible they were required marks of the supreme court of Massachusetts to deliberate and decide, and in doing so they in the case of Mayo v. Hampden County exercised judicial, not ministerial, func Comrs., 141 Mass. 74: "We need not consider tions. And, in deciding upon the responsi- whether a private person can maintain a bility of bidders, it was their duty to con-petition for a writ of mandamus to compel sider, not only their pecuniary ability to public officers to perform their duties, or to perform the contract, but it was their right direct the manner in which they shall perand duty to inquire and ascertain which form them. It is enough for the decision of ones, in point of skill, ability, and integrity, this case that there has been on the part of would be most likely to do faithful, con- the respondents no neglect to perform their scientious work, and fulfill the contract duty, and no error in the manner in which promptly, according to its letter and spirit. they have performed it. County commisIn Com. v. Mitchell, 82 Pa. 349, a case sim- sioners are not required by law to accept the ilar to this, and under a statute requiring a lowest proposal for public works. The statcontract for stationery, etc., to be given to ute provides that all contracts for public the lowest responsible bidder,' the court works made by them shall, if exceeding $300 thus forcibly expresses itself: 'It is scarcely in amount, be made in writing, after notice open to doubt but that the word under con- for proposals therefor has been published at sideration ["responsible"], as used in the least three times in some newspaper published statute, means something more than pecun- in the county, city, or town interested in iary ability. In a contract such as the one the work. Pub. Stat. chap. 22, § 22. It in controversy the work must be promptly, does not provide that they shall accept the faithfully, and well done. It must, or ought lowest proposal. It is clearly the intention to be, conscientious work. To do such work of the legislature that the county commisrequires prompt, skillful, and faithful men.sioners, after inviting competition by public A dishonest contractor may impose work notice, shall have the authority to make such upon the city, in spite of the utmost caution of the superintending engineer, apparently good, and even capable of bearing its duty for a time, which in the end may prove to be a total failure, and worse than useless. Granted, that from such a contractor pecuniary damages may be recovered by an action at law. That is, at best, but a last resort, that often produces more vexation than profit, -a mere patch upon a bad job; an exceedingly meager compensation, at best, for the delay and incalculable damage resulting to a great city from the want of a competent supply of water. The city requires honest work, not lawsuits. Were we to accept the interpretation insisted upon by the relators, the difference of a single dollar in a bid for the most important contract might determine the question in favor of some unskillful rogue, as against an upright and skillful mechanic. Again, we know that, as a rule, cheap work and cheap workmen are but convertible terms for poor work and poor workmen, and if the city, for the mere sake of cheapness, must put up with these, it is indeed in a most unfortunate position.'" We take the following from the syllabus of People v. Dorsheimer, 55 How. Pr. 118: "It is provided by chapter 634 of Laws of contract as in their judgment the interests of the county require. In the case at bar the commissioners fully complied with the statute. If, upon examining the various proposals, they were satisfied that Mayo, the lowest bidder, was an irresponsible person, unfit and incompetent to perform the work proposed, it was their right and duty to reject his proposal, and to make a contract with some other person, such as, in their judgment, was the most advantageous to the county." Mr. High, in his work on Extraordinary Legal Remedies, after reviewing the Ohio decisions, says: "The better doctrine, however, as to all cases of this nature, and one which has the support of an almost uniform current of authority, is that the duties of officers intrusted with the letting of contracts for works of public improvement to the lowest bidder are not duties of a strictly ministerial nature, but involve the exercise of such a degree of official discretion as to place them beyond control of the courts by mandamus. And the true theory of all statutes requiring the letting of such contracts to the lowest bidder is that they are designed for the benefit and protection of the public, rather than for that of the bidders, and that they confer no absolute right upon a bidder | honestly exercised the discretion vested in to enforce the letting of the contract by them. In a case which was relied upon by mandamus after it has already been awarded the relators it is said: "The learned counto another. In all such cases the spirit, sel of appellant has directed most of his ar rather than the strict letter, of the law re-gument to this question. The argument quiring the work to be let to the lowest bid against the writ is, in substance, that the der, should be kept in view. And where the statute requires the auditor to examine the right of the officers to enter into the contract proceedings, and satisfy himself that they is itself somewhat doubtful mandamus will are legal, before signing; and that if he has not lie. Nor does the mere issuing of pro- examined them, and become satisfied that posals, by officers intrusted with letting con- they are not legal, the most than can be said tracts, inviting bids for the performance of is that he has committed an error in a matter the work, without binding themselves to confided to his discretion, and that the funcaward the contract to the lowest bidder, tion of the writ is not to review such exercreate such an obligation on the part of the cise of discretion. It must be acknowledged officers as to entitle the lowest bidder to the that this argument is exceedingly plausible. aid of a mandamus to obtain the contract." There are innumerable cases in which it is See also, State v. McGrath, 91 Mo. 386; laid down that mandamus cannot issue to Findley v. Pittsburgh, 82 Pa. 351; Madison control discretion. The rule, which is unv. Baltimore Harbor Board, 76 Md. 395; State doubtedly correct when properly understood, v. Scott, 17 Neb. 686; People v. Contracting has been expressed in various forms. It has Board, 33 N. Y. 382; High, Extr. Legal been repeatedly said that the writ cannot Rem. 48; and also the exhaustive note perform the functions of a writ of error; that upon the whole subject found in Anderson it cannot issue to revise judicial action, but v. St. Louis Public Schools, 26 L. R. A. 707, can only compel the performance of minis[122 Mo. 61]. terial functions; and that it will issue to compel a tribunal to act in some way, but not in any particular way. These formulas undoubtedly express a truth, but they express it in inaccurate and misleading manner; and, by reasoning from them as if litcrally and in all cases true, courts have sometimes been led into error, and have frequently been forced to call acts 'ministerial' which are plainly not so. An examination of the authorities will demonstrate the inaccuracy of the above phrases. Thus it is not accurate to say that the writ will not issue to control discretion; for it is well settled that it may issue to correct an abuse of discretion, if the case is otherwise proper. parte Bradley, 74 U. S. 7 Wall. 377, 19 L. ed. 219; State v. Lafayette County Ct. 41 Mo. 226; Glencoe v. People, 78 111. 389; People v. New York Super. Ct. 10 Wend. 285; Stockton & V. R. Co. v. Stockton, 51 Cal. 339; Tapping, Mandamus, 14." Quoted from Wood v. Strother, 76 Cal. 545. Therefore, let us inquire whether there is a showing in this case of an abuse of discretion by the state furnishing board. We quote these authorities simply as to the law as it is applicable to the case at bar. There are some propositions discussed and decided in them which are not now before us, and upon which we do not express an opinion. We are wholly satisfied, from the authorities, that the state furnishing board in this case had discretionary power. It is the intention of the law that the board shall determine who is the lowest responsible bidder. Before leaving the law of the case, we observe that it is held by many authorities that bidders other than those to whom the contract is awarded, such as relators here, have no standing in court to compel by mandamus the letting of the contract to them. See part of the cases above cited, and Anderson v. St. Louis Public Schools, supra, and cases. It has also been urgently argued that the affidavit and writ in this case are insufficient, but these, and some other points raised in this case, we prefer to pass, and reserve an opinion thereupon, and to decide the case upon the merits of the facts as returned by the referee. It is a grave and serious matter if a state board, instead of fairly and honestly awarding a contract, act "wrongfully, arbitrarily, and in disregard of their duty," as charged in relators' affidavit, or act through favoritism and for the purpose of usurping state patronage for personal ends, as argued by relators' counsel. If such a wrongful course is taken by a state board, it appears that there is some method of reviewing it by a court. How such action by a board shall be reached by the court is not necessary to determine. The gravity of the charges against the board in this case has led us to pass all preliminary questions in the case, and to enter upon the merits of the facts. Ex After the advertisement for bids, the board met to examine the same; present, a full board. The meeting was commenced April 4, and continued to April 5. All the bids were opened by the board in the presence of the bidders. The bidders then discussed and explained their bids, and their capacity to perform the work. In the order of reference the referee was directed to ascertain what inquiry the board made upon the various points set out in the order of reference. The examination of the witnesses by the relators sought to develop as a fact that the board did not themselves ask questions of the different bidders, and therefore did not make inquiry. But the testimony is that the bidders talked Having determined the question of law, and explained exhaustively. It is a matter which we noted above as the first matter for of no consequence whether the board obtained consideration, we will now examine the facts their information and facts by asking quesand endeavor to ascertain whether the board tions themselves, or whether the information acted "wrongfully, arbitrarily, and in disre-came from the persons who possessed the same gard of duty," or whether they fairly and voluntarily. In fact, one witness says that |