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Township of Hillside v. Sternin

Decided: November 25, 1957.

THE TOWNSHIP OF HILLSIDE, IN THE COUNTY OF UNION, A MUNICIPAL CORPORATION, PLAINTIFF-APPELLANT,
v.
SHEPHARD STERNIN, TRADING AS SHEP ELECTRICAL SERVICE, DEFENDANT-RESPONDENT



For affirmance -- Chief Justice Weintraub, and Justices Wachenfeld, Burling and Francis. For reversal -- Justices Heher and Jacobs. The opinion of the court was delivered by Francis, J.

Francis

The Township of Hillside sued to recover a monetary loss suffered by it as a result of the defendant Sternin's refusal to enter into a contract for the doing of some public work which had been awarded to him pursuant to a bid which he had tendered. The trial court granted summary judgment against the township, from which this appeal was taken. We certified on our own motion.

Early in April 1956 the governing body of Hillside decided to install two sirens, one at the Abram P. Morris School and the other at the Hillside Avenue School. The cost involved was such as to make the project subject to N.J.S.A. 40:50-1, which then provided as follows:

"No municipality shall enter into any contract for the doing of any work, or for the furnishing of any materials, supplies or labor * * * where the sum to be expended exceeds the sum of one thousand dollars [increased to $2,500, L. 1957, c. 30] unless the governing body shall first publicly advertise for bids therefor, and shall award the contract to the lowest responsible bidder." (Insertion ours.)

In compliance with the statute, a public notice soliciting sealed bids was inserted in certain newspapers. It was entitled "Notice to Contractors," and recited among other

things that the specifications and forms of bid would be furnished by the township clerk at his office at 1284 North Broad Street, Hillside, New Jersey, or were available for inspection there during business hours. This further condition was specifically imposed on prospective bidders:

"A certified check made payable to the Township of Hillside for not less than 10% of the amount bid must accompany each proposal."

The record discloses that in October 1955 similar installations had been contemplated, one of them for the Saybrook School and the other for the Hillside Avenue School. At that time Sternin, an electrical contractor, had been given a copy of the specifications and had submitted bids or estimates for the work. It does not appear whether there was then any public advertising for proposals. In any event, the plan was abandoned until April 1956, when it was reactivated with the Abram P. Morris School being substituted for the Saybrook School as the site of one of the sirens.

There is no proof that Sternin ever saw the April 1956 advertisement for bids. His affidavit is to the contrary. It is undisputed that the project was called to his attention by the secretary of the civilian defense organization of the township, who asked him to submit a bid. There is no suggestion that she informed him of the necessity of submitting a 10% deposit check. His sworn statement is to the effect that under the assumption that the proposed undertaking was to be the same as that of 1955, he instructed his secretary to copy and resubmit his two earlier bids without first examining the new specifications. On the other hand, the secretary of the defense organization deposed that after she had made a telephone call to his employee to request a bid, Sternin came to her office. She said further that she told him of the availability of the specifications at the clerk's office (in a different building) and suggested that he go there, obtain a copy and submit a bid. After receiving this information, he departed.

On April 16 the township clerk received sealed bids from him, one for each siren to be installed. The total was $1,087.25. No certified check for the 10% deposit was enclosed or ever delivered. It may be noted here that this requirement did not appear in the specifications, although they do contain a reference to forfeiture of the "certified check which accompanied the proposal" if the successful bidder fails to enter into the contract. Sternin's figure was $1,544.75 lower than that of his nearest competitor and the contract was awarded to him. However, he refused to execute the written agreement, maintaining (some time later) that the bid was the result of his mistaken belief that the work to be done was the same as that which had been called for in 1955 and that he had never seen the new and more demanding specifications relating to the erection of these particular sirens. He contended also that his bid was invalid because the deposit check did not accompany it.

In September, after some conferences with Sternin, who remained adamant in his refusal to sign the contract, an award was made to the next lowest bidder. The sequel was this suit to recover the ...


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