10 S.W.2d 923 | Mo. | 1928
Lead Opinion
The plaintiff, as assignee of a special tax bill issued by the city of Excelsior Springs, a city of the third class, in payment of street paving, sought to enforce the same as a lien upon the property of defendant. The only defense made was that the contractor constructing said improvement was a foreign corporation, organized under the laws of the State of Delaware, and had not complied with the laws of the State of Missouri concerning foreign corporations doing business in this State and was not licensed to do business in this State. The answer of defendant pleaded the character of the contractor as a foreign corporation, which had not complied with the laws of this State, and the evidence so showed.
The plaintiff in his reply denied that he had any knowledge of the status of the contractor; alleged that the contract had been fully performed, and that the contractor had no interest in the tax bill; that the defendant had filed with the city clerk of said city notice that he desired to pay the tax bill to be issued against his property, in five annual installments; that plaintiff had examined the record of the proceedings with reference to said contract, and had seen the request of defendant that his tax bill should be made payable in installments, and relying upon the conduct of the defendant therein, had purchased said tax bill and made payment therefor, and that the defendant is now estopped from asserting the invalidity of said tax bill. Plaintiff in his reply further alleged that he had no interest in the contracting company — "The Southwest Company, Engineers and Contractors;" that the city, by legislative action, had made and delivered said tax bill and had a right to issue said tax bill; and denied that the validity of the same could be attacked collaterally. He further alleged that he is a resident of the State of Missouri, and that without any knowledge that the contractor was a foreign corporation he purchased the tax bill relying upon the conduct of defendant, and authority of the city to award the contract and issue the tax bill, and pleaded that to declare said tax bill to be void on account of the incapacity of said contractor would amount to confiscation of plaintiff's property, and impairment of the obligation of the contract, evidenced by said tax bill by legislative enactment, in violation of Section 30 of Article II and of Section 15 of Article II of the Constitution of the State of Missouri.
The evidence showed that the contract in question and the construction of the improvements thereunder was not a single or isolated transaction, but that the contractor had obtained and performed numerous other like contracts. *1052
Certain contentions are made by counsel for plaintiff in consideration of which it is urged that the court erred in holding the plaintiff was not entitled to recover. Counsel say that it was the duty of the council of the city toLowest award the contract to the lowest and best bidder; and,and Best that this duty is not nullified by the provisions ofBidder. Sections 9790-9793, Revised Statutes 1919. If this argument be given its necessary and ultimate effect, it means that if a foreign corporation, not licensed to do business in this State, is found to be the lowest bidder for the construction of a public improvement, and also the best bidder in the sense of resources and facilities for performance of the work to be done, then, the duty is laid upon the city council of awarding the contract to such foreign corporation, although it is without legal authority to transact the business involved in the construction of the improvement called for by the contract. Our attention is called to State ex rel. v. McGrath,
Certain of the acts of a municipal corporation in the construction of public improvements are legislative and purely governmental in character. The determinationLegislative that an improvement is necessary, and theand Ministerial character of the improvement and the extent andActs. boundaries of the improvement district, are acts legislative in character. The carrying out however of these legislative purposes, in respect to the paving of streets and the like, is ministerial, or quasi-proprietary, rather than legislative. Accepting a bid and awarding *1053
contracts for the construction of a public improvement, are not legislative acts. [McCoy v. Randall,
Under a contention similar to what has already been mentioned, counsel for plaintiff argue that awarding the contract to the contractor and issuing the tax bills are public actsCollateral and cannot be attacked collaterally, as between thirdAttack. parties. Among the cases cited in support of this are Heman v. Schulte,
Our attention is also called to Hess Ventilating Co. v. Grain Elevator Co.,
The law in force required the making of a contract between the city and the contractor for the construction of the improvement. [Laws 1921, 1st Ex. Sess. pp. 112-118.] The making of a contract is an essential step to be taken, preliminary to the doing of the work, and the issuance of a special tax bill. Undoubtedly if a contract for the construction of a public improvement has been let, and an assessment levied to pay the contract price, the validity of such contract is essential to the validity of the assessment. [1 Page and Jones on Taxation by Assessment, sec. 483; Sanders v. Mayor of Gainesville,
In the briefs on both sides there is reference to the ruling in Hogan v. City of St. Louis,
The evidence shows that the corporation which had this contract had others, and it is conceded that at no time had it complied with the statute. The ruling has been uniform that under such circumstances its contract was void, and a compliance with the law after making the contract and undertaking to transact business, does not authorize such corporation to maintain a suit to give effect to such void contract.
The failure to enter into a valid contract cannot be held to be a mere irregularity in the proceedings of the city. In 44 Corpus Juris. page 338, section 2507, we find the following: "Awarding the contract to a particular bidder is anIrregularity. acceptance of his bid. Accepting a bid and awarding the contract are not legislative acts. It has been both affirmed and denied that the awarding of the contract is a ministerial act. Likewise it has been both affirmed and denied that the awarding of the contract partakes of a judicial character." Accepting the bid and awarding a contract do not constitute a judicial determination of the legal status or legal capacity of the bidder. The discretion of the council is exercised and operates upon the questions of fact as showing that the bidder is the lowest bidder and the best bidder, and it is not exercised upon the question whether the bidder, a foreign corporation, has complied with the law applicable to such corporations. We can see no reason and we are cited to no authority, which, in our view, requires us to hold that the acceptance by the city council of the bid of a foreign corporation and entering into a contract therewith, must be taken as conclusive that the contract is valid, and we hold this to be so, because, the discretion of the council is not exercised upon the question of the legal right of the foreign corporation to transact business in the State.
A similar case was decided in Kentucky, in Fruin-Colnon Contracting Co. v. Chatterson,
Counsel for plaintiff further urge that because the contract, although illegal, has been fully executed by the parties, that as a result thereof, a new property title vested in one of them, in this case the contractor under the tax bill, and on that ground, the contractor could maintain a suit to recover orNew enforce such new title or right. Under this, ourProperty attention has been called to what was said inRight. Fletcher's Encyclopedia Corporations, section 5963; and citation is also made to a number of cases decided by our courts of appeals; Good Roads Machinery Co. v. Broadway Bank, 267 S.W. 40; Handlan-Buck Mfg. Co. v. Wendelkin Construction Co.,
In the case at bar, to hold that the contracting company under the tax bill issued, could maintain the suit against the defendant would necessarily result in giving effect to the void contract. The distinction was pointed out in United Shoe Machinery Co. v. Ramlose,
The plaintiff sues as assignee of the tax bill, but his right to maintain this suit is not superior to the right which the contracting corporation *1057
would have had in a suit brought upon the tax bill. [Ehrhardt v. Robertson Bros.,
The mere fact that the defendant filed with the city clerk a notice that he desired the tax bill to be issued against his property to be payable in five annual installments,Estoppel. and that the plaintiff knew this, does not operate as an estoppel upon defendant. [Wetterau v. Trust Co.,
It is also urged that the judgment of the trial court violates the constitutional provisions against impairing obligations of contracts and taking property without due processImpairment of law, and under that contention, certain Federalof Contract. decisions are cited. The theory advanced is, that a ruling that the validity of the city ordinance may be attacked collaterally, "would impair the validity of a contract in the hands of an innocent holder for value of a tax hill negotiable by statute, and would deprive the plaintiff of his property without due process of law." We do not see the application of the cases cited, to the case at bar. The argument of counsel runs upon the theory that this is a suit to enforce a lien based on the tax bill, not on the contract. But, if we are correct in holding that the assessment evidenced by the tax bill, to be valid, must have back of it a valid contract for the construction of the improvement, and, if we are further correct in holding that the contract here in issue is void, there does not arise the question of impairment *1058 of the obligation of a contract. The plaintiff, in taking the assignment of the tax bill from a corporation, was obliged to take notice of the legal limit of the powers of that corporation. [7 R.C.L. p. 675.]
For the reasons indicated the judgment is affirmed. Seddon and Ellison, CC., concur.
Addendum
The foregoing opinion of LINDSAY, C., is adopted as the opinion of the court. All of the judges concur.