131 Va. 142 | Va. | 1921
after making the foregoing statement, delivered the following opinion of the court:
The questions presented to us for decision by the assignments of error will be disposed of in their order as stated below.
1. Does such contract fall .within the inhibition of section 185 of the Constitution of Virginia?
This question must be answered in the negative.
Section 185 of the Constitution of Virginia, so far as material, reads as follows:
“Neither the credit of the State, nor of any county * * shall be directly or indirectly, under any device or pretence whatsoever, granted to or in aid of any person, association or corporation * * *.”
The contract in question did not directly or indirectly in any way whatsoever grant “the credit” of the county “to or in aid of any person, association or corporation.” That would have been true if the object of the contract had been to benefit the contractors in any way, as, for example, to enable any of them to obtain the stone on the credit of the county, when upon their own credit they could not have obtained it; or to enable any of the contractors to make a greater profit by obtaining the stone at a reduced price because of the pledge of the credit of the county. But the contractors were not expected and could not in the nature of the case derive any benefit from the contract, and it was not made for their benefit. It was made solely for the benefit to the county itself, and not for or in aid of any
Lynchburg, etc., Ry. Co. v. Dameron, 95 Va. 545, 28 S. E. 951, is relied on by appellee as a holding contrary in principle to the conclusion which we have reached above. We do not so construe that case. The controlling principle upon which that case was decided is that a municipal corporation cannot, under legislative authority merely to make contracts of its own, for its own benefit, become the surety for another corporation or individual for the benefit of the latter, although the municipality may indirectly be benefited thereby, for the reason that such benefit is indirect and uncertain. Whereas, where the contract is authorized and made by the municipality directly for its own benefit, and not at all for the-benefit of another, “the avails or consideration” for the contract cannot be diverted to any illegitimate purpose. The latter, precisely, is the situation with respect to the contract involved in the instant case, and hence it is apparent the case last cited has no application to the case now before us.
This question must be answered in the affirmative.
This question must be answered in the negative.
The contract of the county with appellant was not limited in its operation to stone furnished to Phipps under any particular collateral contract of appellant with him; nor, indeed, to stone furnished to any particular contractor. The contract with appellant embraced all the stone which appellant might supply to any and all contractors for use in the road work in and for the county of Wise embraced in the road-building undertaking of the county mentioned in the agreed statement of facts, under any and :all contracts of appellant with such contractors. covering the furnishing by appellant to them of the stone at the price stipulated as aforesaid. Further, the second agreement aforesaid in no way operated to increase the liability of the county under its contract with appellant, and so was of no detriment to the county.
4. Was the action of appellant in merely notifying the board of supervisors of the county on May 12, 1914, that the bill for stone it furnished Phipps in July and August, 1913 (which amounted to $2,425.00, at the price stipulated in the contract between the county and appellant), was then (May 12, 1914) still unpaid, without expressly notifying the county that the appellant held it liable under the contract with him aforesaid, such action as released the county from the obligation of such contract, in view of the fact that Phipps had been adjudged a bankrupt on August 28,1913, and the county did not file its answer in the Phipps bankruptcy proceeding until October 27, 1914, in which answer the county did not set up its liability to appellant under said contract with him, but might have done so and (as is admitted in argument before us for the county) might have had it allowed against the balance then in the hands of the county due Phipps which was in excess of said $2,425.00 claim? Whereas, not having done so, the county was required to pay and did pay such balance over into the hands of the trustee in bankruptcy.
This question, too, must be answered in the negative.
We think that in view of the fact that Phipps was adjudicated a bankrupt in August, 1913, the notice nine months thereafter which was given by appellant to the board of supervisors of the county of the amount still due him and unpaid for the stone, which the board of supervisors knew appellant had furnished in accordance with his contract with the county, was sufficient notice to the county that the appellant claimed that the county was liable therefor under its contract with appellant. The notice
The order under review must, therefore, be reversed, and this court will enter an order in favor of the appellant for the $2,425.00 amount of its claim, with interest thereon from May 12, 1914, and with costs.
Reversed, and final order entered.