82 Mo. App. 655 | Mo. Ct. App. | 1900
Lead Opinion
The defendant O’Connor is a contractor who paved a street in Kansas City under an ordinance thereof. This action is on the bond given by O’Connor as principal and the other defendants as sureties for the faithful performance of the contract, wherein it was alleged to have been a part of the contract that O’Connor was to keep the street in rep'air
The contract embodied an agreement not only to pave and keep in repair, but also to sprinkle the street in question. The ordinance, the bids, the letting of the contract and the contract itself, all contemplated and provided for the paving, repairing and sprinkling as one work for one entire sum. There was no separation.
That portion of the contract providing for sprinkling the street was ultra vires. It was not within the power of the city to lay a special tax against the abutting property of the citizen for the purpose of paying for sprinkling. A special tax against abutting property is based and sustained on the idea that- the work for which the tax is laid is an improvement of the property, and sprinkling to keep down the dust, while good for the comfort of the inhabitants, is too intangible to be denominated an improvement of the property. Chicago v. Blair, 149 Ill. 310; Ins. Co. v. Prest, 71 Fed. Rep. 817; Pettit v. Duke, 10 Utah, 311.
We therefore have a contract and a bond which provide for doing a work, as an entirety — inseparable—a part of which is illegal and void. Under such condition the whole contract is void. Virden v. City of St. Louis, 131 Mo. 26; Sumner v. Summers, 54 Mo. 340.
But it is argued for the plaintiff that since O’Connor, the contractor, has been paid for the work as provided by the contract, it has become performed by the city and that he (or his sureties standing in his shoes) can not set up ultra vires against the city. The authorities on this phase of the doctrine of ultra vires are not in accord. But in our view the reason of the matter is, that if a contract is void it can not be validated by being partly performed. The limit to the right of a corporation to contract is made by the policy of the law
Contracts ultra vires can not be likened to contracts within the statute of frauds where part performance ousts the
This is a different case from that where a contract ultra vires had been performed by both sides, the status of the parties become fixed and the whole matter at an end. In such instances courts rarely disturb the condition in which the parties have placed themselves. Neither party could make out his case without showing his own violation of the law. This case is founded on the fact that a part of the contract, to wit, repair, had not been performed and it is for that alleged dereliction that damages are sought. And in order to sustain its case the city proposes to rely upon a contract which was forbidden by law.
But if, as claimed, the city has paid O’Connor for the, work, it must not be understood that it is without remedy. It is without remedy on the contract for that, as we have seen, is void. But it may sue'O’Oonnor on the case it has outside the contract. That is, O’Connor can not keep the consideration and yet refuse to perform the work for which he received the consideration.
“A contract ultra vires being unlawful and void, not because it is in itself immoral, but because the corporation, by the law of its creation, is incapable of making it, the courts, while refusing to maintain any action upon the unlaw*663 ful contract, have always striven to do justice between the parties, so far as could be done consistently with adherence to law, by permitting property or money, parted with on the faith of the unlawful contract, to be recovered back, or compensation to be made for it.”
“In such case, however, the action is not maintained upon the unlawful contract, nor according to its terms; but on an implied contract of the defendant to return, or, failing to do that, to make compensation for property or money which it has no right to retain. . To maintain such an action is not to affirm, but to disaffirm, the unlawful contract.” Transp. Co. v. Car Co., 139 U. S. 60.
The plaintiff may recover outside the contract “to the extent of the benefit received by the defendant from the execution of the agreement by the plaintiff.” Compress v. Planters’ Press, 70 Miss. 669; Gas Light Co. v. United Gas Co., 85 Maine, 541; Reese on Ultra Vires, see. 74, and authorities cited.
So far as the relief is concerned, there is analogy between a contract disavowed on account of ultra vires and on account of the statute of frauds. In the latter case, as we decided this term in Andrews v. Broughton, if one who has received money or property on a contract which he avoids by the statute of frauds, he is liable to an action for the money, or the value of the property.
Since this remedy of the city is not upon the contract, but rather in disaffirmance of it, and so it is stated by the foregoing authorities, it follows that the sureties are not liable on the bond, for the bond is conditioned for a performance of the contract, which, ¿s we have seen, is an illegal thing and ought not to be performed. The sureties only stand for the principal on the contract. - If the contract is void no liability attaches in the absence of a provision to that effect. O’Connor not being liable on the contract, there can be no default and, of course, no liability can attach to the sureties.
It is so ordered.
Concurrence Opinion
(concurring): — But it is contended by the city that even if the correctness and applicability of the principles already stated be conceded, still the demurrer was improperly sustained. It is insisted that even if the sprinkling part of the said contract is ultra vires, that the other part may be enforced. Whether or not this insistence can be sustained depends upon whether or not the consideration for the promise of the sureties is severable, and if so, whether or not the latter is divisible and apportionable to the several parts of the consideration so far as to be attributable exclusively to a valid consideration.
The eff ect of the contract of guaranty sued on is, as to the sureties, no more than a promise on their part, that if their principal should fail to perform his contract with the city for the doing of the things therein specified, and that in consequence of his default the city engineer should cause such things to be done, then, in that event, they would pay the cost thereof not to exceed the sum of two thousand five hundred dollars. The indemnity was promised to secure the performance of two things, one of which was to keep in repair a certain macadam pavement which was legal and the other to sprinkle said pavement which was illegal. Not illegal in the sense of malum in se or malum prohibitum, but nevertheless illegal, or contrary to law. Reese on Ultra Vires, secs. 56, 57; State v. Distilling Co., 29 Neb. 700.
It seems to us to be an elemental principle of the law of contracts that if there is one entire consideration for two several contracts, and one of these contracts is for the perform
In Webb’s Pollock on Contracts [new Ed.], 321, 322, it is stated that, if any part of the consideration for a promise is unlawful the whole agreement is void. For it is impossible in such case to apportion the weight of each part of the consideration inducing the promise. In other words, where independent promises are in part lawful and part unlawful, those which are lawful can be enforced, but where any part of an entire consideration is unlawful all promises founded upon it are void. In Leake on Contracts, 677, it is stated: “If the promise is divisible and apportionable to the several parts of the consideration it may be supported so far as attributable to a valid consideration.” In Bishop v. Palmer, 146 Mass. 469, it was said: “As a general rule where a promise is made for an entire consideration, a part of which is fraudulent, immoral or unlawful and there has been no apportionment furnished by the parties themselves it is well settled that no action will lie on the promise.”
It has been decided that where one purchased two pieces of land, each for a specific price, and took a conveyance for both and was afterwards ejected from one for defect of title he was entitled to recover on the covenants of warranty. Johnson v. Johnson, 3 Bos. & Pul. 162; Miner v. Bradley, 22 Pick. 459. In Frazier v. Thompson, 2 Watts & Serg. 235, it was said: “If the contract had been that in consideration of all the articles furnished by plaintiff the defendant gave the note, it would be an entire contract and the illegality of the consideration in part would avoid the whole contract. And the reason is that in the supposed case we can not separate the good from the bad. But where the contracts are separate and distinct no difficulty exists.”
“In such contract the consideration is not single and entire as -to all its several provisions as a whole; until it is performed it is capable of division and apportionment. Thus though a number of things be brought together' without fixing an entire price for the whole, but the price of each article is to be ascertained by rate or measure as to the several articles, or when things, being of different kinds, though the total price is named but a certain price is affixed to each thing, the contract in such cases may be treated as a severable contract for each article although they all be included in one instrument o-f conveyance or contract.” It is further held in the same case that where there is a contract to pay a gross sum of money for a certain definite consideration it is entire and not severable or apportionable in law or equity.
In the present case we have but a single promise to pay a certain -sum in gross -on the happening of two contingencies. How can such promise be. divided and apportioned to the two undertakings of the guarantors? Suppose the two undertakings — two things guaranteed, are severable and distinct, how is the promise of -the guarantors to be divided and apportioned ? What part of the indemnity which the guarantors promised to pay shall be apportioned to each breach of the undertaking ? If one of the undertakings be unlawful must the entire indem
It seems to us, in the light of the principles to which we have already referred, that the promise of the sureties is not divisible or apportionable to the several parts of the undertaking of the principal and for that reason can not be enforced. Had it been provided in the contract that if the principal made default in performance thereof that the city could then cause performance to be made at the cost of the sureties not to exceed a certain amount each for the sprinkling and the street-repairs — the two together being equal to the amount of the promised indemnity then we would have had a division and apportionment of the promise to each default, and a promise that was susceptible of enforcement as to so much thereof as was supported by a legal consideration. But we have nothing of the kind.
In Peltz v. Eichele, 62 Mo. 171, the question was as to the divisibility of a covenant, to do certain things. The covenantor did not as here enter into a bond of indemnity with sureties thereon to secure performance. The suit was not then as here to recover the entire indemnity for the breach of only one of the undertakings — the lawful one. The question of the division and apportionment of the promise of indemnity did not arise and was not discussed in the case. Accordingly, we think the jugment should be affirmed.
Rehearing
ON MOTION NOE EEHEABING-.
Counsel cité the case of City of St. Louis v. Davidson, 102 Mo. 149, as being contrary to the foregoing views on the question of ultra vires.
We do not think so. That case conceded that if the contract is unlawful estoppel will not save it. It does, however, hold that if the contract is not unlawful or forbidden, the party who has received the benefit can not plead ultra vires—
“Upon a contract which is ultra vires in the true sense of that expression, that is, upon a contract relating to matters wholly outside of the chartered powers of the corporation, there is no liability upon the contract; and the corporation is not estopped to set up the defense.” 2 Dillon Mun. Corp., sec. 935; 1 lb., sec. 457.
But another consideration is, that in this case there has really been no part performance by the city. It has not paid for the work, since all it did was to issue void tax bills in settlement thereof.
The motion for rehearing should be overruled,
Concurrence Opinion
on further consideration having concluded the original opinion is not in conflict with the cases there mentioned by him, concurs therein.