112 Wis. 354 | Wis. | 1901
The validity of plaintiff’s contract is assailed on the ground, among others, that it carried the indebtedness beyond the constitutional limit of five per cent, of the assessed valuation, and was therefore beyond the power of the district itself. That such was the fact is beyond dispute. Five per cent, of the assessed value was $3,578.20; the existing indebtedness on February 19, 1900, was $2,983.76; the constitutional limit of indebtedness was therefore $594.44,— less than $850. The contract was therefore forbidden by sec. 3, art. XI, of the constitution. Appellant, however, contends that, even though the express contract to pay for the “ mill-work ” furnished and performed by him be void, yet, as he has alleged and proved that the district
These cases all proceed upon the theory of rescinding a void contract and undoing the acts done in reliance thereon, so as to place the parties in the original status quo. None of them holds that a municipal corporation can become liable for a debt by implied contract in defiance of a direct statutory or constitutional prohibition against its becoming liable at all. Indeed, such prohibition is expressly mentioned in Thomson v. Elton as an insuperable obstacle to recovery. Other cases marking the distinction and enforcing such a prohibition might be cited almost without limit. A few will suffice: Richardson v. Grant Co. 27 Fed. Rep. 495; Gamewell F. A. T. Co. v. Laporte, 102 Fed. Rep. 417, 419; Litchfield v. Ballou, 114 U. S. 190; Mosher v. Independent Sch. Dist. 44 Iowa, 122, 126; Capital Bank v. School Dist. No. 53, 1 N. Dak. 479; McDonald v. New York, 68 N. Y. 23; Fox v. New Orleans, 12 La. Ann. 154; Joint School Dist. v. Reid, 82 Wis. 96; Earles v. Wells, 94 Wis. 285.
In the instant case we find the direct and positive prohibition against incurring the liability for the property and labor furnished by appellant, and that prohibition cannot be evaded by the legerdemain of substituting the fiction of an implied contract on which the prohibited liability may rest instead of the void express contract. He who deals with the officers of public corporations must take notice of the limits placed by law.upon the powers of those agents of the taxpayers. If he becomes party, however innocently, to an attempt to impose on the latter forbidden burdens he must expect to fail.
A much graver question, hardly suggested and not at*all
No rule is better settled than that, in the revision of govern'mental acts claimed to exceed the limits imposed upon such governing bodies by the fundamental laws under which they exist, the courts will uniformly strive to give effect to such acts so far as is possible without disobeying the restrictions so imposed, and will hold acts valid up to such limits, notwithstanding some excess beyond constitutional restrictions, if the latter can be separated and can be denied efficacy without defeating the clear and obvious purpose of the whole act. McCullough v. Virginia, 172 U. S. 102; Detroit v. Detroit City R. Co. 60 Fed. Rep. 161; Illinois T. & S. Bank v. Arkansas City, 76 Fed. Rep. 271; Kimball v. Cedar Rapids, 100 Fed. Rep. 802; Lewis v. Clarendon, 5 Dill. 329; Johnson v. Stark Co. 24 Ill. 75; Quincy v. Warfield, 25 Ill. 317; Briscoe v. Allison, 43 Ill. 291; State v. Allen, 43 Ill. 456; Scofield v. Council Bluffs, 68 Iowa, 695; Thompson v. Independent Sch. Dist. 102 Iowa, 94; Lynch v. The Steamer Economy, 27 Wis. 69; Chicago & N. W. R. Co. v. Langlade Co. 56 Wis. 614; Monroe W. W. Co. v. Monroe, 110 Wis. 11, 18; State ex rel. Hicks v. Stevens, ante, p. 170; Allen v. LaFayette, 89 Ala. 641. Among these will be found cases holding that an act of the legislature providing that certain coupons shall be receivable for all state taxes is valid as to all taxes except such as the constitution required shall be paid in money; that tax levies including illegal amounts may be valid for
In McPherson v. Foster Bros. 43 Iowa, 48, which is now certainly entitled to be considered a leading case, two propositions were decided. A contract of $15,000 having been made when the constitutional limit of indebtedness which might be incurred was $2,057.50, and that contract having been executed by the contractor, it was held that the promise of the school district to pay was valid and enforceable up to the constitutional limit, but invalid as to the excess. In that case, bonds of the district for the full $15,000 had been issued and were in circulation, and it was further held that $2,057.50 of the $15,000 bonds was valid, and that the
In Stockdale v. School Dist. No. 2, 47 Mich. 226, the opinion being by Cooley, J., the first proposition of the Iowa case was fully concurred in. There a contract to build a schoolhouse having been fully performed, to the loss of the contractor, the district voted to pay him in settlement $730, and issue bonds therefor, when the constitutional debt- limit was but $300. The action was to enjoin the issue of bonds. The court held the promise to pay $730 valid to the extent of $300, and void as to the excess, and enjoined the issue of bonds in excess of $300.
In Culbertson v. Fulton, 127 Ill. 30, was a fully executed contract to build waterworks for $11,619, made at a time when the constitutional limit permitted indebtedness of only $10,453. The court held the promise of the city binding to the extent of the $10,453, its debt limit, and enjoined further payment and the collection of so much of a tax levied therefor.
Chicago v. McDonald, 176 Ill. 404, has no resemblance in its facts, but both principles laid down in the Iowa case were expressly approved, and in that case it was declared, obiter, that even an executory contract, if divisible, would be restrained only for its excess above the constitutional debt limit; a doctrine not necessary to be considered in the instant case.
Henry A. Keith & Co. v. Du Quoin ex rel. Parks, 89 Ill. App. 36, dealt with a contract executed by the contractor to build waterworks at a gross,price of $13,486, made when the city’s debt limit permitted only $3,500. Held, that the city’s promise to pay was valid up to that limit, though void and unenforceable as to the balance.
May v. Gloucester, 174 Mass. 583, presented a contract indefinite in time, to pay $3 per day for hire of horses, under which some $400 had been earned. The officers making the con
In School Town of Winamac v. Hess, 151 Ind. 229, an entire contract for the building of a school-house for $16,896.60 was made, when the debt limit was $8,000. The court held the contract valid and binding on both parties, though executed only in part, and decided that the contractor was liable in damages for failure to complete, and that the town was liable upon its promise to pay up to the amount it could legally promise, to wit, $8,000. This decision was made in an action at law, and was accompanied by an intimation that a court in equity might relieve the contractor by the method of rescission for mistake.
In Citizens Bank v. Terrell, 78 Tex. 450, as to issue of bonds for waterworks in excess of constitutional limit, the court held- that an amount up to that limit represented valid indebtedness; that,, if evidence showed the bonds to have been issued at different times, the earlier issues should be enforced, each for its full face, but, if issued all at once, each bond should be valid for a proportionate part of the whole permitted debt.
In Daviess Co. v. Dickinson, 117 U. S. 657, bonds were issued and put in circulation to the amount of $320,000, when only $250,000 were within the power of the county officers. The court held that the county should be liable to the amount authorized, namely, $250,000, but nob liable for the balance, and remitted the case to take evidence as to how severance should be made, indicating that if the bonds were not issued all at once, those first issued would be valid up to the amount specified.
In Francis v. Howard Co. 50 Fed. Rep. 44, bonds were issued all at once to the amount of $35,000, in face of a constitutional limit of $13,982.77. The court applied the rule o'f McPherson v. Foster Bros., holding the county liable for the
In Ætna L. Ins. Co. v. Lyon Co. 82 Fed. Rep. 929, the plaintiff was the original payee and holder at the time of suit of an entire issue of $120,000 of refunding bonds issued at a time when the constitutional debt limit had already been reached. The court held it competent for the county to issue new bonds to pay old debts, as the indebtedness was not thereby increased, but that the new bonds-would not be valid except so far as the proceeds of them had been actually applied to the old indebtedness, and would be valid to that extent. The cause was remanded for evidence as to what part of the $120,000. had been so used, with directions to cancel all excess of bonds above that amount.
Crogster v. Bayfield Co. 99 Wis. 1, was a suit in equity to cancel the entire issue of $240,000 of railroad-aid bonds, the county debt limit being approximately $225,000. It appeared that under the contract each section of the road was to be compensated by a specified quantity of bonds, the last section to justify issue of $25,000. The court held that, so far as the contract was severable, it was binding, and that all of the bonds except the last $25,000 should be held valid and binding obligations. Those, although they only exceeded the debt limit by $15,000, were held all invalid, for the reason that the contract which they were to compensate, namely, the single section of the road, was entire, and the bonds were all issued at once, so that none of them could have priority over others. The court, while enforcing the general principle of liability up to the limit of power upon acts exceeding it, repudiated the doctrine of McPherson v. Foster Bros. and other cases following it, that a total and simultaneous issue of bonds could, with practical safety, be scaled down to some other figure, therein resting upon the authority of Hedges v. Dixon Co. 150 U. S. 182. While the reasons for this repudiation were not very fully set forth, of
The last case on the subject is Herman v. Oconto, 110 Wis. 660, where this court held that a promise to pay by a city upon a sewer contract exceeding the debt limit, would be held valid up to that limit, provided the duty of the contractor was of such character as to be capable of severance. It was not necessary in that case to discuss, and the court did not discuss, whether the same holding might not have'been made if the contractor’s obligation had been entire.
Thus we find that the principle of liability of municipal corporations with limited powers up to the limit of those powers, even upon an act or contract some part of which is in excess thereof, is well supported by authority from a multitude of courts, and impliedly at least by this court. The only difficulty which courts have at any. time deemed at all serious was whether a severance could be made at the dividing line between that which was .legal and that which was forbidden, and there is grave discussion in several of the cases whether the duty assumed by the contractor was capable of severance. But is this necessary or at all material to the equitable purpose which has induced the adoption of the general principle above stated? It seems to us not, in cases like this, where the contractor has fully performed his entire contract; regardless of whether there was a line of severance in the course thereof, and where the only obligation of the municipality is the mere payment of money. Such an obligation is in its nature severable, as one dollar is severable
But it is argued by the respondent that, even conceding the power of the superior agent of the school district, namely, the meeting of the electors, to make a valid contract, yet no such contract had been made, because the subagency, the school board, with whom plaintiff’s transaction was had, did not have authority to make it, for- the reason that the board is by sec. 434, Stats. 1898, limited, in building school-houses, to “funds provided for that purpose,” and that, at the time of making the contract, the only funds provided were the $2,580 borrowed from the sta¿fce, which had been more than exhausted. This objection would seem to be insuperable to the original validity of the contract made by the school board to pay either the sum of $850 or the sum of $594.44. Capital Bank v. School Dist. No. 53, 1 N. Dak. 479; Nevil v. Clifford, 63 Wis. 435, 443. It is, however, too thoroughly settled to need more than statement that what the district meeting could in advance
Upon the whole case, therefore, we conclude that plaintiff was entitled to recover judgment for the last-mentioned sum, and that the judgment rendered was erroneous. Nothing appears in the record to justify recovery of interest prior to commencement of the action.
By the Court.— Judgment reversed, and cause remanded with directions to render judgment for the plaintiff for five hundred ninety-four dollars and forty-four cents ($594.44), with interest from November 22, 1900.