120 P. 582 | Okla. | 1911
The plaintiff in error, as plaintiff, instituted its action in the lower court against the defendant in error, as defendant, declaring in its petition in part as follows:
"That on and prior to the first day of July, 1903, the said defendant was the owner of a water-works system in said city. That on the said first day of July, 1903, for the purpose of conducting and supplying said water-works system with coal for fuel, oil, etc., the said city purchased of this plaintiff a large amount of merchandise. That at said time the said city was the owner and operator of a light system for the purpose of furnishing light for the use of said city and its inhabitants. That on the said first day of July, 1903, the said city purchased of this plaintiff a large amount of merchandise, such as carbons, lamps, coal, oil, repairs and supplies. That at the time of the purchase of said articles it was agreed between plaintiff and defendant that the same should be listed and a complete inventory made thereof and the said goods inspected and delivered to said city, all of which was done by the agents of plaintiff and defendant.
"That a true and exact account and inventory of all the said property and merchandise so purchased by defendant from plaintiff and delivered in accordance with the agreement and arrangement between plaintiff and defendant, showing the description of each item and the price which the said defendant was to pay therefor, and which was the reasonable and actual value thereof at said time and place, is hereto attached, marked 'Exhibit A' and made a part hereof.
"Plaintiff further says that said contract, agreement and arrangement was verbal and not in writing, but that the same was fully executed and the property mentioned and described in said exhibit A was then and there delivered by plaintiff to defendant and the said defendant has used and consumed and ever since retained and appropriated said property to its exclusive use and benefit.
"Plaintiff further says that said defendant has often been requested to pay for said property but that said payment has not *595 been made and defendant has positively refused and neglected to pay for the same, after a proper and formal bill and demands had been presented to said city and the officers thereof. That no part of said claim or demand has been paid.
"Wherefore plaintiff prays judgment against said defendant for the amount of said indebtedness in the sum of $906.21, with interest thereon from the 1st day of July, 1903, at the rate of 7 per cent per annum, for the costs of this action and all other proper relief."
On November 28, 1906, the defendant demurred to the petition, which was overruled, and exceptions saved. On December 11, 1906, the defendant answered by general denial, and, further, by averring that "all articles received of plaintiff and mentioned in plaintiff's petition were purchased by said city from said plaintiff under and by virtue of a written contract executed by plaintiff and defendant, bearing date of June 27, 1903", and that same had been paid for. On September 6, 1905, plaintiff filed its reply, denying each and every allegation of said answer, except admitting the execution of the written contract, but averred "that said contract was for the purchase and sale of the electric light, ice and power plant herein referred to and with the exceptions herein specified, and was not intended to include or cover the property and items set forth in the plaintiff's petition, such as supplies, coal, etc., not in use, or never having been in use, in connection with the said light, water and power plant, and at the time of executing and entering into the said written contract this plaintiff fully understood and believed that said written contract had nothing to do with the articles," etc.
On October 12, 1908, the plaintiff filed a motion for judgment on the pleadings, which was denied. A jury being waived, said cause was tried to the court. The defendant objected to the introduction of any evidence under the petition, for the reason that the same failed to state facts sufficient to constitute a cause of action, which was overruled, and exceptions saved.
After the evidence was introduced on the part of the plaintiff, the defendant interposed a demurrer to the same, in part, in haec verba: *596
"The city further demurs, for the reason that the evidence of the plaintiff shows that the goods purchased were personal property, and the contract price was more than five hundred dollars, and fails to show that it was ever submitted to a vote of the people of the city of Perry."
The record then further recites:
"Thereupon counsel for the respective parties argued the said demurrer to the court. Mr. Harris: The plaintiff now, pending the consideration of the demurrer to the evidence, offers to remit all with the exception of five hundred dollars of the amount claimed, and demands judgment for five hundred dollars and costs. Mr. Johnson: That don't help him, as a matter of law. Mr. Harris: With interest from the date of the taking of the property. Mr. Whiteside: If any of it is void, it is all void. The Court: Yes, I think so. Thereupon counsel for the respective parties continued to argue the said demurrer. The Court: Demurrer sustained. Mr. Harris: Exception. The Court: Do you desire to stand on the demurrer, Judge Harris, and take time? Mr. Harris: I think I better file a motion for a new trial. I will prepare it right away."
The undisputed evidence in this record on the part of the plaintiff in error shows that all of this property was received under a verbal contract by one purchase, and that not only the value, but also the agreed price, exceeded five hundred dollars.
Section 2 (538), article 1, chapter 14, Statutes of Oklahoma Territory 1893, provides:
"All cities governed by the provisions of this act, shall be bodies corporate and politic, and shall have power to sue and be sued, to purchase and hold real and personal property for the use of the city, to sell and convey any real or personal property, owned by the city, and make such order respecting the same as may be conducive to the best interests of the city, to make all contracts and do all other acts in relation to the property and affairs of the city, necessary to the good government of the city, and to the exercise of its corporate and administrative powers, to have and use a corporate seal, and alter the same at pleasure, and to execute such other and further powers, as are, or may be conferred by law: Provided, however, That no real estate shall be bought or sold, nor shall any personal property, where the value of the personal property, contracted for at one purchase, *597 exceeds five hundred dollars, until the purchase or sale is authorized by a majority vote of the electors, resident of the city or village."
This section was construed by the Supreme Court of Oklahoma Territory in Fire Extinguisher Manufacturing Company v. City ofPerry,
It is insisted by counsel for the plaintiff in error that the question of such contract being void by virtue of said section, requiring all purchases of personal property in excess of five hundred dollars to be approved first by the electors of such municipality, was not raised in the lower court; but from the foregoing excerpt it would seem that the court below, as well as the parties thereto, treated this question as properly raised. This being the case, the plaintiff in error will not be permitted to change front in this court and insist that such question was neither properly raised nor properly before the trial court. Harris v. First National Bank of Bokchito,
Counsel for plaintiff in error in their brief say:
"Counsel doubtless had in mind, at the time of interposing this demurrer, the case of Fire Extinguisher Mfg. Co. v. Cityof Perry,
Counsel thus assume, at least, if not concede, that the question was properly raised in the lower court. He pleads that the property was delivered to the city under a verbal contract. The *598
evidence that he offers to sustain his petition tends to sustain that allegation. He seeks, however, in the face of his petition, to waive the express verbal contract and recover under quantum meruit, which is an action in assumpsit, or upon an implied contract. Not only in the record, but also in the briefs, it appears to be conceded that the question as to the purchase of said personalty was not submitted to the electors of said municipality for their approval. Such being the case, if such contract for said reason was void and no recovery could be had, either on said contract or in quantum meruit, which is an action in assumpsit, this court would do a useless thing by reversing this case and remanding it for another trial. For the defendant, after the cause was remanded, would certainly be permitted to amend its pleadings and set up that said property was delivered either under an express or implied verbal contract, in violation of section 538, supra, and that therefore no recovery could be had in quantum meruit. Under such conceded facts, this court should pass on the question on the theory that it was properly raised before the trial court.Kuchler et al. v. Weaver,
In Fire Extinguisher Mfg. Co. v. City of Perry,
"Where a city council purchases fire apparatus at one purchase, and agrees to pay the sum of $1,100 therefor, no election having been held to authorize such purchase, the contract is void, and the city council cannot validate such illegal contract by splitting the sum into three parts of less than $500 each, and executing warrants therefor, and the payment of warrants so executed may be defeated by the city:"
At page 433, the court said:
"Section 538 is intended to limit the power of the city council in the purchase of personal property at one time, to sums of $500 and less, unless such purchase shall be authorized by a majority vote of the electors resident of the city. If the council *599 deem it advisable to make a purchase of personal property the value of which is in excess of $500, it becomes their duty to submit the question as to whether such purchase shall be made to a vote of the resident voters of the city, and the power to make such purchase can only be exercised when a majority vote of the electors voting on such proposition has authorized the council to make it."
This language applies equally to a claim under quantummeruit.
In Salt Creek Township v. King Iron Bridge Mfg. Co.,
"Upon the facts disclosed in the record, and the provisions of the statute authorizing, under certain circumstances, township officers to build and pay for bridges, we think the bridge and manufacturing company cannot recover. It seems to be conceded that the company cannot recover upon its contract. The only claim made is that the township is estopped, and should be required to pay the reasonable value of the bridge. At the time of the execution of the contract, and also at the time the bridge was constructed, the public records of Salt Creek township showed that its officers had no power or authority to make any contract for the bridge or to issue any bonds. The proposition submitted to the people for the building of a bridge did not receive three-fifths of their votes. It therefore was defeated. The statutory limitation of indebtedness in the township, as prescribed in par. 413, was also an inhibition against the making of the contract. The township board, and, possibly, the bridge and manufacturing company, mistook the law. In any event, the township officials acted in direct conflict with the provisions of the statute prescribing their duties and limiting their powers. The records of the township were public, open to all, and the bridge and manufacturing company was not and could not have been misled. The bridge was constructed upon a public highway within the township, but used by the people generally.
"It is a well settled rule that township or other municipal officers cannot do by indirection that which they might not do directly. (The State ex rel. v. Comm'rs of Marion Co.,
"There is no innocent holder of bonds in this case, and in fact no innocent parties. The township officers, as well as the bridge and manufacturing company, are presumed to know the law. The statute clearly declares the conditions upon which a municipal township may obtain bridges; but if the provisions of the statute are overlooked, or voluntarily cast aside by the parties, with full knowledge of all the facts, no estoppel of any kind can be created. There is a seeming hardship in refusing to pay for the bridge after the money of the company has completed it and it is in use upon a regular laid-out public highway. But the want of legal authority to contract was known, or ought to have been known, by the company before it expended any of its money. Therefore it is at fault. Those dealing with a township must see to it that its officers have power to act. In this case, nothing was concealed and all the facts appear upon the public records. A township or other municipality can only act by the mode prescribed by law. Any other rule leaves the taxpayer at the mercy of the officers of the township and contractor, and would render all statutory provisions of limitation of power nugatory. (Lewis v. Comm'rsof Bourbon Co.,
In Allsman et al. v. Oklahoma City,
In The City of Oklahoma v. The T. M. Richardson LumberCompany,
In Doyle Cress v. School District, by Robertson, Commissioner (30 Okla. ___), not yet reported, it was held that where the majority of the members of a board of a school district employed a law firm to defend the board in a suit brought against it, at an agreed fee of $75, though the board may have failed to meet in an official capacity and authorize such employment, yet, if the service was actually rendered, and the contract became an executed one, and was of the reasonable value claimed, to wit, $75, and the school district received the benefit therefrom, the board was estopped from pleading the irregularity of said employment. This holding is in line withAllsman et al. v. Oklahoma City, supra, and City of OklahomaCity v. T. M. Richardson Lumber Company, supra. The school board had the authority to make the contract of employment without the approval of the electors of said district or any other independent agency. *602 The vice complained of went to the want of action of the school board as to what it was empowered to do, and did not consist of a violation of any statute or constitutional provision placing a limitation upon its powers.
In State v. City of Pullman,
"It is claimed, however, by the appellant, that, having received the benefits of the contract which the city entered into, it ought to be estopped from denying its validity, also that it had ratified the contract by receiving the benefits. It is well established that the power to ratify is coextensive only with the power to contract, and that an act which was illegal for want of authority on the part of the contracting powers cannot be ratified. There has been a conflict of opinion on some branches of this question, but an investigation of the authorities will show, we think, that where courts have estopped municipalities from interposing the plea of ultravires, and from escaping the responsibility of their acts, it has been where there has been a defect in the execution of the contracts, as in the issuance of bonds, etc., and not where there has been an absolute want of power on the part of the municipality to contract. The most of the cases cited by the appellant, as we indicated before, were cases of private corporations. The appellant cites Hitchcock v. Galveston,
"The law is announced by Mr. Dillon in his work on Municipal Corporations, sec. 457 (4th Ed.), in a manner so concise *604 and explicit that we cannot do better than give it room in this opinion. It is as follows: 'The general principle of law is settled, beyond controversy, that the agents, officers, or even city council of a municipal corporation cannot bind the corporation by any contract which is beyond the scope of its powers, or entirely foreign to the purposes of the corporation, or which (not being legislatively authorized) is against public policy. This doctrine grows out of the nature of such institutions, and rests upon reasonable and solid grounds. The inhabitants are the corporators; the officers are but the public agents of the corporation. The duties and powers of the officers or public agents of the corporation are prescribed by statute or charter, which all persons not only may know, but are bound to know. The opposite doctrine would be fraught with such danger, and accompanied with such abuse, that it would soon end in the ruin of municipalities, or be legislatively overthrown. These considerations vindicate both the reasonableness and necessity of the rule that the corporation is bound only when its agents or officers, by whom it can alone act, if it acts at all, keep within the limits of the chartered authority of the corporation. The history of the workings of municipal bodies has demonstrated the salutary nature of this principle, and that it is the part of true wisdom to keep the corporate wings clipped down to the lawful standard. It results from this doctrine that contracts not authorized by the charter or by other legislative act — that is, not within the scope of the powers of the corporation under any circumstances — are void, and in actions thereon the corporations may successfully interpose the plea of ultra vires, setting up as a defense its own want of power under its charter or constituent statute to enter into the contract,' — citing authorities too numerous to reproduce. And if anything were wanting to elucidate the wisdom of the text announced, or to show the pernicious results of tolerating the practice indulged in by municipal authorities to exceed their legal powers, the history of the cities of the Pacific Coast furnishes the instance, where, under the stimulus of rivalry in the growth of cities, obligations have been incurred which have bankrupted the cities and impoverished the inhabitants by excessive taxation rendered necessary to meet such obligations.
"In Brady v. City of New York, 16 How. Prac. 432, it was held that, where the contract under which work was done was void because entered into in violation of the charter, the contractor could not recover for the work in any form, neither under the contract nor as upon a quantum meruit, and that the subsequent *605 ratification of the contract by the common council, whether before or after the work was done, did not make it binding upon the corporation. It was further held that, where the officers of a corporation do an act in excess of the corporate power, the corporation is not bound, and, when the statute under which the corporation acts restricts its action to a particular mode, none of the agents through whom the corporation acts can bind it in any other than the mode prescribed. This is a very instructive and well-considered case. In Mayor, etc., ofBaltimore v. Reynolds, 83 Am. Dec. 535, it was held that a person dealing with agents who act under a special or express authority, whether written or verbal, is bound at his peril to know what the power of the agent is, and to understand its legal effect, and, if the agent exceeds the boundary of his legal powers, the act, as far as it concerns the principal, is void. The authorities are collated and distinguished in this case, and, in answer to the plea of hardship, the court quotes from Lee v. Munroe, 7 Cranch, 370, 3 L.Ed. 374, where it is said: 'It is better that an individual should now and then suffer by such mistakes than to introduce a rule against an abuse of which, by improper collusions, it would be very difficult for the public to protect itself.' In fact, the rule is so universal that it seems unnecessary to cite further authority.
"But we are not without precedent in our own decisions. InArnott v. City of Spokane,
The question involved in State v. City of Pullman, supra, was, the municipality being prohibited from contracting for the extension of its water system without the approval of its citizens, whether quantum meruit or assumpsit would lie on account of the benefits received. This case is in point and sustains the judgment of the lower court.
In Wiegel v. Pulaski County,
"Can the county court authorize the letting of a contract to construct a turnpike road, without an appropriation made therefor? The statute itself answers this question in the negative, in section 1279, Sand. H. Dig., which provides that 'no county court, or agent of any county shall hereafter make any contract on behalf of the county unless an appropriation has been previously made therefor, and is wholly or in part unexpended.' This is the act of March 19, 1879. Construing this act, this court held, in the case of Fones v. Erb,
"The counsel for appellant contends that the validity of the contract with the county is res adjudicata, because the work under it was accepted and approved by the county, and allowances were made the contractor upon the work. But we think otherwise. There was no jurisdiction, without an appropriation first made, to make the contract, upon the part of the county, and *608 without such an appropriation it was void, and no adjudication could make it valid. If there was no power to make the contract, it was not, and could not be, ratified by the county's acceptance of the work done under it. * * * If this were not true, the county court would be above the law, and could make contracts without the authority of law, and then ratify them, and bind the county, and thus the law would be set at defiance. It is a well-settled rule of construction of grants by the Legislature to corporations, whether public or private, that only such powers and rights can be exercised under them as are clearly comprehended within the words of the act, or derived therefrom by necessary implication. * * * There is not only no express or implied power in the county court to make such a contract without an appropriation first made for the work to be done, but, as we have seen, there is a positive inhibition against it, in the statute quoted above."
In Moss et al. v. Sugar Ridge Tp. of Clay County (Ind. App.) 67 N.E. 460, it was held that "a municipal corporation does not become liable for a debt by substituting the fiction of an implied contract for an express contract, void for noncompliance with the terms of a statute not penal." See, also, Berka v. Woodward,
The judgment of the lower court is affirmed.
All the Justices concur.