Lead Opinion
After alleging that the plaintiff is a golf course greens keeper by occupation and the corporate character of the defendant, the complaint continues :
“That on or about the 15th day of April, 1934, the defendant city, by its mayor, Walter Schellpfeffer, entered into an agreement with the plaintiff whereby it was agreed that the*627 plaintiff would perform services as foreman and overseer and supervise the work on Mayville City Works Project No. 14B123 and it was further agreed that the said city would pay the plaintiff the reasonable value of his said services as supervisor.
“That in accordance with said agreement and following said agreement plaintiff supervised the work on Mayville City Works Project No. 14B123 from the 28th day of April, 1934, down to and including the 12th day of November, 1934, and worked as such supervisor on said project a total of 1,176 hours, which services were reasonably worth the sum of $1,058.40, no part of which has been paid. That the common council of the said city of Mayville were cognizant of the said hiring of the said plaintiff by the mayor of the city of Mayville and that they acquiesced therein and accepted the benefits of plaintiff’s labor under the said agreement and co-operated with plaintiff as such supervisor in placing the unemployed of the city of Mayville at work upon the said project under the supervision of plaintiff and the said council of said city ratified the said employment of plaintiff by permitting him to render the said services over the aforesaid period of time and by accepting the benefits of said services.”
On behalf of the defendant it is argued that the mayor had no authority to bind the city; that the city could be bound only by .adoption of an ordinance determining the compensation (sec. 62.26 (5), Stats.) ; that, if the council had power to ratify, the act of ratification should be an act of a dignity equal to that required by statute to authorize the making of a contract in the first instance, hence there can be no ratification by acquiescence.
Plaintiff contends that the contract in question was one which the defendant city had the power to make. The contract having been made by the mayor with the knowledge of the common council; the council having accepted the services contracted for, it thereby ratified the act of the mayor, and the defendant is liable accordingly. The plaintiff also contends that the defendant, having acquiesced in and accepted
The contentions of counsel have led us to re-examine the entire question of the liability of municipalities for moneys received, services rendered, or goods delivered and accepted where no formal contract has been entered into in the manner prescribed by statute by the municipality sought to be charged. It is apparent from a consideration of the cases that the court has not always used the terms “ratification,” “acquiescence,” and like terms consistently. It is also clear that principles laid down in one class of cases are sometimes carried over into other classes of cases without regard to the fundamental differences in the cases, as, for instance, the difference between an action brought to restrain payment of money out of the treasury and one brought to recover back into the treasury money that has been paid. (See Ellefson v. Smith (1924),
ToJ state the facts in the several cases, analyze them, and distinguish the cases would extend this opinion to an unwarrantable length. The cases examined, not cited in the opinion, are listed below,
While the cases considered appear to be correctly decided, it is impossible to reconcile the language of the opinions. It is
(1) A municipality does not become liable by reason of any act of its officers or agents either for money, services, or goods where the municipality had no power originally to make itself liable by contract. Trester v. Sheboygan (1894),
(2) A municipality does not become liable for money, services, or goods upon principles of unjust enrichment where it is prohibited from contracting in any other than a specified way, as, for instance, with the lowest bidder. Caxton Co. v. School District (1904),
(3) Where the statute specifies the manner in which a municipality may enter into a contract, it does not become liable upon a contract entered into in some other way unless the informal contract be ratified with the formality required by statute to make a contract. Lee v. Racine (1885),
(4) Where the municipality has power to do an act or enter into an obligation and is not prohibited from creating a liability in any but a specified way, it may become liable upon principles of unjust enrichment for moneys had and received, for services rendered, and for goods furnished. Thomson v.
(5) Where a municipality has received money, goods, or services and has accepted the benefits thereof and it had power had it proceeded in the statutory way to acquire the money, goods, or services and it has paid therefor, an action to recover the money back into the public treasury will not lie where it is inequitable and unjust to require the repayment, but otherwise where such repayment would be equitable. Ellefson v. Smith, supra; Frederick v. Douglas County, supra (action to enjoin further payments and to recover back payments made). See Neacy v. Drew (1922),
(6) Where the statute provides that a contract can be made by a municipality only in the way specified, an action will lie to restrain payment pursuant to a contract not made in compliance with the statute, even though there has been part performance and acceptance by the municipality. Trester v. Sheboygan, supra; Wagner v. Milwaukee (1928),
(7) Under some circumstances, a municipality may become bound upon principles of equitable estoppel. Kneeland v. Gilman (1869),
(8) Where the statute forbids the making of a contract between a municipality and the other party, the contract is illegal, and on grounds of public policy there can be no re
The case of School District v. Industrial Comm. (1927)
The question was whether he was an employee of the district within the meaning of the Workmen’s Compensation Act. Sec. 102.07 (1) of that act, so far as material, declared :
“Every person in the service of the state, or . . . any . . . school district . . . under any appointment, or contract of hire, express or implied, oral or written, except any official of the state, or of any county, city, town, village, or school district therein,” is an employee thereof. Sec. 102.07 (1), Stats. 1925.
Sec. 40.24, Stats. 1925, provided: “. . . No act authorized to be done by the board shall be valid unless voted at its meeting. ...”
In accordance with the holding in Butler v. Joint School District (1914),
“Where a workman is induced to render services, as here, to a school district, which are necessary and valuable to the district, and which are accepted by the school board with full knowledge, then a contract is implied and an action in quantum meruit would lie.”
The real point of divergence was whether or not the statute permitted the making of a contract in any other way than that specified; that is, by a vote of the board. As was pointed out in the opinion of the court, this court had consistently held that without a vote there could be no contract because, by the terms of sec. 40.24, unless authorized by vote, it was not valid. The court had repeatedly held in case of private employers that the relationship of employer and employee did not require the making of a formal contract but arose where the service was performed in response to a request of the employer.
In the Restatement, Contracts, § 5, Comment a, it is said:
"... Implied contracts must be distinguished from quasi-contracts [unjust enrichment], which also have often been called implied contracts or contracts implied in law. Quasi-contracts, unlike true contracts, are not based on the apparent intention of the parties to undertake the performances in question, nor are they promises. They are obligations created by law for reasons of justice. Such obligations were ordinarily enforced at common law in the same form of action (.assumpsit) that was appropriate to true contracts, and some confusion with reference to the nature of quasi-contracts has been caused thereby.”
If the district had refused to pay Olson for his services, the liability of the district to compensate him upon principles of unjust enrichment would have depended upon whether or not the statute operated as a prohibition against the creation of a liability in any other than the specified way. Cases like Lee v. Racine (1885),
From the allegations of the complaint in this case it appears that no formal contract was entered into nor was the plaintiff’s compensation fixed by ordinance. However, it does appear that the service was rendered with the knowledge, approval, and acquiescence of the common council, and that the defendant city has accepted the benefit of plaintiff’s services ; that the city had power to make a contract in the first instance.
This case as well as any other perhaps illustrates the difference between applying principles of ratification and allowing recovery upon the theory of unjust enrichment. If the contract made by the mayor with the plaintiff had been in fact ratified, the defendant would be liable at the contract rate if the rate had been fixed. Upon principles of unjust enrich
It must be held that where there is no formal ratification there is no ratification at all. Ratification by acquiescence permits the city to become liable on a contractual basis in a manner other than that specified by statute. It may, however, upon the principle stated in Thomson v. Elton, supra, become liable upon principles of unjust enrichment.
By the Court. — The order appealed from is affirmed, and cause remanded for further proceedings according to law.
Notes
Brodhead v. Milwaukee (1865), 19 Wis. *624; Paul v. Kenosha (1867),
Dissenting Opinion
(dissenting). In my opinion the provisions in sec. 62.26 (5), Stats., that “The council shall by ordinance