199 P. 592 | Or. | 1921
This is an original special proceeding brought by the State of Oregon upon the relation of J. C. Bayer, trustee, against George B. Funk, as auditor of the City of Portland, to compel the defendant by force of a writ of mandamus to issue to the relator a city warrant for $36,702.84 pursuant to two ordinances of the city council authorizing the issuance of the warrant.
Acting upon the petition of the relator an alternative writ of mandamus was issued commanding the defendant to execute and deliver to the relator a warrant for $36,702.84 or to show cause for not doing so. The defendant responded to the writ by filing an answer containing denials, admissions and affirmative allegations. The relator demurred to the answer for the reason that the “answer does not state facts sufficient .to constitute a legal defense or answer to the alternative writ herein.” The only question necessary to be decided now is whether or not the answer .is sufficient to constitute a defense. It may be stated at the very outset that, because of the denials appearing in the answer, the demurrer must be overruled unless it can be said that the affirmative allegations made in the answer, notwithstanding the presence of the accompanying denials, admit facts sufficient to validate the ordinances.
Upon the completion of the building it was found, after balancing the accounts, that the structure had cost considerably more than the contract price. As we understand the record some of the companies, persons and firms who furnished labor and materials for the Public Auditorium have not yet been paid; and we infer, too, that Pederson is unable to pay the indebtedness and that Kelly and Schanen, two of the bondsmen, have turned over to the trustee, certain property for the benefit of the unpaid creditors.
On March 23, 1921, after the report of the second committee, the council passed an ordinance entitled:
“An ordinance providing for settling the claims connected with the contract of Hans Pederson for the construction of the Public Auditorium.”
This ordinance in effect states that it appears to the council that the claims of Hans Pederson and of J. 0. Bayer trustee, growing out of the contract for the erection of the Public Auditorium
provided, that a release, which had been signed and was then in escrow be delivered to the city upon the mating of payment. •
Pederson and Bayer, as trustee, had executed a release in which it is recited that—
“in consideration of the sum of $36,702.84 to be paid by the city * * concurrently with the delivery of this instrument for the compromise and settlement of any and all rights, claims and/or demands either legal, moral, equitable or otherwise, * * said Ha.ns Pederson and said J. C. Bayer trustee, do hereby acknowledge full and complete accord, satisfaction and discharge of any and all such rights, claims and/or demands. ’ ’
The release was placed in escrow with parties who were satisfactory to both Pederson and Bayer with instructions to surrender the- release to the city upon delivery of the warrant. A second ordinance was passed appropriating $36,702.84 out of the general fund for the purpose of paying the warrant authorized by the first ordinance.
Formal demand was made upon the defendant as city auditor to issue the warrant, but he refused and subsequently this proceeding was begun. The relator contends that the city ordinances providing for the issuance of the warrant and the appropriation of moneys for its payment are valid; and consequently he has caused to be set forth in the writ allegations of the facts upon which he relies to support his contention. The defendant insists that the ordinances are void, because, he says, the council exceeded the authority conferred upon’ it by the charter.
For a second time it is alleged in general terms in the writ that after having been awarded the contract for the construction of the Public Auditorium, Hans
The writ continues by particularizing the alleged arbitrary changes and modifications which the relator asserts produced a substantial abandonment of the original contract. The relator specifies three material changes. The first alleged change relates to brick. On May, 25, 1916, Pederson entered into a contract, with the approval of the city, for the purchase of what is known as Newberg brick. On October 4, 1916, Pederson was directed by the city to cancel his contract for the Newberg brick, for the reason that the makers of the Newberg brick had not furnished brick “matching those formerly on the job,” and the city was not able to get a proper guaranty from the makers that they would supply brick of the proper kind. On October 21, 1916, the city notified Pederson that it had authorized the use of what is known as Hebron brick, and, accordingly, Pederson ordered Hebron brick. The first delivery of Hebron brick was not made until November 28, 1916, and the relator alleges that by reason of the change of brick a delay of approximately sixty-five days during the months of October and November resulted and that because of this delay the work was thrown over into the winter months at which time the .weather was more inclement and the workmen were
The second alleged change relates to the stone used in the building. In substance the relator avers that he entered into a contract with the Hercules Sand Stone Company of Tenino, Washington, for the delivery of stone, quarry cut; and that at that time many men in Portland were out of employment and in order to relieve that condition the city directed Pederson to make a contract with Malone & Sandstrom, residents of Portland, for the furnishing and cutting of the stone. The relator says that because Malone & Sandstrom were financially irresponsible, Pederson was required to meet their pay-rolls at the very outset, thus injuring the financial standing and credit of - the contractor; and the relator further alleges that — ■
“by reason of this arbitrary imposition * # the building of the auditorium was delayed to a considerable extent, and the cost in the furnishing and cutting of said stone materially increased.”
The other alleged change relates to progress payments. The contract provided for monthly estimates of the progress made on the work during each month. The writ alleges that the contract required the city to pay ninety per cent of the monthly progress and permitted the city to withhold only ten per cent. The relator says that the city retained 18 per cent, with the result that Pederson was seriously handicapped. The city meets this contention by alleging that under the contract with Pederson it has a right to retain every dollar that was retained. The contract is not set out in the pleadings and consequently we cannot now" construe it.
The relator is allowed ten days within which to file a reply. Upon the filing of a reply a referee will be appointed to take and report the evidence.
Demurrer Overruled. ■
Demurrer overruled June 27, 1922.
On Demurrer to Answer to Amended Alternative Writ.
Overruled.
As heretofore stated in State ex rel. Bayer v. Funk, City Auditor, ante, p. 134 (199 Pac. 592), these proceedings were brought on the relation of J. 0. Bayer, trustee, against the defendant as auditor of the City of Portland, to compel defendant, as auditor, to issue to the relator a warrant for $36,702.84.
This controversy grows out of a contract for the construction of the Auditorium building in the City of Portland, entered into by the city with Hans Pederson on March 22, 1916. Pederson, after commencing the construction of the building, becoming involved, on May 3, 1917, joined with his creditors and the sureties upon his bond to the- city, in entering into a contract with J. C. Bayer, the relator, as trustee, wherein, with the consent of the city, it was agreed that the relator, as trustee for Pederson and for his bondsmen and creditors, should carry out Pederson’s contract with the city, and should receive and disburse all moneys to be paid by the city upon the Pederson contract.
In our former opinion we overruled a demurrer to the answer to the first alternative writ of mandamus, and allowed the defendant ten days in which to file a reply. Subsequent to the filing of the reply upon the petition of the relator, an amended alternative writ was issued. To this amended alternative writ the defendant answered, and to this answer the relator has demurred, upon the ground that the facts stated in the answer do not constitute any defense to the writ, or show any fact why the peremptory writ should not issue. The demurrer attempts to segregate the new
The facts alleged in the present writ are substantially the same as those alleged in the former writ. The brief filed on behalf of the relator states, “The only difference between the original writ and the amended writ is that the amended writ alleges the claims more particularly than the former writ, and that it has omitted the allegations of the dereliction of the city and substituted therefor that the contractor and the relator claimed those facts to be true, and that that claim was settled by a compromise.”
Upon the former appeal, the relator’s brief stated his contention at that time to be as follows: “As we view it, there is only one question involved in this controversy, and that is, whether- or not, under charter powers of the City of Portland, the council has the authority to pay moral obligations existing against the city.”
The present writ in substance alleges that relator had an unliquidated, disputed claim against the City of Portland for an amount in excess of $36,702.84, which the city was under a legal obligation to pay; that the city offered to pay' said sum as a compromise of said claim upon condition that the relator should execute a release, discharging the city from all obligations, legal, moral or equitable, in favor of the relator and Pederson, and should place the same in the hands of a third party, to be delivered to the city when a warrant for said sum in favor of the relator was issued in payment thereof; that the city accepted said offer and performed on its part by the passage of two ordinances, one of which authorized the payment of said sum to the relator, and the other appro
Because the answer admits that the two ordinances were passed and a release was executed and delivered to an escrow-holder, the relator contends that the transaction in effect created a legal obligation upon the city to pay to the relator the sum of $36,702.84. In support of this contention relator’s present brief says, (1) “That it was the payment of a part of an unliquidated, disputed claim and a receipt or release in full of the balance”; (2) “that it was a compromise, accord and satisfaction”; and that (3) “the ordinances and the release constitute a contract, and this contract recites that it was a compromise, accord and satisfaction, and the contract being admitted in its very terms, the defendant cannot. say that the transaction was otherwise than as recited.”
The contention that the transaction amounted to the payment of an unliquidated and disputed claim and a release or receipt in full for the balance cannot be sustained, because it appears very clearly from the allegations, both of the writ and of the answer, that the payment has not been made, nor has the release above referred to been delivered to or accepted by the city. It is alleged in the writ, and denied by the answer, that the relator had an unliquidated or disputed legal claim, or any bona fide claim against the •city, or that he- ever honestly believed that any sum of money was justly due or owing to him from the city. Thus the very question of whether or not the relator had, or in good faith believed that he had, such a claim as could, by the settlement thereof, constitute
From the allegations of the answer, which, for the purposes of the demurrer are admitted to be true, it appears that the city has completely performed its contract, and that it has paid to Pederson and to the relator all and more than it contracted to pay; that a final receipt has been given therefor; that a full and complete adjustment and settlement has been had with Pederson and with the relator, and that Pederson and the relator have executed and delivered to the city a full and complete release, discharging the city from all claims and demands arising from or connected with Pederson’s contract. It also appears from the allegations of the answer that the relator and Pederson, as well as Pederson’s bondsmen and creditors, claimed to the city council that Pederson had lost large sums of money in fulfilling his contract, and urged the city to reimburse him in full or in part for the losses he had so sustained; that the city council were of the opinion that the city was under a moral, but not under any legal, obligation to pay a part of such losses; that the city council offered to pay to the relator the sum of $36,702.84 as a moral, but not as a legal, obligation on condition that the relator should commence legal proceedings to obtain, and should obtain, a judicial determination that the city council had authority to pay said sum of money to the relator as a moral obligation, and not as one which was enforceable in an action at law.
It also appears from the new matter alleged in the answer that when the ordinances were passed and the release was executed and delivered in escrow, it was stipulated between the relator and the city council
By the terms of the stipulation, under which the council passed the two ordinances, and the relator and Pederson executed their joint release and placed the same in escrow, this transaction did not amount to an accord and satisfaction, nor did it result in any binding contract between the parties.
“An accord is an agreement between two parties to give and accept something in satisfaction of a right of action which one has against the other, which when performed is a bar to all actions upon this account” (Bouvier’s Law Diet., p. 62); while “An accord and satisfaction is a method of discharging a contract, or settling a cause of action arising either from a contract or a tort, by substituting for such contract or
‘£ Generally, but not universally, if the new promise be founded upon a new consideration, and is clearly binding on the original' promisor, this is a satisfaction
From the allegations of the answer, as well as from the writ itself, it clearly appears that the transactions which took place between the relator and the city council did not amount to an accord and satisfaction, and if the conditional promise of the city could be held to constitute an accord, under the authorities- it was revocable by the city at any time before it was executed.
The condition upon which the promise was based has not yet been fulfilled, and until the event upon
The answer also alleges that’ Section 148 of the charter of the City of Portland provides that: “The City of Portland shall not. be bound by any contract nor in any way liable thereon unless the same is authorized by an ordinance and made in writing and signed by some person or persons duly authorized thereunto by the Council. But an ordinance may authorize any board, body, officer or agent to bind the city without a contract in writing for the payment of any sum not exceeding two hundred fifty dollars ($250).”
By these provisions, it is the duty of the auditor, before paying any demand against the city, to satisfy himself that the money is legally due and that its payment is authorized by law. Until satisfied that the demand is legally due and is authorized by law,
We think that the principle that was applied to the facts in that case ought to be applied to those in this, so far as the duty of the mayor in that case and that of the auditor in this is concerned, and that the principle there announced should be controlling here. When all of the provisions of the charter have been complied with, the drawing of a warrant by the auditor in payment of a legal, enforceable claim is a mere ministerial act, but in a case like this, if the facts are as alleged in the answer, for the auditor to draw a warrant, whether the council pretended to authorize him to do so or not, would be a gross dereliction of duty upon his part.
In a somewhat earlier case, Mr. Chief Justice Lord said, in City of Corvallis v. Carlile, 10 Or. 139, 141, (45 Am. Rep. 134): “In construing the powers given to a municipal corporation by its charter, regard being had for the ends to be accomplished, the courts have inclined to adopt a strict rather than a liberal construction of- such powers, thus applying substantially the same rule that is applied to charters of private incorporations. * * They can exercise no powers but such as are expressly conferred upon them by the act by which they are incorporated, or are necessary to carry into effect the powers thus conferred, or are essential to the manifest objects and purposes of the corporation. * * Any ambiguity or doubt arising out of the terms used by the legislature, must be resolved in favor of the public.” To the same effect see Naylor v. McColloch, supra; McDonald v. Lane, supra; Robertson v. Portland, 77 Or. 121, 128 (149 Pac. 545) ; Chapman v. Hood River, 100 Or. 43, 51 (196 Pac. 467).
If the allegations of the answer are true, the relator is not entitled to relief by mandamus, or otherwise. The city was under no obligation to the relator either legal, moral or equitable. The council had no legal authority to pay or to promise to pay him any sum of money. He had been settled with once and paid in full, and had given his receipt therefor. He had in addition thereto executed a formal release forever discharging the city from all further liability. The release he now tenders could have no greater efficacy than the one he formerly gave, and if the council could lawfully pay him the sum of money he now demands, no reason could exist which would prevent a
The council has no such authority. The answer states sufficient facts to constitute a good and complete defense to the writ. The demurrer is overruled, with leave to reply if the relator so desires.
Demurrer Overruled. Suit Dismissed.