Case ID: ohio-st_54/html/0439-01.html
Source: Caselaw Access Project
Author: {"author": "Bradbury, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

McCloud and Geigle v. The City of Columbus.
    
      Municipal corporations — Improvement of public streets — Mode and time of advertising for bids — Section 2303 Revised Statutes.
    
    Where a municipal corporation, acting under chapter 4, division 7, of Title XII, Revised Statutes, improves a public street, the provisions of section 2303, prescribing the mode and time of advertising for bids, are mandatory, the compliance with which is a condition precedent to the power of the municipality to enter into a valid agreement in respect thereof.
    (Decided April 28, 1896.)
    Error to the Circuit Court of Franklin county.
    The plaintiffs in error brought in the court of common pleas of Franklin county, an action against defendant in error to recover on a contract for grading and paving Livingston avenue, a street of said city. The plaintiffs prevailed in the court of common pleas and the circuit, court reversed the judgment. Whereupon the cause was brought to this court by the plaintiffs in error, to reverse the judgment of the latter court.
    
      Paul Jones, for plaintiffs in error.
    1. The plaintiffs maintain that since there was an advertisement, although defective, the city was not acting ultra vires, but only in an irregular manner.
    2. The city is not permitted to take advantage of its own irregularity to defeat a contract entered into in good faith, after the contractor has performed his part of the contract without knowledge of the irregularity.
    3. The city, by passing an ordinance levying the amount to be paid the contractors, on the property abutting on the improvement and ordering the assessment payers “to pay the amounts óf money by them severally due” to the plaintiffs, ratified the contract and is estopped from setting up, as a defense against the contractors, this defect.
    4. The city was a warrantor of the validity of the assessment assigned by it to the contractors.
    5. The contract is indivisible. The contractors are entitled to the whole amount due thereon, or nothing. Becher v. McCloud et al., 4 C. C., 305.
    There is no statute of frauds in Ohio declaring a contract, made between a contractor and a municipal corporation on a defective advertisement, absolutely void, or that no action can be maintained thereon. If this contract is a nullity, the court must so pronounce it on some general principle of law. Wilder v. Commissioners, 41 Ohio St., 601 ; Commissioners v. Railroad Co., 37 Ohio St., 208; State ex rel. Garrett et col. v. Van Horn, 7 O. S. 327, 332; State v. Ex. of Buttles, 3 O. S., 309, especially paragraph 6, of the syllabus on page 309; State ex rel. Smead v. The Trustees of Union Township, 8 O. S., 394, 400, 402; Goshen Township v. Shoemaker et al., 12 O. S., 624, 627, 628.
    Tt takes a greater degree of irregularity to render a contract for a street improvement between a city and a contractor illegal, than to render an assessment, levied by the city to pay for such improvement, illegal. Moore v. Mayer, 73 N. Y., 238; Cincinnati v The Anchor White Lead Co., 44 Ohio St., 224; Wewell v. Cincinnati, 45 Ohio St., 407, arising out of the same assessment; Kirchner et al. v. Cincinnati, 14 W. L. B., 48; Hastings v. City of Columbus, 42 Ohio St., 585.
    
      Again, if the property owners, when there is a defective advertisement, petition to have the contract let to a particular bidder, or have a particular kind of improvement made, they are estopped from setting .up an irregularity in the advertisement. Tone v. Columbus, 39 Ohio St., 281; Moore v. Mayor, 73 N. Y., 238.
    If the failure to publish the ordinance does not invalidate a contract for a public improvement, the failure to publish the advertisement the full statutory time certainly ought not to invalidate the contract. A partial failure to observe the law is not as great an error as a total failure. 2 Dillon Mun., Corp. 936; Stuhr v. Hoboken, 43 N. J. L., 147.
    When property is taken in invitum and the statute requires a notice to be given the full measure of time required by law is usually exacted. This is not always the case. Sometimes the law permits a slight departure from the requirements of the statute. German Bank v. Stumpf, 73 Mo., 312. But the general rule is that nothing less than the full time will suffice where a man’s property is taken for a tax, assessment, or in a judicial proceeding. But, in this case, the proceedings were not in invitum. The city was soliciting the contractors to treat with it and the rule applicable in the case of taking property against the owner’s will does not apply.
    There is a broad distinction between cases where there was a defective advertisement and where there was no advertisement. In this case no objection is made to the form of notice; bids were received upon it; the plaintiffs were the lowest bidders. It gave to the public all the necessary information. The city solicitor or a tax-payer might have enjoined the city from letting a contract under such an advertisement. R. S., 1777 and 1778. This defect would have been a good defense in an action in mandamus to compel the city to award the contract to the lowest bidder. Mercer County v. Hackett, 1 Wall., 93; Mercer County v. Railroad, 27 Pa. St., 389; County of Warren v. Marcey, 97 U. S., 96, 2d paragraph of syllabus.
    Such a contract is the same as if it were a judgment rendered on a defective service. A judgment is a contract. Leake Con. 125, 155; Williams v. Jones, 13 M. & W., 628; Andrews v. Montgomery, 19 Johns., 162; India Rubber Factory v. Hoit, 14 Vt., 92.
    Where a judgment is rendered by a court against a defendant before the statutory time has elapsed, for him to appear and plead, or where there is any kind of service, however irregular, such a judgment is valid and binding except as against a motion to set aside filed in the court rendering it, or on error prosecuted to a superior court.
    
      Muncey v. Joest, Treas., 74 Ind., 409, opinion by Elliott, J., 412; Isaacs v. Price, 2 Dillon, C. C. R., 347; Ballinger v. Tarbell, 16 Ia., 491; Boket et al. v. Chapline et al., 12 Ia., 204; Bromley et al. v. Smith, 2 Hill, 517; Thompson v. Tohnie, 2 Peters, 157; Williamson v. Nicklin et al., 34 O. S., 123; Carper v. Richards, 13 O. S., 220, paragraph 4; Harrington v. Mofford, 46 Miss., 31; Bank of U. S. v. Danbridge, 12 Wheat. 64; Commissioners v. Aspenwall, 21 How., 539; Zabraskie v. C. C. C. R. R. Co., 23 How., 381; Bissell et al. v. City of Jeffersonville. 24 How., 288; Supervisors v. Schenck, 5 Wall., 772; Mayor v. Lord, 9 Wall., 414; Merchants Bank v. State Bank, 10 Wall., 604; Borgate et al. v. Short-
      ridge, 5 H. I. Cas., 298; East Anglian Railway Co. v. The Eastern Counties Railway Co., 5 Am. Law, Review, 772; Pollock on Contracts, 94; Miner’s Ditch Co. v, Zellerbach, 37 Cal., 543; De Voss v. Richmond, 18 Gratt., 338.
    Time and again corporations have been held estopped to plead ultra vires to an action on a contract performed by the other parties where the corporation has received the benefit, although clearly beyond its powers. 2 Beach on Private Corporations, sec. 425; Darst v. Gale et al., 83 Ill., 136; Railway Co. v. McCarty, 96 U. S., 258; Hitchcock v. Galveston, 96 U. S., 341; Thompson v. Lambert, 44 Iowa, 239.
    The city passed an ordinance ordering the assessment payers to pay, and authorizing the contractors to receive the cost of the improvement. The city is now estopped, and should not be heard to say that the contract was ultra vires.
    
    Where a city agrees to pay a contractor in assessments it impliedly warrants their validity. The city is liable for any balance which the contractors, for any reason, cannot collect, unless they have expressly agreed to take assessments as full payment.
    
      Cincinnati v. Diekmeier, 31 O. S., 242, 244; Bill v. Denver, 29 Fed. Rep., 344; Sleeper v. Bullion and Dustin et al., 6 Kan., 300; Bucroft v. Council Bluffs, 63 Ia.,646; Scofield v. Council Bluffs, 68 Ia., 695 ; Maher v. Chicago, 38, Ill., 266; Chicago v. The People, ex rel. 56 Ill., 326; Louisville v. Hyatt, 5 B., Mon. 501; Tourmier v. Municipality, No 1, 5 La., 298; Cronan v. Municipality, No. 1, 5 La., 537; Memphis v. Brown, 20 Wall., 289.
    
      
      Gilbert IL Barger, Florizel Smith and Fllsioorth G. Irvine, for defendant in error.
    The first and simple question to he determined is this: Is the contract sued upon an illegal contract because the agents of the city of Columbus did not advertise for bids, for the improvements therein provided for for the period of four weeks in two newspapers published in the corporation?
    We maintain the following propositions :
    1. The contract in question is an illegal contract because the mode and manner prescribed by law were not followed in its execution.
    2. As an illegal contract it cannot be sued upon.
    3. As an illegal contract it could not after-wards be ratified by any act of the. municipality.
    4. The equity of the case is not with the plaintiff in error.
    A municipal corporation has such powers and such only as are expressly granted by statute, and such as may be implied as essential to carry into effect those that are expressly granted ; and, relative to its power to enter into a contract, when the mode of contracting is specially and plainly prescribed and limited by express legislation that mode is exclusive and must be pursued, or the contract will not bind the corporation.
    Beach on Private Corporations, sec. 216.
    Nothing is more certain under the modern adjudications, than that the methods prescribed by charter or other statute must be observed by the corporation in entering into contracts if these statutory provisions are mandatory and intended by the legislature to act as wise restrictions upon the power of the corporations to contract. If, then, there are mandatory and restrictive enactro.en.ts requiring’ the corporation to contract only under certain formalities and conditions, then contracts made by the officers or ag-ents of the corporation which are not executed according to these statutory requirements do not bind the municipality.
    Beach on Public Corporations, sec. 252.
    
      Bank of U. S. v. Danbridge, 12 Wheat., 64; Smith v. Newburg, 76 N. Y., 136; Brady v. Mayor, etc., 20 N. Y., 312; Allen v. Galveston, 51 Tex., 302; Bryan v. Page, 51 Tex., 532; McBrian v. Grand Rapids, 56 Mich., 95; Argenti v. San Francisco, 16 Cal., 255; Los Angeles Gas Co. v. Toberman, 61 Cal., 199.
    
      Durango v. Pennington,8 Col., 257; People v. Webber, 89 Ill., 347; Worthington v. Covington, 82 Ky., 265; Addis v. Pittsburg, 85 Pa. St., 379; Keeney v. Jersey City, 47 N. J. Law, 449; State v. Passaic, 41 N. J. Law, 90; Siebrecht v. New Orleans, 12 La., Ann., 496; Baltimore v. Eschback, 18 Md., 276; Taft v. Pittsford, 28 Vt., 286; Fulton v. Lincoln, 9 Neb., 358; Hudson v. Marietta, 64 Ga., 286; Logansport v. Humphrey, 84 Ind., 467; Gates v. Hancock, 45 N. H., 528; Heidelberg v. San Francisco Co., 100 Mo., 69; Niles Water Works v. Niles, 39 Mich., 311; Wilhelm v. Cedar Co., 50 Ia., 254; Driftwood (etc.), Co. v. Connors, 72 Ind., 226.
    A person dealing with the agents of a municipal corporation has no right to presume that they are acting within the line of their duty, but must be careful to see that they are acting within the provision of the law which confers authority upon them.
    
      Smith v. The City of Newburgh, 77 N. Y., 136. Citing: Peterson v. The Mayor, 17 N. Y., 449; Cowen v. West Troy, 43 Barb., 48; Brown v. The 
      
      Mayor, 63 N. Y., 239, 244; Hodges v. Buffalo, 2 Den., 110; McDonald v. The Mayor, 68 N. Y., 23, 27; Dillon on Mun. Corp., 463; Brady v. City of New York, 20 N. Y., 312; McDonald v. The Mayor, 68 Id., 23; Parr v. Village of Greenbush; 72 N. Y., 463, 472; Worthington v. The City of Covington, Ky., 265; Addis v. Pittsburgh, 85 Pa. St., 379; Major & C. C. of Baltimore v. Eschbach, 18 Md., 276; North Stafford, etc. v. Ward, L. R., 3 Exch., 177; Heidelberg v. St. Francois Co., 100 Mo., 69; Beaver et al. v. Trustees, 19 Ohio St., 108; Boren et al. v. Commissioners, 21 Ohio St., 311; Farman v. Commissioners, 21 Ohio St., 311; State ex rel. v. Commissioners, 36 Ohio St., 326; State v. Commissioners, 39 Ohio St., 188; Ross v. Board of Education, 42 Ohio St., 374; Ohio ex rel. v. Yeatman, 22 Ohio St., 553; American Clock Co. v. Commissioners, 31 Ohio St., 415.
    In this last case the contractor, Mills, was' not permitted to recover even by way of damages the money and property he actually invested and furnished under his illegal contract, while in the case at bar, McCloud and Geigle have received in full all costs and expenses to which they went, in the performance of their illegal contract and are here asking for more.
    
    Where a municipal contract is illegal because it is made in violation of a statute that was passed in obedience to the constitutional mandate that the general assembly shall restrict the power of municipal corporations to contract so as to prevent the abuse of such power, an alleged breach of such illegal contract affords no basis of an action at law. Roll v. Raguet, 4 Ohio, 400; Raguet v. Roll, 7 Ohio, 77; Thomas v. Cronise, 16 Ohio, 54; Hooker v. Palos, 28 Ohio St., 261; McQuade v. Rosecrans, 36 Ohio St., 442; Williams v. Englebrecht, 37 Ohio St., 383; Kahn v. Walton et al., 46 Ohio St., 195; Jacobs v. Mitchell et al., 46 Ohio St., 609; Dillon on Munci. Corp., Sec., 447; Dillon on Munci. Corp., Sec. 458; Oliver v. Gilmore, 52 F., 562; Kountze v. Flannagan, 19 N. Y., 33; Dil. on Munci. Corp., Sec. 466; Dickinson v. Poughkeepsie, 75 N. Y., 65; Mitchell v. Milwaukee, 18 Wis., 92; Emery et al. v. The Ohio Candle Co., 47 Ohio St., 320.
    Where the form and manner of making a municipal contract are prescribed by legislative enactment for the manifest purpose of restricting the power of the municipality in order to avoid the dangers that would flow from an unrestricted excise of such power, and in violation of such statute the ag’ents of the corporation attempt to enter into an agreement that purports to bind the city, neither the agents of the corporation nor the municipality itself can by any subsequent transaction ratify such illegal contract. Dillon on Munci. Corp., Sec. 449; Bryan v. Page, 51 Texas, 532; Pomeroy on Equity Jur., Sec. 964; Corry v. Freeholders of Somerset, 44 N. J. L., 455; Keeney v. Jersey City, 47 N. J. L., 453.
    No subsequent act can make the illegal contract effective. Sault Ste. Marie v. Van Dusen, 40 Mich., 429.
    Contracts contra bonos mores, forbidden by positive law, or opposed to public policy, are void, and can neither be ratified nor enforced. State v. Exec'r. of Buttles, 3 Ohio St., 310; Peterson v. The Mayor, 17 N. Y., 454; Gates v. Hancock, 45 N. H., 528; Marsh v. Fulton Co., 10 Wall., 684; Reilly v. Philadelphia, 60 Pa. St., 467; Zottman v. San Francisco, 20 Cal., 96; Swift v. Williamsburg, 24 Barb., 427; Murphy v. City of Louisville, 9 Buch., 189; Hague v. City of Philadelphia, 48 Pa. St., 529.
    Where a contractor has been paid in full for all labor, materials, and other things furnished by him upon a street improvement under a contract that is illegal because made by the agents of the municipal corporation in violation of the statute that in obedience to^ the constitutional mandate defines and restricts the power of the municipality to enter into contracts for such work, a court of equity will not, after such restoration to his former position and condition, aid such contractor to get from the treasury of such city money that he never owned and whose value he never parted with or lost. Dillion on Munci. Corp., sec. 459.
   Bradbury, J.

The circuit court held the contract, by virtue of which plaintiffs sought to recover, tobe void, for the sole reason that the proposition for bids, for making the improvement was not advertised as prescribed by section 2303, Revised Statutes.

The scheme of improvement contemplated an assessment against the property abutting thereon to pay the expense of making it. The record discloses the adoption, of the preliminary resolution declaring a necessity for the improvement and specifying its nature, or character, and the subsequent enactment of an ordinance providing therefor ; that a notice calling for bids to make the im- • provements was published; that the plaintiffs in error were the lowest responsible bidders therefor; that the plaintiffs in error and the city of Columbus entered into a contract, based upon the bid of 'the former, by the terms of which they were to perform all the labor and. furnish all the material necessary to complete the improvement, and to receive therefor $8,563.36. That they had fully performed the contract on ■ their part. The terms of the contract were such that the city was not to be liable thereon to the plaintiffs in error until after the latter had exhausted their remedies against the owners of the property that abutted upon the improvements, and then only for the balance that remain uncollected. After the improvements had been substantially completed and the proportion of the entire cost that should be assessed against each parcel of abutting property, ascertained, a large number, if not all, of the abutting proprietors brought an action against the citv of Columbus and the plaintiffs in error to enjoin the city from placing the assessments upon their respective lots. This action was taken to the circuit court on appeal. The trial in the circuit court resulted in a finding that the assessments were irregular; the court proceeding under section 2289, Revised Statutes, then ascertained the actual cost of the labor and material that went into the improvement apportioned the same among the abutting owners, and charged the share of each owner upon his lot.

The contractors, plaintiffs in error, were thus reimbursed for whatever they had expended in and about the improvement. The difference between this expenditure and the contract price, representing the profits of the transaction, was about two thousand and three hundred dollars, and the object of the present action is to recover that sum from the city.

The improvement in question was local; it was inaugurated and carried onward to completion upon the supposition that the benefit to result from, it to abutting property was at least equal to the sum it would cost, and that sum was to be apportioned among the owners of that property and made a charge thereon. This was the primary source from which payment was to be drawn. The city was not to be called upon for payment of any part thus to be charged upon abutting property- until after this primary source had been exhausted, and then only for so much thereof as could not be recovered from that source. Under thése conditions the city of Columbus was under no higher obligation than that of the guarantor.

The owners of the abutting property were relieved of any obligation to pay the contractors, plaintiffs in error, any sums excepting the actual cost of the improvement, because of the omission of the city council to cause the notice to bidders to be advertised according to the requirements of section 2303, Revised Statutes. That section requires -such notice to be published for four weeks in two newspapers published and of general circulation in the city, where the estimated cost of the improvement exceeds five thousand dollars. The estimated cost of the improvements in this cause exceeded that sum. A notice calling for bids was published, but the mode or length of time does not definitely appear, the record merely showing that it was for less than the statutory period. The duty of publication belongs to the city council. In omitting to ;make it in the manner prescribed by the statute the city council violated that duty. Who is to suffer for this default? Ordinarily a principal is answerable for a default of his agent in the line of the agent’s duty. If, however, that general principle should be invoked as the sole arbiter of the question, much difficulty might arise in its application. Doubtless the council of a municipal corporation is generally its agent, but that the legislature might impose duties upon that body other than those pertaining to the entire municipality is conceivable. Municipal corporations are agencies of the state in the administration of its governmental affairs, and might be authorized to charge the state itself with pecuniary obligations. That it may impose obligations upon distinct portion of its inhabitants, in connection with local improvement, is shown by its frequently acting in such matters, as expressly authorized by statute. Ih such cases, no principle is ■apparent which makes that body, while acting in the local affair, the agent of the whole body of the people, instead of that portion upon whose immediate affairs the council is acting, so as to cast upon the entire body of taxpayers the burden of mistakes made in transacting the concerns of a part only. It would seem that such consequences should result, and the whole body of the inhabitants charged with liability under such circumstances, only by virtue of some oositive provisions of law.

In the present case the city of Columbus entered into a contract to pay for any balance not collectable from the abutting proprietors, and thereafter if the contract was valid it was bound to perform what the statutes required it to do to charge those abutting proprietors, and therefor if by reason of an omission of anything it was subsequently required to do, those abutting proprietors, who, as we have seen, were primarily liable, were discharged, the city should make good the loss. The question, however, is, was the contract in this ease valid? The duty which the council omitted was one which preceded the making of the contract, and was preliminary thereto. The notice which it omitted to publish in the prescribed manner and for the prescribed time was provided by the legislature as a safeguard to the taxpayer, whether local or general, against private rapacity and official indifference. This beneficial provision has no value if it can be disregarded by a city council, and yet a contract entered into binding upon the city and consequently imposing a burden upon the whole body of its taxpayers. The evils that imperatively demand these restrictive statutes are of common notoriety. They can be held in check only by regarding as mandatory statutory provisions designed to circumvent them.

There are no equitable considerations that require the whole body of the taxpayers of the city to contribute to a fund to pay the plaintiffs in error. The latter, as we have seen, have been reimbursed for their expenditures made' in behalf of the improvements. They are now seeking the profits of the transaction, which, if paid by the city must be from funds raised chiefly by those who were not appreciably benefited by the work done and materials furnished. The plaintiffs in error, therefore, must recover, if at all, not upon-any equitable g’rounds, but upon a strict legal right. We think there is no hardship in requiring them, and all other parties who undertake to deal with a municipal body in respect of public improvements, to investigate the subject and ascertain at their peril whether the preliminary steps leading up to contract and prescribed by statute have been taken. No high degree of vigilance is required of persons thus situated to learn the facts. They are dealing with public agencies whose powers are defined by law, and whose acts are public transactions, and they should be charged with knowledge of both. If the preliminary steps necessary to legal-' ize a contract, have not been taken, they can withdraw from the transaction altogether, or delay until the steps are taken. The citizen and taxpayer, in most instances, unless directly affected by the improvement has but a remote, contingent and inappreciable pecuniary interest in the matter and should not be required to personally interest himself about its details. If he should do so and ascertain fatal irregularities, his remedy must be by a civil action which is attended always by annoyance and expense and frequently by uncertainty.

The judiciary should construe these restrictive statutory provisions designed by the legislature to protect the public treasury from unconscionable private greed so as to effect the object intended. To accomplish the end designed by the statute, the publication of the notice prescribed by section 2303 should be held a condition precedent to the power of the city to enter into the contract providing for the improvement.

This question, and others analogous to it, have been discussed so frequently by judges and authors that it is impracticable to give more than a partial citation of the volumes in which they have been treated.

An, occasional hardship may accrue to one who negligently fails to ascertain the authority vested in public agencies with whom he deals. In such instances, the loss should be ascribed to its true cause, the want of vigilance on the part of the sufferer, and statutes designed to protect the public should not be annulled for his benefit. Seibrecht v. New Orleans, 12 La. Ann., 496; Baltimore v. Esch bach, 18 Md., 276; Taft v. Pittsford, 28 Vt., 286; Fulton v. Lincoln, 9 Neb., 358; Hudson v. Marietta, 64 Ga., 286; Logansport v. Humphrey, 84 Ind., 467; Gates v. Hancock, 45 N. H., 528; Heidelberg v. San Francois Co., 100 Mo., 69; Niles Water Works v. Niles, 59 Mich., 311; Wilhelm v. Cedar Co., 50 Ia., 254; Driftwood (etc.) Co. v. Commissioners, 72 Ind., 226; Beach on Public Corporations, section 252; Bank of U. S. v. Dandridge, 12 Wheat., 130; Smith v. Newburg, 77 N. Y., 130; Brady v. Mayor, etc., 20 N. Y., 312; Allen v. Galveston, 51 Tex. 302; Bryan v. Page, 51 Tex., 532; McBrian v. Grand Rapids, 56 Mich., 95; Argenti v. San Francisco, 16 Cal., 255; Los Angeles Gas Co. v. Toberman, 61 Cal., 199; Durango v. Pennington, 8 Col., 257; People v. Weber, 89 Ill., 347; Worthington, v. Covington, 82 Ky., 265; Addis v. Pittsburgh, 85 Pa. St., 379; Keeney v. Jersey City, 47 N. J. Law., 449; State v. Passaic, 41 N. J. L, 90.

Judgment affw^mecl.