Case ID: ohio-st_28/html/0116-01.html
Source: Caselaw Access Project
Author: {"author": "Johnson, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Samuel S. Hubbard et al. v. Jesse S. Norton et al.
    1. Tinder the provisions of section 105 of an act to provide for the organization of cities and incorporated villages, passed May 3, 1852, (2 S. & 0., 1626,) the city council of a city of the first class, having a board of improvements, may order the improvement of a street, without a report of such board “that an assessment will be required and the proper amount to be.assessed.” Such report is not a condition precedent to the making of such order.
    2. A contract by a municipal corporation, for the improvement of a street, made according to the laws in force prior to the adoption of the Municipal Codo, and which was a valid and subsisting obligation when the Code took effect, continued such under the Code. The rights and liabilities .of the parties are saved by Sec. 725 of tho Code, although no part of such contract could have been performed before the Code took effect.
    3. Where, in a contract for the improvement of a street, it is stipulated, among other things, that the work shall be commenced by a given date, and, in the event of failure, the city reserves the right either to forfeit the contract, or to hire others to complete it and charge the cost to the contractors, and the contract is in part performed, the corporation, in the event of such failure, is vested with a discretion, and may waive such default and exact a completo performance.
    4. Time of performance is not of the essence of a contract unless made so by its terms, or by the act of the parties; and if after the time named in .the contract for the improvement of a street, tho contractor is allowed to go on, and expend his time and money, under the supervision of the city authorities, in the completion of the work, which is accepted and paid for as a full performance of the contract, this action of the corporation constitutes a waiver of such default.
    5. Where there is such waiver; or where the failure to perform is occasioned by the default of the other party, the contractor being in no default, it is not necessary to the continuance of such contract beyond the stipulated time for its completion, that an ordinance or resolution for that purpose be adopted by a majority of all tbe members elected to tbe council.
    6. Where it appears that after the contractors have entered on the performance, the defendants and others assessed, claiming to have knowledge of the facts, gave notice to the Council that the contract was obtained by a fraudulent combination among contractors, whereby the plaintiffs obtained a higher price than was just, and that for that reason they would . resist payment of the assessment; and neither the corporation nor these parties took any steps to stop the work; and the corporate authorities, acting in good faith, elect to exact a complete performance, notwithstanding such charge, and when so performed in conformity to the contract, to accept the work as a full compliance with the contract, and transfers the assessment in payment therefor. Held: That, in an action by the contractors on the assessment, such contract can not be treated as void, nor said plaintiffs barred of a recovery of any amount. Such charge, if true, under the circumstances, only operates to reduce the amount of recovery, to the extent of the actual injury sustained by reason of such fraudulent combination.
    Error to the District Court of Lucas county.
    This was an action commenced by Jesse S. Norton & William Casey, defendants in error, against Samuel S. Hubbard and William H. Dyer, plaintiffs in error, in tbe Court of Common Pleas of Lucas county, October 15, a. d. 1870, to recover of said Hubbard and Dyer the amount of an assessment for the grading and paving of Monroe street, in tbe city of Toledo, based on a contract with said city of date June 28, 1869.
    Tbe ease was beard at tbe November term, a. d. 1871, of tbe common pleas, and judgment rendered for tbe defendants in error. Tbe plaintiffs in error appealed. At the April term, a. d. 1872, of tbe District Court of Lucas county, tbe case was again heard and judgment again rendered for said defendants in error.
    The plaintiffs, in error moved tbe court to set aside the judgment of said .court in favor of defendants in error, and for a new trial. The motion was overruled, and the'plaintiffs in error excepted. A bill of exceptions embodying all the testimony, was taken and filed, and ordered to be made a part of the record.
    
      The plaintiffs in error come into this court by petition in error to reverse the judgment of the district court.
    Upon the report and recommendation of the board of improvements, an ordinance was passed to provide for such improvement, the cost to be assessed on the owners of abutting property.
    On the 28th of J une, 1869, the contract was let to Brophy & Casey, who agreed to have the work done by December 1,1869, and to accept such assessment in payment without recourse on the city.
    The work was completed and accepted by the city, and a valid assessment delivered in payment. During the progress of the work Brophy sold his interest in the contract to the defendant, Norton.
    The prayer was to recover the amounts assessed, with penalties, and for a sale of the lots upon default of payment.
    The answer by plaintiffs in error averred, among other things, substantially as follows: That said contract and assignment mentioned in said petition is illegal and void. That the same was obtained from the city of Toledo by a fraudulent and unlawful combination and conspiracy between said Brophy & Casey and the other principal grading and paving contractors in the city of Toledo, to prevent bidding and competition at the letting of said work; by which said defendants (plaintiffs in error) have been assessed an exorbitant amount, more than would have been had it not been for said combination and conspiracy.
    That on the 29th June, 1869, said city of Toledo had under advertisement for letting, with said Monroe street improvement, some twenty other large and expensive improvements. That said improvements would necessarily involve a large outlay for material and the necessary implements for prosecuting the same, and would give employment to a large number of men and teams for the seasons of 1869 and 1870.
    That proposals for doing such work were advertised for by the city, and the lowest bidder was awarded the contract.
    That on or about the 20th June, 1869, Brophy & Casey did secretly, fraudulently, and unlawfully, and with the intent to extort an exorbitant price from these plaintiffs in error, and other persons liable to be taxed for said improvements, enter into an agreement in writing with other parties, commonly known as contractors, not to compete with each other for certain work, but that the same should be parceled out, let who would be the successful bidder, equitably and fairly among the parties to said agreement.
    That, in pursuance of this fraudulent agreement, there was in fact no competition at the letting of said contract with Brophy & Casey for said Monroe street improvement, other than such bids as the parties knew would not be accepted, leaving the plaintiffs’ assignors the lowest bidders.
    That said defendants have been charged more than a fair compensation for the work done.
    That, in pursuance of said fraud and conspiracy, said Monroe street improvement fell to Brophy & Casey, assignors of Norton & Casey.
    That at the time of making said contract with the city of Toledo said Jesse S. Norton was a member of the said city council, and voted in the affirmative in the confirmation of said contract to said Brophy & Casey. That at the expiration of his term of office he at once became interested in said contract as assignee of said Brophy, and has been interested in the prosecution of said improvements,
    Said answer still further avers that on the 1st day of July, 1869, the municipal code went into operation in said city, by which the mode of assessment for improvements of this kind was materially changed to the advantage of persons owning property abutting upon such improvements.
    That, with the intent to avoid the operation of the new code upon improvements of this kind, the said city council, on the 28th June, 1869, entered into said contract, by the terms of which the work was to be completed on or before the 1st day of December, 1869.
    
      That up to the 29th November A. d. 1869, said Brophy & Casey had not done a stroke of work, nor expended any money in procuring material for said improvement, or in any manner shown any disposition to execute said contract.
    That on the said 29th day of November said Brophy & Casey, through said Jesse S. Norton, a member of said city council (and one of the defendants in error), presented a petition to the said council to extend the time for the completion of said contract.
    That upon the first vote the petition was rejected; but through the personal solicitation of said Jesse S. Norton. one member of said council was induced to move a reconsideration ; a vote was taken, a reconsideration was had, when it was.found there were seven (7) ayes and five (5) nays upon the adoption of the resolution to extend said contract.
    Thereupon said original contract was indorsed, “ Extended to August 1, 1870.”
    Said answer further avers that at the time of said pretended extension of said contract the same had become forfeited.
    That the city council had no power to renew it, except under the provision of the municipal code in force at the time of making such extension.
    That at the time said contract was extended the job might have been let at a much lower price.
    That said extension of said contract was illegal and void.
    That all the work which has been done upon said street was done under said extended contract; and the, said assessment was made in pursuance of the laws existing prior to the 1st day of July, 1869, and not under the laws in force at time of extension of contract.
    The answer further avers that prior to 'the commencement,of said improvement, and before said Brophy & Casey, or said Norton & Casey, had done any work under said contract, said Hubbard & Dyer (together with the other property-owners on Monroe street) protested against the said Brophy & Casey, or said Norton & Casey, proceeding therewith, and giving notice to said Brophy & Casey, and the said city council, that they should resist the collection of any assessment under said contract, by reason of its fraudulent and illegal character.
    Said answer denies that any contract was ever entered into between said Brophy & Casey and the city of Toledo in accordance with the provisions of said ordinance of June 28, 1869, as is alleged in petition, and denies all and singular the allegations of said petition touching the making and entering into said contract; and, having fully answered, pray they may be hence dismissed with costs.
    The reply denies all allegations of fraud and combination, and puts in issue all the material allegations of the answer, and avers that the city had not prepared the street ready for the work by grading necessary to be done; that they were prepared to go on with the work within the time named in the contract, but were' prevented by the failure of the contractor,who had the grading, to have the street ready.
    Upon the issues thus made the case was tried in the common pleas, and again in the district eourt on appeal, and judgment rendered against plaintiffs in error, to reverse which this petition in error is prosecuted.
    There is no proof to support the allegation that the city authorities acted in bad faith, so that the case stands as if this allegation had not been made.
    
      E. D. Potter, Jr., and Osborne & Swayne, for plaintiff in error:
    I. The recommendation of the board for the improvement was necessary to give the council jurisdiction to make the same, and it was alike mandatory upon the board to state that “ an assessment would be required,” and “ the proper amount to be assessed.” 2 S. & C. 1526, sec. 105; Welker v. Potter, 18 Ohio St. 85.
    II. The city council should not have extended the time for the completion of the contract, without the action of the board of improvements first recommending the same.
    But if the council had the power to give new life to the contract, by extending the same by resolution, it should have been in accordance with the laws in force at the time of the extension. 2 Bosw. 188.
    The action of the council was wholly illegal and void, and hence Norton & Casey can recover nothing from the plaintiffs in error. Their action is against the city. Welker v. Potter, 18 Ohio St. 85; Adams Lessees v. Jeffries, 12 Ohio, 253; Culbertson v. Cincinnati, 16 Ohio, 574; McMicken v. Cincinnati, 4 Ohio St. 394; Harbeck v. Toledo, 11 Ohio St. 219; Sharp v. Bronson, 4 Hill, 93.
    III. The contract between Brophy & Casey and the city of Toledo for the improvement of Monroe street was obtained by virtue of a fraud practiced upon the city council and the public and these property owners.
    The contract was obtained through a conspiracy, combination, and collusion between the principal grading and paving contractors in the city of Toledo, including Brophy & Casey, not to bid against each other, or to compete for any of the June, 1869, letting of contracts by the city of Toledo, but to divide the work.
    
    The contract was therefore against public policy and void. Broom’s Legal Maxims, 492, 498; Holman v. Johnson, Cowp. 343; Story’s Eq. Jur., sec. 293; 1 Story on Con., secs. 495, 545, 548; Booth v. Hogsden, 6 Term, 498; Edgar v. Fowler, 3 East, 225; Mitchell v. Smith, 1 Binney, 120; Tool Co. v. Norris, 2 Wallace, 54, opinion by Field, J.; Hanning v. Eve, 3 Cranch, 242; Hawley v. Cranner, 4 Cow. 718; 1 Bouviers’ Law Dic. 613, secs. 7, 8, 9; Walker’s Am. Law (5 ed.), 423; Ludlow Heirs v. Little, 2 Ohio, 504, 505; Doolin v. Ward, 6 John. 194; Clugas v. Penaluna, 4 Term, 466, 468; Armstrong v. Toler, 11 Wheat. 261; Garlick v. Ward, 5 Halstead, 87; Jones v. Coswell, 3 John Ca. 29; Wilbur v. Howe, 8 John. 444; Thompson v. Davis, 13 John. 112; Trimble v. Doty, 16 Ohio St. 118; Robinson’s Ex’r v. Robinson, 17 Ohio St. 480.
    
      
      M. R. & R. Waite and C. H. Scribner, for defendant in error:
    I. No question is made as above stated, but that tbe board ■ of improvements recommended tbe improvement; nor is there any question as to the regularity of the action of the council upon that recommendation ; nor is there any averment in the answer that the board of improvements did not regularly report to the council from time to time, as the work progressed, the proper amount to be assessed. The objection is, that at the time of the recommendation of the improvement the board of improvements did not report that an assessment would be required, and the proper amount to be assessed.
    The construction of the statute thus contended for is forced, unnatural, and utterly impracticable. The obvious meaning of the enactment is that the board of improvements shall report from time to time to the Council when an improvement is necessary or proper; and when an assessment is required, as the work progresses, they shall also report the fact, and the proper amount to be assessed.
    A reconstruction of the language of this section in an amendatory act, passed April 27,1868 (S. & S. 831, sec. 124), shows the true interpretation of its meaning.
    II. The extension of the time within which the work was to be done was not the making of a new contract, and was within the authority of the city council.
    Brophy & Casey were not in fault in not having entered upon the performance of the work prior to the date of the extension.
    The default was the city’s, and certainly the city, the contracting party, could not put an end to its contract by its own default.
    But suppose the fact had been that the contractors, and not the city, were in fault, how would the case have stood then ?
    The contract contains a clause stipulating that, in the event of failure on the part of the contractors, the city has the option either to declare the contract forfeited or to procure third parties to do the work, and charge the contractors with the difference between the contract price and the price paid for it. This is the provision usually inserted in contracts of this kind, and it is a very proper one; but, according to the argument upon the other side, the contract became, ipso facto, forfeited by the failure of the contractors. No discretion could be exercised by the city. It was absolutely necessary for new action to be had by the board of improvements. There must be further formal legislation by the city council; new bidding advertised for; new contracts entered into, etc.; attended with all the delays incident to proceedings of that character. This is an extraordinary doctrine, and is manifestly untenable. People ex rel. v. Brennan, 18 Abb. Pr. 100.
    III.' In reply to the charge of conspiracy and fraud, we say:
    1. The existence of any such combination as is alleged is utterly denied.
    2. The action in the court below was not founded upon the contract. The property owners are, in no sense, parties to the contract entered into between the city and the other contracting parties. Brewster v. Syracuse, 19 N. Y. 116.
    3. "Where an agreement has been entered into not to compete at public biddings, the authorities are simply that an action can not be maintained upon such a contract. And we think no case can be produced, holding that the contract obtained by the bidding is void. In re Carew’s Estate, 26 Beav. 187; Galton v. Enness, 1 Call. 243; Kerr on Fraud (Eng. ed.), 166; Phippen v. Stickney, 3 Met. 384; Bellows v. Russell, 20 N. H. 427; Sewell v. Jones, 1 Watt & Serg. 128; Oliver v. Piatt, 3 How. 334.
    4. Even if the proof established snch a combination as charged, and that by reason of it the contractors have obtained an unfair advantage, all that justice could require or the law grant, would be that the property owners should be permitted to limit the recovery to a fair and reasonable price. Kerr on Frauds, 276 et seq.; Campbell v. Fleming, 1 Ad. & El. 40.
    
      An act to be fraudulent must be one which, if permitted to be enforced, would work to the injury of the party seeking to avoid it. Keller v. Johnson, 11 Ind. 387; Hemingway v. Hamilton, 4 M. & W. 115.
    Fraud will never be imputed when the facts upon which it is predicated may be consistent with honesty and purity of intention. Wilson v. Hillhouse, 14 Iowa, 199.
   Johnson, J.

Three objections are made to the judgment in this case:

First. That the board of improvements should not only have recommended to the council the improvement, but that an assessment would be necessary to pay for the same, and the proper amount to be assessed. That such report, that an assessment would be necessary and the proper amount, is as much a condition precedent, as a report in favor of such improvement.

Second. That the city extended the time for the performance of the work from December 1, 1869, to August 1, 1870, without authority of law.

Third. That the contract was obtained from the city by fraud practiced on the city council and on the property owners.

I. "Was it necessary to the validity of the action of the city council that the board of improvements should have recommended not only the improvement, but that an assessment would be required to pay for the same, and the amount thereof?

In Welker v. Potter, 18 Ohio St. 85, it was held: “ That the adoption of the resolution declaring the improvements necessary, etc., were conditions precedent to the exercise of authority to pass a valid ordinance or make an assessment on adjoining property to pay for them;” and it is claimed, for the same reasons, that the board of improvements must report, “ that an. assessment will be required to pay for the same and the proper amount to be assessed; ” and that such report is as much a condition precedent as the recommendation of the improvement itself.

'We do not concur in this view. The statute (2 S. & O. 1526, sec. 105) provides that, “in all cities of the first-class, where there shall be a board of city improvements, no improvement or repair in relation to streets, sewers, or bridges shall be ordered or directed by the city council, except on the report and recommendation of said board. All petitions from owners of property in relation to such improvements shall be presented to such board, who shall report from time to time to the city council when any such improvement is necessary or proper, and when an assessment is required, and the proper amount to be assessed ; and the city council shall take such action thereon as may be deemed proper.”

The statute does not vest in the board of improvements the power to determine when an improvement shall be paid for by an assessment. The mode of payment must either be determined by the law, or, when not, by the council.

If no assessment is required, as if the improvement is to be paid for out of the general fund, then no such report is necessary or required.

In cases where it is required, the amount must be ascertained before an assessment can bo reported. Until the contract is awarded, the amount can not be ascertained. Before that it would be an estimate.

The statute says no improvement or repair shall be ordered, except on the report and recommendation of the board of improvements; but it does not say it shall not be ordered, except on a report that an assessment would be required, and the proper amount required. These duties of the board are not conditions precedent, like the report and recommendation of the improvement.

II. It is claimed that in law this contract expired December 1, 1869, the time the work was to have been completed; that prior to that time no work had been done under it, and that the action of the city council on the 29th of November, 1869, in extending the time of performance to August 1,1870, was in fact equivalent to making a new. contract, and required, under sections 97 and 98 of the municipal code, the assent of a majority of all the members elected to grant such extension.

Section 97, aforesaid, provides that “all ordinances and resolutions, and all by-laws for the government of the council, shall require for their passage or adoption the concurrence of a majority of ail the members elected.”

If, therefore, the action of the city council on the 29th of November comes within the purview of this section, it was illegal, as but seven out of sixteen members voted in its favor.

To determine this we must look to the record to see what the facts were, and what action, if any, was necessary to warrant the contractors in taking further time to complete the job.

The record discloses the fact that prior to November 29th the contractors had rented a dock, and made contracts for the delivery of stone from Buffalo, and had delivered a small quantity ready for use in paving, but were unable to get possession of the street to grade and pave, because one Welker, who had the contract for bringing the street to grade, had not completed his work, and in fact did not do so until about the last of April, 1870. In this condition of things, the contractors sent a petition to council, representing that they had all the material contracted for, and a portion delivered, and that they were ready and anxious to proceed whenever the street was delivered into their hands, but that the grading was let in a separate contract to other parties, and was not completed. Eor these reasons they asked an extension of time. Their request was granted by a vote of seven to five, there being only twelve out of sixteen members present.

It does not appear there was any want of diligence by the contractors, or that they were otherwise in default; on the contrary, it clearly appears that the delay was one for which they were not responsible.

The contract provided that in the event of failure of the contractors to perform their covenants, the city had the option to declare it forfeited, and re-let the work, or to employ others to complete the work, and charge them with the difference.

There was no forfeiture if the work was not done within the time, except at the option of the city.

If it did not choose to exercise that option, the contractors might continue their work, and the right to exercise such option depended on the contractors being in default.

In this case the delay was not theirs, and hence no cause for forfeiture existed.

The municipal code took effect July 1, 1869.

By caution 725 all rights and liabilities, either in favor of or against the city, which existed when the code took effect, were expressly saved ; so that if this was a subsisting valid contract July 1, 1869, and was not thereafter forfeited, it continued to be such valid obligation without the assent of the council to the extentions of time.

It was an act of prudence to obtain such consent, but, under the circumstances, was unnecessary.

But, admitting that the contractors were in default, it was within the discretion of the city authorities to declare a forfeiture, and re-let the work, or to allow them to complete it.

In the exercise of that discretion they acted as the legal representatives of the public, including these plaintiffs in error. By their action, in good faith and within the scope of their authority — and there is no impeachment of their conduct in this case — the tax-payer is bound.

Time is. not of the essence of the contract, unless made so by its terms. Had the council taken no action at all, but simply permitted the work to go on to completion, and then accepted it, as they did in this instance, no one would claim the work was not performed under the contract, and it would be grossly inequitable to permit the city, after such acts of acquiescence, to attempt to defeat a recovery on the ground that the work was done after the time stipulated in the written contract.

All the resolutions and ordinances required had been passed, and the contract made prior to the municipal code. The duty only remained to see that it was properly executed. This duty devolved on the board of city improvements, by chapter 45 of that code, under control of the council perhaps.

There is no intimation that the city authorities have not faithfully performed that duty, and if we admit, as claimed, that the work should have been done by December 1,1869, still this was a default that might in the discretion of the proper officers be waived, if by so doing the public interest was thereby promoted, without an ordinance or resolution of the council; and we are of opinion that allowing the work to go on to completion, and then accepting and paying for it under the contract, would, constitute such waiver.

III. This brings us to the most important question involved, i. e., have the contractors who have performed the work, and received payment on this assessment, a right to recover the assessment, or are they barred from such recovery by reason of the facts set up in the answer as to the fraudulent combination among contractors ?

It is claimed that the maxim “ ex turpi causa non oritur actio ” forbids such recovery :

That said contract was obtained through a conspiracy, combination, and collusion between the principal grading and paving contractors in the city of Toledo, including Brophy & Casey, not to bid against each other, or to compete for any of the June, 1869, letting of contracts by the-city of Toledo, but to divide the work.

Was'there such a fraudulent combination as would bar a recovery under the circumstances disclosed ?

We have examined this evidence with much care. It is-somewhat conflicting. That there was an understanding-among leading contractors with reference to the large contracts to be let is clear, but whether the object and tenor of that understanding was such as in the eye of the law made the bid of these parties a fraudulent one, is by no-means clear in the light of the whole evidence. At most, the proofs on this point are not so convincing as will warrant. a reviewing court in reversing on the ground that the, findings of the district court are clearly against the weight of the evidence. That court saw the witnesses, heard them subjected by able counsel to the ordeal of cross-examination, aud its conclusions upon questions of fact under such favorable opportunities for carefully weighing the evidence will not lightly be disturbed.

Here we might stop, but the importance of the question and-the zeal aud ability with which counsel have pressed their view of it, justifies and perhaps requires us to examine more at large the law of the case.

If we concede that there existed the alleged combination,, it by no means follows that they are absolutely barred from a recovery in this action for either tHe whole of this assessment, or such part thereof as corresponds with a fair and reasonable value of the work.

This is an action to recover the assessment turned over 'by the city in payment for the work, and not on the contract alleged to have been fraudulently obtained.

The city authorities were satisfied with the bid, and .awarded the contract. It is not claimed that they were a party to this fraudulent combination, nor that the contract was not faithfully performed in every respect, nor does it •clearly appear that the price agreed to be paid was not at the time reasonable and fair, in view of the mode of payment.

The work was done, as we may suppose, under the direct supervision of the board of improvements, and was accepted and paid for in full compliance with the terms of the contract. More than this, on the 15th of May, 1870, .-and before the work was fairly begun, the plaintiffs in ■error, desiring to be relieved from the burden here complained of, appealed to the council, by a petition, charging that this contract was obtained in fraud of their rights, and protesting against the prosecution of the work, at the same time giving notice that they would resist the-collection of the assessment. What special action the council took on this protest does not appear, but we may fairly presume that, in the discharge of a sworn public duty, it was of opinion it was not well founded, or if it was, that it was for the public intérest to waive the right to stop the work, and insist on a performance by the contractors. Whatever may have been the motive, we know they permitted, and, for aught that appears, required the work to go on, and accepted and paid for it with full knowledge of the matters set up in this defense.

By the law of the land, the city authorities are made the representatives of the public interest. Within the scope of their authority, or where they are vested with discretionary powers, their acts in good faith are final. In contracts of this kind they are the agents of the tax-payers. If fraud had been practiced upon them in obtaining this contract, their duty was to take steps to redress the injury to the city. They could rescind this contract and recover damages for the fraud. The contractors were at their mercy. They were bound or loosed, as the council might determine, in view of the public interest. They could not take advantage of their own wrong and abandon the work, but must go on unless stopped.

If the city chose, it could compel performance. If, after knowledge of the fraud, the city elected to exact a performance, and accept the fruits of labor and money expended thereafter, and in all respects treated the contract as subsisting, both the contractor and the public, whose agents they were, are bound if the city authorities acted in good faith. The contract being voidable only at the option of the other party, and having been treated by the city, after notice of the fraud, as a valid contract, the performance exacted, the work accepted and paid for under it, we can not say it was a nullity, or that the contractors are not entitled to a fair compensation for their work. Were this an action against the city to recover the contract price of the work, it is clear that they could recover', on the ground of a. waiver of the fraud, and, after being notified of it, continuing the work. On the other hand, if, on receiving such notice, the city had refused to proceed, or to accept the work when completed, the case would have been different.

As between the parties, we have the case of an executed contract on both sides. As to the city, whatever it was required to do, was done after this notice and protest of the parties assessed.

The defendants knew of this alleged fraudulent combination on the 15th of May, 1870, if not sooner, and appealed to the council for relief, which the council did not grant, but went on with the work, it may be because they regarded the complaint as unfounded. Eor the failure of the council to act, the law gave the property owners an adequate remedy by injunction to restrain the prosecution of the work.

By sec. 159 of the municipal code, it is made the duty of the city solicitor to apply for an injunction to restrain the execution or performance of any contract “ which was procured by fraud; ” and if he fail, upon the request of any tax-payer to do so, then, by section 160, it shall be lawful for such tax-payer to institute a suit in his own name on behalf of, the corporation.

On the 15th of May the property owners might have enjoined this work, if the facts were as they claim, while yet the larger part remained to be done.

They chose to rely on their protest, and to allow the contractors to expend large sums in the completion of the contract, and to permit the council to accept the work and pay for the same, and for themselves have received and enjoy whatever benefits accrued to them as abutting lot owners.

Under these circumstances, we are of opinion that, in this action to recover the assessment, the property owners can not claim exemption for a fair price for this work.

If the property holders have sustained an injury by reason of the fraudulent inceptiou of the contract, the recovery in such case should be limited to a reasonable price.

This conclusion is in accord with the equitable provisions' of section 550 of the municipal code, which provides that when there is any irregularity or defect in the assessment, the court may render judgment for the amount properly chargeable.

If we were to hold otherwise, we would have an anomalous condition of things in the administration of municipal government — a condition in which each individual could refuse to be bound by the judgment and discretion of the lawful authorities in all matters of local government involving public improvement and the performance of contracts, and resist the payment of the expenses,' on the ground that, in his judgment, the corporation should not have incurred the obligation.

Courts should always be vigilant to restrain the abuses of corporate power, yet when the authorities of a municipal corporation are acting within the scope of their authority, and in good faith, they are the legally constituted agent of all the citizens to the extent of their authority, and the courts should be slow to intervene.

The letting of contracts for improvements in a municipal corporation, and the manner in which such contracts shall be executed, are within the scope of their authority.

In a case like the present, when, with a full knowledge of all the facts, they have deemed it for the public interest to treat the contract as a subsisting one, notwithstanding the misconduct of the contractors, and have exacted a performance, accepted and paid, for the work, it would be subversive of orderly self-government to now allow the parties assessed to reopen the question, to enable them to enjoy all the fruits of the improvement, without paying a fair and reasonable part of the assessment.^

We think the action of the city authorities, in treating this contract as a continuing and binding obligation, in supervising and accepting, the work, and in the delivery of this assessment in payment thereof, after knowledge of this defense, was the exercise of a discretion vested in them, binding on the public, whose agents they were; and that by reason thereof, and because the plaintiffs in error failed to enjoin the prosecution of the work, they are now estopped from interposing this defense as a bar to a recovery for any amount.

If, however, such defense is made out, and that actual injury is shown to have;resulted, the amount of recovery should be limited to a fair and reasonable value for the work. The city authorities had no power to waive the damages accruing to the parties assessed by reason of the fraudulent acts of the plaintiffs.

No ^uch damages, however, are shown in this case to wai’rant an abatement, nor was this defense interposed for that purpose, but to defeat any recovery.

Judgment affirmed.