Title: Laing v. School District No. 10

State: oregon

Issuer: Oregon Supreme Court

Document:

Reversed and remanded December 5, 1950.
Petition for rehearing denied January 4, 1951.
*359 Edward C. Kelly, of Medford, argued the cause and filed a brief for appellant.
Jeannette E. Thatcher, of Medford, argued the cause and filed a brief for respondent.
Before LUSK, Chief Justice, and BRAND, ROSSMAN, HAY, LATOURETTE and WARNER, Justices.
REVERSED AND REMANDED.
ROSSMAN, J.
This is an appeal by the plaintiff from a judgment of the Circuit Court, entered upon a directed verdict, in favor of the defendant. The action which ended in the judgment was brought to recover damages for the alleged breach of a contract by the defendant.
The plaintiff submits only one assignment of error. It follows:
*360 The plaintiff is an architect. The defendant is a school district of either the second or third class: § 111-802, O.C.L.A.
This action is based upon a contract which the plaintiff and the defendant signed September 9, 1947. In the summer of 1947 the defendant desired to enlarge its schoolhouse by adding a gymnasium, a kitchen and a lunchroom. Pursuant to the terms of the agreement of September 9, 1947, the plaintiff undertook to prepare the needed plans and specifications. It is conceded that he prepared plans and specifications for a gymnasium, kitchen and lunchroom, but the defendant claims that it is not bound to pay for his work because the structure which he designed could not have been built with the money which the defendant could lawfully spend. The building which he designed was never built, and his papers were returned to him.
It is immaterial in this case whether the defendant is a district of the second or third class. The plaintiff concedes that it is not a district of the first class. The defendant's board of directors, as permitted by Oregon Laws, 1945, Chap. 79, which amends § 111-809, O.C.L.A., consists of three directors of whom one, P.G. Pedersen, is chairman. We shall now quote the statutes which are applicable to this case and will then make a summary of the evidence. The defendant presented no evidence.
Section 111-1014, O.C.L.A., as amended by Oregon Laws, 1947, Chap. 352, reads as follows:
Section 111-1016, O.C.L.A., referring to the board of directors, says:
Oregon Laws, 1947, Chap. 230, says:
(Oregon Laws, 1949, Chap. 8, which is not applicable to this case, amends the statute just quoted.)
Section 111-327, O.C.L.A., says:
*362 The total assessed valuation of all of the taxable property in the defendant school district in 1947 was $466,652.57. Ten per cent of that amount, $46,665.25, was therefore the total amount of indebtedness which the defendant could incur under Oregon Laws, 1947, Chap. 230.
The contract which the parties signed September 9, 1947, referring to the defendant as owner, stated: "The Owner intends to erect Gymnasium, Dining Room & Kitchen." It described the contemplated construction in no other manner; that is, it mentioned nothing about the dimensions, cost or other feature of the proposed building. Referring to the plaintiff, it said: "The Architect agrees to perform, for the above-named work, professional services as hereinafter set forth." It then described the services which the defendant agreed to perform and specified the compensation that he should receive.
The relationship of architect and principal which subsequently developed into this lawsuit had its inception June 17, 1947, when Mr. Pedersen, chairman of the defendant's board of directors, called upon the plaintiff and stated that the defendant wished to add to its schoolhouse a gymnasium, dining room and kitchen. Evidently Mr. Pedersen had not determined the size of the structure which the defendant wished to build, for he could supply the plaintiff with no details concerning the desired work except the size of the basketball court around which the gymnasium should be built. The following day the plaintiff went to the defendant's schoolhouse and viewed the premises.
Prior to a meeting of the defendant's board of directors which was held July 8, the plaintiff prepared three sketches of the proposed improvement. Although *363 the plaintiff termed them sketches, a layman would deem two of them plans and the third a drawing of the outside of the proposed building. One of the sheets showed the suggested room arrangement for the basement floor and the other the room plan for the main floor, including the gymnasium. The plaintiff swore that at the meeting of the defendant's board which was held July 8, 1947, he showed his sketches and that the board approved them. He also swore that the county school superintendent gave his approval.
Upon the tender of the plaintiff, the minutes of the meetings of the defendant's board of directors, which were concerned with the relationship between the plaintiff and the defendant, were received in evidence. Those for the meeting of July 8 recite the following:
The minutes of a board meeting which was held July 17 recite that a resolution was unanimously carried which called
The minutes add that August 6, 1947, was selected as the time for the election, and, going on, declare:
The record shows that at the election held August 6, 31 votes were cast in favor of the construction of the building and the incurrence of the indebtedness, and 23 adverse to the proposals.
The bonds authorized by the election were sold. It appears that the defendant, in addition to their proceeds, possessed $5,000, but the clerk of the defendant school district testified that since that sum had not been appropriated in the school budget to any purpose, it was unavailable for expenditure.
The minutes of a board meeting which was held September 9, 1947, state: "An agreement was signed with Mr. Laing and he plans to advertise for contract bids which will close September 29." Although the contract was not signed until September 9, the plaintiff, as we have indicated, prior to that day had begun the preparation of the working drawings and specifications essential to the construction of the proposed structure.
When the working drawings and specifications had been completed, a call was issued for bids. The result is thus noted in the minutes of October 6, 1947:
The minutes add:
The plaintiff explained that at the time when the call for bids was issued, material men refused to quote *365 prices for future delivery and, therefore, contractors hesitated to enter bids. He deemed the tender received from Donald M. Drake Company a bid and, referring to it, testified: "Drake's was the only bid that was legitimate." All of the tenders were rejected. There is no claim that the building could have been built at any time since October 6, 1947, for $30,000.
Referring to the board meeting of July 6, when the plaintiff claims that his preliminary sketches received approval, he gave the following testimony:
He added:
Thus, we see that the plaintiff recognized that the board had no power to employ an architect for the construction of a building without first receiving authority from the voters.
With reference to the meeting which was held July 17, the plaintiff testified:
*366 His words, "increase it", meant the proposed issue of $30,000.
We quote further from his testimony, as follows:
In a letter which the plaintiff wrote February 4, 1948, to the defendant school board, he said:
The foregoing renders it clear that by July 17 the plaintiff knew that the building outlined in his sketches could not be constructed for the amount which the district would realize from its contemplated bond issue. We also see from the foregoing that when the plaintiff told the board that its contemplated bond issue was for an insufficient sum, the suggestion, implied in his statement, was not adopted. To the contrary, Mr. Pedersen, chairman of the board, repelled the proposal with the explanation that "the voters would not approve it." Evidently the rejection of the plaintiff's *368 suggestion was made by Mr. Pedersen in decisive tones, for the plaintiff, as a witness, added: "That's the answer to that." It is thus clear that almost two months before he signed the contract upon which this action is based, the plaintiff knew that the defendant would not have enough money to enable it to build the structure which he wished to design and that it would not seek a larger amount. When the plaintiff received the answer that "the voters would not approve it" he had prepared none of the working plans or specifications. He had at that time performed no work for which he now seeks recovery.
The clerk of the defendant school board, as a witness for the plaintiff, testified that the latter attended the board meeting on September 9, 1947. By that time the bonds had been sold. It was at that board meeting that the plaintiff presented for signature by the board the contract which we have described. He was its draftsman. The board's secretary, referring to the meeting of September 9, testified:
Thus, after the bonds had been sold and before the contract which underlies this action was presented for signature, the plaintiff was told again that $30,000 was the maximum of the available money. His suggestions that the board ask the voters for more money had again been rejected in his presence.
As a witness, the plaintiff made it clear that it was impossible to reduce the cost of constructing the building *369 which he designed to the sum of $30,000 by merely omitting such parts as the cabinets, the marquee and the dumb-waiter. He frankly stated: "It would mean redrawing the plans and specifications." He explained that the building would have to be made smaller, some rooms omitted, the roof truss discarded and some features abandoned in order to bring the cost down to $30,000. We again quote from him:
It will be recalled that the minutes of the board meeting which recite the amount of the proposals received from contractors said:
The plaintiff, however, made no effort to revise his plans so that the cost of construction would be reduced to the amount of the available funds. Possibly his explanation, which indicates that in order to design a gymnasium, kitchen and dining room which could be built for approximately $30,000 would have required him to discard the plans and specifications already prepared and draft a new set, may account for his inaction. Evidently the school board, apart from awaiting action upon the plaintiff's part, was uncertain as to the course it should pursue. The minutes of a meeting held November 11, 1947, state:
*370 Possibly the words, "the lowest figure was $45,000," meant the "lowest figure was $45,000 beyond the amount available." Following that meeting, the plaintiff sent the board a statement of account showing that he had earned $1,080.00. It was based upon "Amount of Bond issue  $30,000." Thus, the plaintiff accepted $30,000 as the basis for calculating his fee. The statement was accompanied with a letter which said:
The board replied in a letter, dated December 11, 1947, as follows:
The defendant's board interpreted the plaintiff's statement as signifying that he demanded $1,080.00 for the work which he had performed in the preparation of the plans and specifications for a building which, it developed, could not be built. They also inferred that he would not revise his plans or prepare new ones for a structure which could be built for the available money without remuneration at the contract rate, in addition to the demanded sum of $1,080.00. Thus, they saw that if they satisfied his demands they would pay at the contract rate for two sets of plans and specifications. We think that the board correctly construed the plaintiff's attitude.
*371 We see from the foregoing that the plaintiff demands payment for his work in the preparation of plans and specifications for a building which the defendant lacked money to construct. We also see that the plaintiff refused to design a $30,000 structure unless, in addition to being paid for his work in designing it, he would also be paid for his services in designing one that the defendant could not build. When matters reached the juncture just mentioned, the defendant returned to the plaintiff everything which it had received from him, and sometime after March 1, 1948, had a contractor, who made no use of the plaintiff's work, construct the annex. The plaintiff was given ample notice by the defendant of its intention to abandon his services unless he revised his plans so that it could build with the available money the structure which he had suggested. This notification brought no revision of the plans. Sometime later the plaintiff filed this action.
This action is based upon the premise that the plaintiff is entitled to judgment for the work which he performed in preparing the plans and specifications we have described. He does not seek the full contract price which is set forth in the agreement of September 9 because the sum fixed in that instrument includes compensation for work which he did not perform, such as the supervision of construction, and the keeping of accounts between the defendant and the contractors. It is apparent that the plaintiff, to be entitled to judgment, must show that the defendant's board had power to contract lawfully for the preparation of plans and specifications entailing construction of a building costing more than the sum voted by the taxpayers.
The above will suffice as a review of the record.
*372 The plaintiff, in endeavoring to show that he established a cause of action, depends much upon Bergholtz v. City of Oregon City, 116 Or. 18, 240 P. 225, which he describes as "directly in point." The plaintiff in that case, an architect, submitted plans to the defendant for a city hall which were accepted, provided the structure could be built for $35,000. We now quote from the decision:
The city, however, selected a new site for its building and never used the plaintiff's work. We think that the fact that the plaintiff, at the request of the city council, revised his plans and specifications so that his proposed building could have been built within the cost limitation distinguishes that case from this one.
Concerning the Bergholtz case, the plaintiff's brief says:
In the instant case, the plaintiff freely conceded that he at all times knew that the building shown by his plans and specifications could not have been built with the available funds. Unlike the Bergholtz situation, this case presented no issue of fact upon that phase for submission to the jury.
1, 2. It has been so many times pointed out that municipal corporations of the type of the defendant possess only the powers that are expressly conferred upon them by statute and others necessarily implied from the conferred powers, that no citation to authority is needed to support the statement of that simple rule. Those who contract with such bodies are charged with notice of their limited powers: Tuttle v. Beem, 144 Or. 145, 24 P.2d 12. In this case, the plaintiff, as a witness, conceded that he knew that the defendant could not contract for the construction of a building, including his architectural services, without first securing authority from the voters. He also knew that the voters had placed at the disposal of the defendant's board of directors, for the construction of the desired building, $30,000, and no more.
3. We think it is clear from the combined effect of Oregon Laws, 1947, Chap. 230, and § 111-1014, O.C.L.A., as amended by Oregon Laws, 1947, Chap. 352, that the defendant's board of directors had no authority to build a structure costing more than $30,000.
In Cooper v. City of Derby, 83 Conn. 40, 75 Atl. 140, a problem similar to the one before us was decided. The court said, in part:
In State ex rel. v. Pratt, 31 Wash. 2d 725, 198 P.2d 814, the court held that a county was not liable for architectural services which were rendered in designing a courthouse which could not be built with available moneys. The decision said:
4. A comprehensive annotation in 127 A.L.R. 410 says:
It must be apparent in this case as in State v. Pratt, supra, that if the parties contracted for plans and specifications for a building to cost more than $30,000, the defendant's board of directors acted ultra vires and the contract is unenforceable. But if the parties contracted for the plaintiff's services for a building to cost $30,000 or less, the plaintiff did not perform his contract, for he submitted no designs for a structure of that kind.
5. We do not believe that it can be said that the defendant's board of directors wittingly contracted for a structure to cost more than $30,000. The preliminary sketches which were shown to the board members indicated nothing about such costly features as heating and lighting. Nor did they show the proposed type of roof or the equipment in the nature of conveniences which the plaintiff incorporated into his working plans. In truth, so far as the record indicates, the board was never shown, and never approved, the working plans. Being uninformed concerning the matters just mentioned, the board could not itself have estimated the cost of constructing the building, even if the board members were competent to estimate construction costs. The board did nothing more than to adhere *376 steadfastly to its position: that there would be available for construction costs no more than $30,000. Why the plaintiff, who appears to be a competent architect, went ahead, in the face of the board's firmness, and prepared plans and specifications for a building which he knew the defendant could not build, we do not know. It is clear, however, that in pursuing his course he was not performing his contract, and that he is entitled to no compensation for his work. A tailor who makes a suit of clothes for a midget which can fit only a giant, and which is rejected when made, can collect nothing for his work, either upon contract or quantum meruit. The plaintiff has done nothing for which the defendant has authority to pay. He has not performed his contract.
As we have said, the attacked judgment is based upon a directed verdict. Immediately after plaintiff's counsel said "Plaintiff rests", defendant moved for a directed verdict. The defendant did not precede its motion with an indication that it, too, had rested. The presiding judge at that point inquired of defendant's counsel: "You are moving for an involuntary nonsuit; is that right?" and received the reply, "I think that would be right." Then the motion was argued, but, before a ruling was made, the plaintiff, with the consent of the trial judge, reopened his case and resumed the witness stand. After he had given some additional testimony and had again retired from the witness stand, defendant's counsel said: "I renew my motion." Presently plaintiff's counsel returned his client to the witness stand and, after some more testimony had been given and the plaintiff had again withdrawn from the stand, defendant's counsel said: "I would like to renew my motion." At that point the presiding judge, *377 over objections of plaintiff's counsel, directed the foreman of the jury to sign a verdict for the defendant.
We think it is evident that error was committed when a verdict was directed for the defendant. The motion for a nonsuit should have been sustained: § 6-201, O.C.L.A., as amended by Oregon Laws, 1941, Chap. 313, § 1. The attacked judgment is reversed. The cause is remanded to the Circuit Court with instructions to (1) vacate the judgment; (2) sustain the motion for a nonsuit; and (3) enter a judgment for the defendant based upon the order sustaining the motion for nonsuit.