1. Where a city council is vested with power to cause sidewalks
in the city to be constructed, it may authorize the mayor, and the
chairman of the committee on streets and alleys, to make, in its
behalf, and pursuant to its directions, a contract for doing the
work.
2. A provision in the charter that the city council shall not
borrow for general purposes more than $50,000 does not limit the
debt of the city, nor prohibit the council from entering into a
contract involving an expenditure exceeding that amount, for
special improvements, such as the grading and paving of streets and
the construction of sidewalks, which are authorized by the
charter.
3. Such a contract is not rendered wholly inoperative because it
provides that the work done under it shall be paid for in bonds of
the corporation the
Page 96 U. S. 342
issue whereof was not authorized by law. The contract, so far as
it is in other respects lawful, remains in force, and for the
breach thereof the corporation is liable.
4. The contract in question in this case construed, and the
proviso therein in reference to the consent of the owners of the
property fronting or abutting on the pavements to be laid held to
have reference to the materials to be used in constructing them,
and not to the execution of the work itself.
The judgment in the court below having been given upon a
demurrer to the plaintiffs' petition, there is no controversy about
the facts.
The City of Galveston, proposing to improve some of its
sidewalks, entered into a contract with Dexter G. Hitchcock and
James W. Byrnes, the plaintiffs, by which they agreed to furnish
the materials and in whole or in part to do the work necessary for
the improvement. The work consisted of filling, grading, curbing,
and paving. By ordinance, it had been determined that the sidewalks
should be paved with one or the other of the following-described
materials:
"Asphalt, hard bricks laid in a bed of Portland cement and
properly grouted, concrete made of Portland cement mixed with other
proper materials, or with tile or stone laid in a bed of Portland
cement."
The ordinance contains a provision that the "owners of lots or
parts of lots who represent in each block a majority of the feet
fronting or abutting upon any sidewalk of the same which is to be
paved" shall have the
"right . . . to select and designate which of the said materials
they prefer and desire to be used in the construction of the
pavement to be laid down on the said designated sidewalk,"
reserving, however, to the chairman of the committee on streets
and alleys the right to determine the material to be used in case
the lot owners failed to make a selection. Of course, grading,
filling, and curbing were a necessary preparation to any of these
different modes of paving, and the city ordinances made provision
for these several kinds of preparatory work, as well as for the
paving. It was in pursuance of these ordinances that the contract
was made. By it, the city engaged in the first instance to pay to
the plaintiffs the sum of $1.75, in bonds of the city, styled
"Galveston city bonds for sidewalk improvements," to be taken at
par, for every square
Page 96 U. S. 343
yard of pavement laid down by them upon certain designated
sidewalks, the pavement to be composed of asphalt in bulk, rolled
solid to the thickness of three inches; provided, however, the
plaintiffs
"obtain the written consent of the owners of the property
fronting or abutting upon the said sidewalks to the laying down of
the said pavement, which written consent or selection of said
pavement shall be filed in the mayor's office with the city
clerk."
Following this conditional arrangement for an asphalt pavement,
where such a pavement might be selected, the parties by the
contract entered into other engagements. The city undertook to pay
to the plaintiffs in the said bonds, to be taken at par, the sum of
$1.25 for every cubic yard of filling necessary to be done "upon
any and all of the said sidewalks preparatory to the laying of any
pavement thereon," the above price to include not only the filling
but the grading, tamping, and rolling.
The contract next contained an engagement of the city to pay to
the plaintiffs in the said bonds, to be taken at par, forty-five
cents for each square foot of wooden curbing (to be composed or
made of three-inch cypress) "that might be needed or used in
filling up and grading the said sidewalks preparatory to putting
down the said pavement, or any other."
The contract also bound the city to pay the plaintiffs for
wooden curbing needed or used for putting down the pavements that
were to be only six feet in width. In consideration of all these
promises of the city, the plaintiffs bound themselves to lay down
and fabricate the said pavement in the manner and style above set
forth and stipulated, and they also bound themselves to fill,
grade, tamp, roll, and curb the said sidewalks as above set forth
and stipulated, and to receive in payment for all the said work the
respective prices above stated in Galveston city bonds for sidewalk
improvement at par. They further bound themselves to commence the
work within twenty days and to finish it without unnecessary
delay.
Accordingly, they proceeded to fulfill their engagements. They
made contracts for labor and materials, performed a large amount of
work, completed the curbing and filling of some sidewalks, and were
going on in earnest to finish the entire work when,
Page 96 U. S. 344
at the expiration of forty-six days, they were compelled by
force and by authority of the city to abandon their work without
any fault of their own. On the 20th of April, 1874, the city
council declared the contract null and void and directed the mayor
to notify the contractors to that effect, which he did two days
thereafter. Hence the present suit to recover damages for the
breach of the contract.
The demurrer to the petition was sustained, and judgment
rendered for the defendants. The plaintiffs sued out this writ of
error.
Page 96 U. S. 347
MR. JUSTICE STRONG, after stating the case, delivered the
opinion of the Court.
The demurrer to the plaintiffs' petition raises several
questions, all relating to the validity or construction of the
agreement between the parties. These questions were not all
considered by the circuit court, but, as we are of opinion that
court erred in giving judgment for the defendant, we cannot
overlook any consideration that could justify such a judgment.
It is contended on behalf of the defendants that the City of
Galveston had no power given to it by law to make the contract
which was made, or bind itself to pay with the bonds described, for
sidewalk improvements. The contract was made on behalf of the city
by the mayor and the chairman of the committee on streets and
alleys, who had been authorized and directed by ordinance "to enter
into and make contract or contracts with proper and responsible
parties to fill up, grade, curb, and pave the said sidewalks"
(those designated in the ordinance and mentioned in the contract),
and as the petition of the plaintiffs averred, it was ratified and
approved by the city council as the act and deed of the defendant.
The authority of the council is found in the charter of the city.
The first section of tit. 9, art. 1, of the charter declares that
the city council shall be invested with full power and authority to
grade, shell, repair, pave, or otherwise improve any avenue,
street, or alley or any portion thereof within the limits of said
city whenever by a vote of two-thirds of the aldermen present they
may deem such improvement to be for the public interest.
Page 96 U. S. 348
And sec. 8, art. 3, tit. 4, confers upon the city council
power
"to establish, erect, construct, regulate, and keep in repair
bridges, culverts and sewers, sidewalks and crossways, and to
regulate the construction and use of the same,"
and the section adds that
"The cost of the construction of sidewalks shall be defrayed by
the owners of the lot, or part of lot or block fronting on the
sidewalks, and the cost of any sidewalk constructed by the city
shall be collected, if necessary, by the sale of the lot, or part
of lot or block on which it fronts, together with the cost of
collection, in such a manner as the city council may by ordinance
provide, and a sale of any lot or part of lot or block to enforce
collection of cost of sidewalks shall convey a good title to the
purchaser, and the balance of the proceeds of sale, after paying
the amount due the city, and cost of sale, shall be paid by the
city to the owner."
The city is thus authorized itself to construct sidewalks, and
though the cost of construction is to be defrayed by the abutting
lot owners, the city is to collect from them the cost and, in case
of the sale of any lot made to enforce the collection, the city is
to pay to the owner the surplus of any proceeds of sale remaining
after payment of the amount due to it. It is not to be denied that
this section confers upon the city council plenary authority to
construct the sidewalks and to do whatever is necessary for the
construction not prohibited by some other provision of law. The
resort to the lot owners is to be after the work has been done,
after the expense has been incurred, and it is to be for
reimbursement to the city.
If the city council had lawful authority to construct the
sidewalks, involved in it was the right to direct the mayor, and
the chairman of the committee on streets and alleys, to make a
contract on behalf of the city for doing the work. We spend no time
in vindicating this proposition. It is true the council could not
delegate all the power conferred upon it by the legislature, but,
like every other corporation, it could do its ministerial work by
agents. Nothing more was done in this case. The council directed
the pavements, ordering them to be constructed of one or the other
of several materials, but giving to the owners of abutting lots the
privilege of selecting which, and reserving to the chairman of
their committee authority to
Page 96 U. S. 349
select, in case the lot owners failed. The council also directed
how the preparatory work should be done. There was therefore no
unlawful delegation of power. But if there had been, the contract
was ratified by the council after it was made. A sufficient
ratification, if any was necessary, is averred in the petition and
again and especially in the amended petition.
Another objection to the validity of the contract urged by the
city is founded upon a provision of the charter that the council
shall not borrow for general purposes more than $50,000, and it is
said the contract, if valid, creates a liability of the city
exceeding that sum. This, however, does not appear in the contract
itself, and this perhaps is a sufficient answer to the objection.
But the limitation is upon the power to borrow money, and to borrow
it for general purposes. It implies that there may be lawful
purposes which are not general in the sense in which that word is
used in the charter. An examination of the whole instrument and of
the numerous and large powers conferred upon the council, as well
as duties imposed, makes it evident that the provision could not
have been intended to prohibit incurring an indebtedness exceeding
the sum named. It is in no sense a limitation of the debt of the
city. If it is, the grant of power the charter contains was an idle
thing, and the duties imposed could not be performed. The council,
as we have seen, is empowered to grade and pave the streets and to
construct sidewalks. There is no express limitation of these
powers. Their exercise necessarily involves large expenditure. Such
expenditure is therefore authorized. It is a plain incident of the
power, and it is a special expenditure. It is for a new work,
unlike the work of keeping in repair. Conceding that it is a
purpose of the act incorporating the city, it cannot be regarded as
a general purpose, for if it is, all purposes of the charter are
general. Grading a street or making a sidewalk where none had
existed before is a special improvement, not like repairs of
constant recurrence. By another article of defendant's charter, the
city council was authorized to provide by ordinance special funds
for special purposes and to make the same disbursable only for the
purpose for which the fund was created. For these reasons we are of
opinion that the limitation upon the power of the council
Page 96 U. S. 350
to borrow for general purposes did not make the agreement with
the plaintiffs invalid.
We come now to objections which the circuit court sustained. The
learned judge held the contract inoperative because by it the city
agreed to pay for the work to be done and the contractors agreed to
receive in payment, at par, bonds of the city denominated
"Galveston city bonds for sidewalk improvement." These bonds were,
by the ordinance that authorized their issue, made payable to
bearer fifteen years after date, and the money realized from
assessment on property fronting on sidewalks improved by means of
their disposition was declared to be a special fund and
appropriated solely as a sinking fund for their redemption. The
issue of such bonds was held by the court to be transgressive of
the power of the city, and the ruling was thought to be supported
by the decision of this court in the cases of
Police
Jury v. Britton, 15 Wall. 566, and
The Mayor
v. Ray, 19 Wall. 468.
In the view which we shall take of the present case, it is
perhaps not necessary to inquire whether those cases justify the
Court's conclusion, for if it were conceded that the city had no
lawful authority to issue the bonds described in the ordinance and
mentioned in the contract, it does not follow that the contract was
wholly illegal and void or that the plaintiffs have no rights under
it. They are not suing upon the bonds, and it is not necessary to
their success that they should assert the validity of those
instruments. It is enough for them that the city council have power
to enter into a contract for the improvement of the sidewalks; that
such a contract was made with them; that under it they have
proceeded to furnish materials and do work, as well as to assume
liabilities; that the city has received and now enjoys the benefit
of what they have done and furnished; that for these things the
city promised to pay; and that after having received the benefit of
the contract the city has broken it. It matters not that the
promise was to pay in a manner not authorized by law. If payments
cannot be made in bonds because their issue is
ultra
vires, it would be sanctioning rank injustice to hold that
payment need not be made at all. Such is not the law. The contract
between the parties is in force so far as it is lawful.
Page 96 U. S. 351
There may be a difference between the case of an engagement made
by a corporation to do an act expressly prohibited by its charter
or some other law and a case of where legislative power to do the
act has not been granted. Such a distinction is asserted in some
decisions. But the present is not a case in which the issue of the
bonds was prohibited by any statute. At most, the issue was
unauthorized. At most, there was a defect of power. The promise to
give bonds to the plaintiffs in payment of what they undertook to
do was therefore, at farthest, only
ultra vires, and in
such a case, though specific performance of an engagement to do a
thing transgressive of its corporate power may not be enforced, the
corporation can be held liable on its contract. Having received
benefits at the expense of the other contracting party, it cannot
object that it was not empowered to perform what it promised in
return, in the mode in which it promised to perform. This was
directly ruled in
State Board of Agriculture v. Citizens'
Street Railway Co., 47 Ind. 407. There it was held that
"Although there may be a defect of power in a corporation to
make a contract, yet if a contract made by it is not in violation
of its charter or of any statute prohibiting it, and the
corporation has by its promise induced a party relying on the
promise and in execution of the contract to expend money and
perform his part thereof, the corporation is liable on the
contract."
See also, substantially to the same effect,
Allegheny City v. McClurkin, 14 Pa.St. 81, and, more or
less in point,
Maher v. Chicago, 38 Ill. 266;
Oneida
Bank v. Ontario Bank, 21 N.Y. 490;
Argenti v. City of San
Francisco, 16 Cal. 256;
Silver Lake Bank v. North, 4
Johns. (N.Y.) Ch. 370.
We think therefore the circuit court erred in holding the
contract of the city with the plaintiff invalid.
Nothing remains but to consider the extent of the proviso
following the first clause of the agreement. It is insisted on
behalf of the city, and it was so held by the circuit judge, that
the proviso was a condition precedent to the performance of any
part of the work and was required to be performed before any part
of the contract became binding on the city. Such is not our
construction of the contract. The petition of the plaintiffs, with
its amendments, sets forth the ordinances of
Page 96 U. S. 352
the city and avers that the city, contemporaneously with this
contract, made various other contracts with other parties for
paving the sidewalks named, with the various materials respectively
therein named, each conditioned, as was the contract with the
plaintiffs, that the lot owners should select the kind of pavement,
whether asphalt or some other kind, directed by the ordinance. The
plain object of this proviso was to save to the lot owners the
privilege given to them by the ordinance directing the pavements to
be constructed. They were to be constructed, at all events, of one
or the other of certain specified materials, and the lot owners
were allowed to select which. If in any block they preferred brick,
the contractor for brick paving was to put down that kind of
paving. If they preferred asphalt, the contractor for asphalt was
to pave with that material. But the ordinance gave to the lot
owners no liberty of choice whether there should be a pavement or
none or whether the sidewalks should be filled, graded, curbed, and
prepared for a pavement of some kind or not. That was determined by
the council. That work was absolutely directed to be done. And the
contract, we think, followed the ordinance. In it the undertakings
of the plaintiffs for paving, filling, grading, tamping, rolling,
and curbing are kept distinct from each other, and it is only to
laying down an asphalt pavement that the proviso required the
consent of the lot owners. No other construction is consistent with
the other parts of the contract. The proviso follows immediately
the provision for the asphalt pavement. It is succeeded by
arrangements for the filling, grading, and rolling, in the language
of the parties, "necessary and needed to be done upon any and all
of the said sidewalks, preparatory to the laying of any pavement
thereon." The contract, so far as it relates to the next subject,
is still more significant. We refer to the agreement for the wooden
curbing that might be needed or used in filling up and grading the
said sidewalks, "preparatory to the putting down of the said
pavement, or any other." From this it is evident the parties
contemplated that the plaintiffs should do the preparatory work
upon all the sidewalks intended to be improved -- namely the work
needed to put those sidewalks in a fit condition to receive any one
of the pavements prescribed
Page 96 U. S. 353
by the ordinance. Which one should crown the preparatory work
was to be left primarily to the selection of the lot owners in each
block. If a majority of them chose asphalt, the plaintiffs were to
do the work. If a majority chose some one other of the materials
allowed in the ordinance, the contractor for a pavement made of
that other material was to construct that pavement. The filling and
curbing was to be done by the plaintiffs in any event, and it was
only the paving thereafter respecting which the lot owners had any
voice.
This suit has not been brought for paving nor for any breach of
the defendant's contract respecting the paving. The claim is for
damages caused by the abrogation or breach of the city's contract
relating to other and distinct subjects. Hence it was not necessary
to aver any consent of the owners of the property abutting upon the
sidewalks.
We are therefore of opinion that the original and amended
petitions sufficiently set forth a cause of action, and that the
circuit court erred in sustaining the defendant's demurrer.
The judgment will be reversed, and the record remitted with
instructions to give judgment on the demurrer against the
defendant, and it is
So ordered.
MR. JUSTICE BRADLEY, with whom concurred MR. JUSTICE MILLER and
MR. JUSTICE FIELD, dissenting.
I dissent from the judgment of the Court in this case, being of
opinion that the proviso requiring the assent of the property
holders related to the entire work around each block, and not
merely to the kind of pavement to be used, and that the contractors
had no authority to do any work on any particular block without
such previous assent.
