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import the charter prescribing the matters in respect of which the were the corporation is authorized to act.

To the extent necessary to execute the special powers and functions with which it is endowed by its charter there is, indeed, an implied or inci

dental authority to contract obligations, and to sue and be agree 1

soed in the corporate name": Dillon on Municipal Corporadone tions

, sec. 443. but the As to the effect of ultra vires contracts, the same author the e

adds: pipe?

"The general principle of law is settled beyond controversy that the agents, officers, or even city council of a municipal corporation cannot bind the corporation by any contract which is beyond the scope of its powers, or entirely foreign to the purposes of the corporation, or which (not being legislatively authorized) is against public policy. This doctrine grows out of the nature of such institutions, and rests upon reason. able and solid grounds. The inhabitants are the corporators; the officers are but officers or public agents of the corporation. The duties and powers of the officers or 340 public agents of the corporation are prescribed by statute or charter, which all persons not only may know, but are bound to know. The opposite doctrine would be fraught with such danger and accompanied with such abuse that it would soon end in the ruin of municipalities or be legislatively overthrown. These considerations vindicate both the reasonableness and necessity of the rule that the corporation is bound only when its agents or officers-by whom it can alone act, if it acts at all-keep within the limits of the chartered authority of the corporation. The history of the workings of municipal bodies has demonstrated the salutary nature of this principle, and that it is the part of true wisdom to keep the corporate wings clipped down to the lawful standard. It results from this doctrine that contracts not authorized by the charter or by other legislative acts-that is, not within the scope of the powers of the corporation under any circumstances-are void; and, in actions thereon, the corporations may successfully interpose the plea of ultra vires, setting up as a defense its own Want of power, under its charter or constituent statute, to en. ter into the contract”: Dillon on Municipal Corporations, sec. 457. In section 458 of name work he says:

"Agreeably to the foregoing principles, & corporation cannot maintain an action on a bond or a contract which is in.

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valid; as, where a city, without authority, loaned its bonds to a private company, and took from it a penal bond, conditioned for 841 the faithful application of the city bonds to payment for works which the city had no power to construct or assist in constructing. The remedy in such case must be in some other form than in an action to enforce the contract. So, a contract by a city to waive its rights to go on with the laying out of a street or not, as it might choose, is, it seems, against public policy; and it is void if it amounts to a surrender of its legislative discretion": Dillon on Municipal Cor. porations, sec. 458.

See also case of Vanhorn v. Des Moines, 63 Iowa, 447; 50 Am. Rep. 750. This was a suit brought by the owner of a certain building, that had been destroyed by fire, against the city of Des Moines, predicated upon the neglect of Des Moines Water Works Company to supply sufficient water to extinguish the fire. It appeared in this case that the water works company was a private corporation, with which the city of Des Moines had contracted to furnish its fire department a certain quantity of water, and said water company further indemnified the city against all damages that might result to it by reason of the water company's negligence in the construction and operation of its works.

The court, after discussing the general liabilities of a municipal corporation for its failure to extinguish fires, and determining that there was no such liability, proceeded to consider the case with reference to the contract between the city and the water works, and on this branch of the case said:

"But it is said that the case at bar is peculiar, in this, that the city took a contract from the water works company to protect itself against all actions that might be brought against it for misfeasance or neglect on the part of the company, This indemnity, it is claimed, gives a right of action where otherwise it would not exist; but clearly this is not so. Indemnification against liability must always be regarded as having reference to existing grounds of liability, and not as serving to create new ones. Besides, the city could not assume liability for negligence in cases where the law did not already impose a liability. The contract, then, must be construed as covering cases only where an action might be maintained against the city independent of the contract."

In Becker v. Keokuk Water Works, 79 Iowa, 419, 18 Am. Ste

342

343

Rep. 377, the Vanhorn case is cited and approved; and in that case it was held that a city could not assume a liability for negligence where none was imposed by law, and that the contract of indemnity must be regarded as having reference to existing grounds of liability, and not as creating new ones.

Another case involving the same principle is Black v. City of Columbia, 19 S. C. 412, 45 Am. Rep. 785. Tbis was a suit to recover damages plaintiff had sustained in loss of his house

by fire. It was claimed by plaintiff, among other things, that the fire was the result of the defendant's negligence in failing to furnish a sufficient supply of water, as it had con. tracted and agreed to do. The court said:

“If, however, we consider that there was, as alleged, a distinct, express contract of the officers with the plaintiff, pero sonally undertaken to insure him an adequate supply of water in the pipes at all times for the purposes aforesaid, it does not necessarily follow that the action could be maintained upon such contract. That would involve another question-whether the officers of the corporation have the right to make such a contract. Doubtless there are cases in which a contract by a niunicipal corporation will be implied from facts. These, however, arise, for the most part, out of transactions in which the corporation itself has in some way received and used property or money which, ex æquo et bono, does not belong to it. But in all cases, either of express or implied contract on the part of the corporation, the contract cannot be enforced against the corporation if it is in violation of the charter or beyond the scope of the agency created by it. In such case the principle of respondeat superior does not apply, but the alleged contract is ultra vires, and void. To this class belongs an alleged contract which restricts the exercise of legislative discretion vested in the municipality or its officers in reference to public duties, and, upon such contract, the corporation 344 cannot be held, either in special or general assumpsit: Thomas v. City of Richmond, 12 Wall. 349; Dillon on Municipal Corporations, secs. 61, 372, and notes. In the case from Wallace, notes were issued by the city of Richmond to circulate as money, in contravention of law, and it was held that they could not be recovered. The court said: Municipal corporations represent the public, and are themselves to be protected against the unauthorized acts of their officers when it can be done without injury to third parties. Persons dealing with such officers are chargeable with notice of the powers

which the corporation possesses, and are to be held responsible accordingly. The issuing of bills by such a corporation, without authority, is not only contrary to positive law, but, being ultra vires, is an abuse of the public franchise which has been conferred upon it, and the receiver of the bills, being chargeable with notice, is in pari delicto with the officers, and should have no remedy against the corporation. .... The protection of public corporations from such unauthorized acts of their officers is a matter of public policy, in which the whole community is concerned,' etc. If, as alleged, there was, in this case, a contract by the officers of the city insuring to the plaintiff an adequate supply of water at all times and under all circumstances, we are inclined to the opinion that it was a contract restricting the discretion of the municipality beyond the scope of the charter, and if actually proved would not support an action against 345 the corporation."

. We add to this case, concluding the citation of authorities on the point in issue, the admirable comment in argument of counsel for the city, which concisely and accurately expresses the view of the court:

"As, in this case, it was held as the law itself imposed no liability on the defendant city for its failure to supply plaintiff with water, no contract that its officers might make could charge it with such liability; so, in the case at bar, it should be held that, as the law binds the defendant only to a careful and skillful exercise of the construction of its sewers, and does not impose on them the obligation and liability of an insurer, no contract that its officers might make could impose such liability.

“That a municipal corporation cannot and should not be bound by an ultra vires contract is a proposition that is well settled by authority and sustained by reason and justice. To hold otherwise would be to vastly enlarge the authority of public agents, and permit them to bind a municipal corporation by contracts absolutely probibited by law, and would thus expose the public to evils and abuse. that the limitations and restrictions thrown around corporate officers are in. tended to prevent. On the other hand, there is no hardship in such a doctrine, for these officers are public officers, whose 346 rights and powers are fixed by law, and he who is ignorant of them is ignorant without excuse.”

The Board of Public Works and Affairs could bind the city by contract so far and no further than it would have

been bound by law, that is, to ordinary skill and care in the

execution of the work agreed to be done. So, as is well said lam, tas in the same argument of counsel: hich “If they had undertaken to indemnify Sutherland & Co. ills, tarp against loss resulting from defendant's negligence in the exeScers,

cution of the work, this would have been valid, for this much .., 1 the city is bound by law, independent of any contract pro

vision; but instead of limiting the city's obligation, as fixed hich the by law, the board, by contract, attempted to make it liable

for what, in the absence of such a contract, it is not pretended it could have been held liable.

"The inhabitants of the city of Nashville—those people who live within the corporate limits-are its corporators. Their liability as well as their rights are fixed by law, and no more can the agents of these corporators increase their liabilities than they can deprive them of their rights.

"The legislature of the state has deemed it a wise policy to charge municipal corporations with a certain liability. All who deal with these corporations are bound to know the extent of this liability; and when the corporation's agents exceed it, they may be guilty of a personal wrong, but 347 cannot subject the corporation they represent to damages on that account."

For the errors indicated, the judgment must be reversed, and the case remanded for a new trialDefendants in error will pay costs of this court.

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MUNICIPAL CORPORATION-ULTRA VIRKS ACTS ARE VOID: Bissell v. Kan. bakee

, 64 III. 249; 16 Am. Rep. 554; Spitzer v. Blanchard, 82 Mich. 235; Zeltman v. San Francisco, 20 Cal. 96; 81 Am. Deo. 96, and extended noto; Clark v. Des Moines, 19 Ia. 199; 87 Am. Dec. 423, and noto; Hasbrouck v. Milwaukee, 13 Wis. 37; 80 Am. Dec. 718, and note. The doctrine of ultra véres is applied with greater strictness to municipal bodies than to private corporations, and in general a municipal corporation is not estopped from denying the validify of a contract made by its officers when there has been no authority for making such a contract: Newbery v. Fox, 37 Mion. 141; 8 Am. 86. Rep. 830. A contract made by a municipal corporation, although widra tires, is not illegal if not prohibited by its charter: 86 Lovis v. David. WR, 102 Mo. 149; 22 Am. St. Rep. 764, and noto.

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