125 Cal. 119, S. F. 1012, Berka v. Woodward

Docket Nº:S. F. 1012
Citation:125 Cal. 119, 57 P. 777
Opinion Judge:HENSHAW, Judge.
Party Name:F. BERKA, Respondent, v. J. G. WOODWARD, Treasurer of the City of Santa Rosa, Appellant
Attorney:O. O. Webber, City Attorney, and J. Leppo, for Appellant. D. R. Gale, and Campbell & Campbell, for Respondent.
Judge Panel:JUDGES: Henshaw, J. Temple, J., and McFarland, J., concurred.
Case Date:June 17, 1899
Court:Supreme Court of California
 
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Page 119

125 Cal. 119

57 P. 777

F. BERKA, Respondent,

v.

J. G. WOODWARD, Treasurer of the City of Santa Rosa, Appellant

S. F. No. 1012

Supreme Court of California

June 17, 1899

Page 120

Department Two

APPEAL from a judgment of the Superior Court of Sonoma County. S. K. Dougherty, Judge.

COUNSEL:

O. O. Webber, City Attorney, and J. Leppo, for Appellant.

The contracts upon which the warrants were based were illegal and void, and no recovery could be had thereunder. (Stats. 1875-76, pp. 255, 256; Pol. Code, secs. 920, 921; Pen. Code, sec. 71; Civ. Code, secs. 1607, 1608, 1667; Fowler v. Scully , 72 Pa. St. 456; 13 Am. Rep. 708; Brooks v. Cooper , 50 N. J. Eq. 761; 35 Am. St. Rep. 801, 802; Swanger v. Mayberry , 59 Cal. 93, 94; Santa Clara Mill etc. Co. v. Hayes , 76 Cal. 390; 1 Am. St. Rep. 211; Gardner v. Tatum , 81 Cal. 373; Morrill v. Nightingale , 93 Cal. 458; Visalia etc. Co. v. Sims , 104 Cal. 332; 43 Am. St. Rep. 105; Wyman v. Moore , 103 Cal. 214; Capron v. Hitchcock , 98 Cal. 430; Alexander v. Johnson , 144 Ind. 82; Winchester etc. Light Co. v. Veal , 145 Ind. 506; Woods v. Armstrong , 54 Ala. 150; 25 Am. Rep. 671.) In case of a municipal corporation there can be no waiver of the illegality of a contract therewith, by virtue of a public law. (Civ. Code, sec. 3513; Fowler v. Scully, supra ; Mullan v. State , 114 Cal. 587.)

D. R. Gale, and Campbell & Campbell, for Respondent.

Plaintiff had the right to recover upon an implied contract. The party receiving the benefit, though the contract was illegal, is held to accountability upon an implied promise to prevent a failure of justice. (Concordia v. Hagerman, 1 Kan. App. 35; Gardner v. Butler , 30 N. J. Eq. 702; Spearman v. Texarcana , 58 Ark. 348; Pickett v. School Dist ., 25 Wis. 551, 558; 3 Am. Rep. 105; Call Pub. Co. v. Lincoln, 29 Neb. 149; Mayor v. Muzzy , 33 Mich. 61; 20 Am. Rep. 670; Mayor v. Huff , 60 Ga. 221; Marsh v. Fulton Co ., 10 Wall. 676, 684; Louisiana v. Wood , 102 U.S. 294; Pimental v. San Francisco , 21 Cal. 362; Swift v. Swift , 46 Cal. 266; McConoughey v. Jackson , 101 Cal. 265; 40 Am. St. Rep. 53; Capitol Gas Co. v. Young , 109 Cal. 140; Hitchcock v. Galveston , 96 U.S. 350; Chapman v. Douglass Co ., 107 U.S. 356; Crompton v. Zabriskie , 101 U.S. 601; Parkersburg v. Brown , 106 U.S. 487; Ashhurst's Appeal , 60 Pa. St. 290.)

JUDGES: Henshaw, J. Temple, J., and McFarland, J., concurred.

OPINION

HENSHAW, Judge.

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This is an appeal from a judgment in mandate ordering the treasurer of the city of Santa Rosa to honor and to pay two warrants issued in favor of plaintiff by the common council of the city. The warrants were in payment of lumber and materials "had and received by the city from Berka." At the times when the material was supplied, at the times when Berka presented his bills and demands for payment, and at the time when the city council allowed and approved his claims, Berka was an officer of the city and a member of its common council. These facts appear by the petition. The defendant interposed a demurrer, both general and special. This demurrer was "overruled without leave to answer," and a peremptory writ of mandate was ordered to be issued.

The question of first importance presented upon this appeal is that of the right of an officer of the city to recover upon an implied contract with the municipality. The following provisions of the law, and of the charter of the city of Santa Rosa, have direct bearing upon this consideration:

" No councilman to be directly or indirectly interested in any contract made by them, or in any pay for work done under their direction or supervision." (Charter of Santa Rosa, Stats. 1875-76, p. 255.)

" All bills, claims, and demands against the city shall be. .. filed by the city clerk, who shall present it to the council, and they shall allow or reject the same in whole or in part." (Charter of Santa Rosa, Stats. 1875-76, p. 251.)

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" Members of the legislature, state, county, city, and township officers must not be interested in any contract made by them in their official capacity, or by any body or board of which they are members." (Pol. Code, sec. 920.)

" State, county, township, and city officers must not be [57 P. 778] purchasers at any sale, nor vendors at any purchase made by them in their official capacity." (Pol. Code, sec. 921.)

" Every contract made in violation of any of the provisions of the two preceding sections may be avoided at the instance of any party except the officer interested therein." (Pol. Code, sec. 922.)

" Every officer or person prohibited by the laws of this state from making or being interested in contracts, or from becoming a vendor or purchaser at sales, or from purchasing script or other evidence of indebtedness, who violates any of the provisions of such laws, is punishable by a fine of not more than one thousand dollars, or by imprisonment in the state prison not more than five years, and is forever disqualified from any office in this state." (Pen. Code, sec. 71.)

" That is not lawful which is: 1. Contrary to an express provision of law; 2. Contrary to the policy of express law, though not expressly prohibited; or, 3. Otherwise contrary to good morals." (Civ. Code, sec. 1667.)

" The consideration of a contract must be lawful within the meaning of section 1667." (Civ. Code, sec. 1607.)

" If any part of a single consideration for one or more objects, or of several considerations for a single object, is unlawful, the entire contract is void." (Civ. Code, sec. 1608.)

It would seem that the need of discussion is foreclosed by the mere quotation of our express laws, but respondent contends, and in his contention prevailed in the trial court, that these provisions have no application to an implied contract such as this admittedly is, and that in the case of implied contracts which are not malum in se, even though they may be against public policy, the rule is, that if the consideration has passed -- if the contract upon the one hand has been wholly executed -- the party who has so performed will be allowed a recovery upon quantum meruit or quantum valebat, as the case may be. The importance of this question, the right of an officer of the city to

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recover upon an implied contract with his municipality, its gravity and far-reaching consequence, demand something more than a passing consideration.

By subdivision 1 of section 1667 of the Civil Code reference is had to contracts expressly prohibited. These will be discussed hereafter. Within subdivisions 2 and 3 of the same section are embraced the multitude of contracts which, though not expressly prohibited, are refused recognition upon grounds of public policy. These contracts, in contemplation of their subject matter, may be divided into two distinct classes; the first where the consideration is base and against good morals, malum in se; the second, where the consideration is in itself lawful, but where the mode is unauthorized, or where, because of some fiduciary relation between the parties, the law will not permit the contract to be made, nor countenance it when made. As to the first it is said in Blatchford v. Preston, 8 Term Rep. 95: "A plaintiff cannot recover in a court of justice whose cause of action arises out of a contract between him and the defendant in fraud or to the prejudice of third persons." Of the second, Lord Mansfield and the court of King's bench, in Jones v. Randall, Cowp. 39, declared: "Many contracts which are not against morality are still void as being against the maxims of sound policy." The first class of contracts embraces the infinite number of those made to further crime, or to interfere with the administration of the law, or to obstruct the course of justice, all contracts affecting the rights and prerogatives of the government, as well as the personal rights of the citizen. In the second class no baseness is inherent in the essence of the contract, but there is either some defect in the mode of creation or the manner of performance, or some incapacity in one or the other of the parties because of nonage, mental disability, or the fiduciary relation which they sustain to each other. Within this second class, as has been said, are the contracts of one who stands in a fiduciary relation to another with that other. Because of the tendency to abuse, the temptation to take undue advantage, these contracts, even when not expressly prohibited by law, are still looked upon with disfavor, and they may be avoided at the instance of the other party in interest; but, where the trustee or other fiduciary agent has fully carried out

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the terms of the contract,...

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