Austin Western Road Mach. Co. v. City of New Madrid

• Decision Date: 15 February 1945
• Docket Number: No. 6500.,6500.
• Parties: AUSTIN WESTERN ROAD MACHINERY CO. v. CITY OF NEW MADRID.
• Court: Missouri Court of Appeals

185 S.W.2d 850

AUSTIN WESTERN ROAD MACHINERY CO. v. CITY OF NEW MADRID.

No. 6500.

Springfield Court of Appeals. Missouri.

February 15, 1945.

Rehearing Denied March 3, 1945.

Appeal from Circuit Court, New Madrid County; Louis H. Schult, Judge.

"Not to be published in State Reports".

Action by Austin Western Road Machinery Company against City of New Madrid to recover balance due on contract for a road grader. From a judgment for defendant, the plaintiff appeals.

Reversed and remanded with directions.

Edward F. Sharp, of New Madrid, for appellant.

R. F. Baynes, of New Madrid, for respondent.

VANDEVENTER, Judge.

On the 5th day of August, 1938, the appellant brought this suit in the circuit court of New Madrid County against the City of New Madrid. The petition alleges that on March 4, 1929, the appellant sold to the respondent a certain road grader for the price of $3,135; that thereafter the grader was delivered according to the contract, that respondent received, retained and used the same, had made certain payments thereon, but there remained unpaid the sum of $2,151.13, with interest, for which demand had been made and for which appellant prayed judgment.

The defendant's answer contained (1) a general denial; (2) a further defense that the contract, if entered into, was without authority and void; (3) that if the contract was entered into, it caused respondent to become indebted above the amount of income or revenue provided for the City of New Madrid for the year 1929 and was therefore in violation of Section 12, Article 10 of the Constitution of Missouri, Mo.R.S.A., and (4) that the road grader was not suitable for the purpose for which it was sold "to be used," that plaintiff well knew said fact at the time of the sale and that the amount already paid by respondent was the reasonable value of the property.

No construction of the constitutional provision is called for, but merely its application. The trial court did not decide adversely to respondent and no constitutional right was denied the losing party below. Hence, this court has jurisdiction. Ragsdale v. Brotherhood of Railroad Trainmen, 229 Mo.App. 545, 80 S.W.2d 272; Wolf v. Hartford Fire Ins. Co., 304 Mo. 459, 263 S.W. 846; Mesenbrink v. Boudreau, Mo.App., 171 S.W.2d 728; Brown v. Missouri, K. & T. R. Co., 175 Mo. 185, 74 S.W. 973; State v. Richter, Mo.Sup., 33 S.W.2d 926.

The court appointed a referee to hear and determine all the issues in the cause and report back to the court on both the law and the facts.

The evidence showed that on the 4th day of March, 1929, the following proceedings were had by the Board of Aldermen of the City of New Madrid, and were duly entered upon the records of respondent.

"New Madrid, Mo., March 4th, 1929. The Board of Aldermen of the City of New Madrid, Mo., met this day at 8 o'clock P. M. in the Council Chamber at the City Hall in regular session. Upon roll call there were present: W. R. Pinnell, Mayor, Presiding; Aldermen J. M. Householder, Lee Chrisler, J. W. Newsom and E. H. Riley.

"Absent: Aldermen William Buesching and Wess Sherwood.

"Minutes of last meeting were read and approved.

"Motion made by Alderman Householder, seconded by Alderman Chrisler, that Mayor W. R. Pinnell, sign contract for Austin-Western Grader, equipped with International 10-20 Motor, same to be shipped April 1, 1929, unless otherwise agreed.

"That $400.00 be paid on the above grader within 30 days after same is received, balance to be paid in 5 annual payments with 6% interest, total price $3135.00. Motion carried by unanimous vote.

"Motion made by Alderman Chrisler, seconded by Alderman Householder that Board adjourn. Motion carried. Board adjourns.

                "Attest:                       Approved
                    "City Clerk                Mayor."
                

Pursuant to this entry, the Mayor of New Madrid, W. R. Pinnell, executed the following document:

                               "Original
                         General Order Form
                                  To
                The Austin-Western Road Machinery Co
                               Chicago
                $3135.00               New Madrid, Mo
                                       3/4/1929
                

"Please ship to W. R. Pinnell, City Mayor at New Madrid, County of New Madrid, State of Missouri, on April 1st, 1929, via Cotton Belt R. R. unless otherwise notified. (1) One Austin I. H. C. 10-20 Motor Grader less Cab but with leaning front wheels and front scarifier. Single drive machine with rubber tires all around.

"For which we agree to pay the Austin-Western Road Machinery Co., or order Thirty-one hundred and thirty-five & 00/100 ($3135.00) as follows: ($400.00) Four Hundred in cash within 30 days from delivery and notes as follows: One note of $547.00 due May 1st, 1930, and one note of the same amount due the same Date of each year thereafter until all is paid in full. All bearing 6 per cent interest from date; settlements in accordance with above to be made at the time of receipt of goods.

"The above goods are warranted to be thoroughly made of good material and workmanship, and the Austin-Western Road Machinery Co. hereby agrees to replace free of charge F. O. B. factory any parts of said machinery which may break within six months of date hereof through fault of material or construction upon receipt of satisfactory evidence of such breakage. Broken parts to be returned prepaid if requested.

"The Austin-Western Road Machinery Co. shall retain the ownership of and title to the above machinery covered by this order until all has been paid for in cash and until all notes given in part payment for said machinery and renewals thereof, have been fully paid in cash. If any note given in part payment hereof shall not be paid in full at its maturity; all other notes or obligations given in part payments hereof shall at once become due and the said The Austin-Western Road Machinery Co. shall have the right to take possession of said machinery wheresoever it may be situated.

"It is also further understood, that this contract embodies the entire understanding, is not affected by any verbal representations or agreements and is not subject to countermand.

"Signed on behalf of and to be charged to City of New Madrid, Mo.

                  "(Signed)         W. R. Pinnell, Mayor."
                

"Send invoice to W. R. Pinnell, Mayor, P. O. New Madrid, Mo."

Marginal entries: "Order taken by George D. Steel. Credit Frank Batchelor. D-4472, D-4472, D-4472, D-4472."

The Board of Aldermen authorized the payment of $400 according to the terms of the contract, made one payment of $547, made two other payments aggregating $443.47, leaving unpaid the amount sued for, with interest. The five payments of $547 each were evidenced by notes due on May 1 of each of the following years, 1930, 1931, 1932, 1933, 1934. Two of these notes were not paid when due and on May 11, 1932, the following appears of record in the record book of the City of New Madrid: "Motion made by Alderman Allen, seconded by Alderman Riley that Mayor Hunter be and is authorized to sign four notes in the sum of $648.65 in lieu of notes given the Austin-Western Machinery Co. Dated June 15, 1928. Motion carried."

These notes, also, were never paid. As to the evidence of the contract, the mayor's authority for entering into it, the delivery, use and retention of the grader, the amount paid and the amount remaining due, there is little, if any, controversy. Defendant offered no evidence.

On the 5th day of September, 1942, the referee made his report, finding for the respondent. The referee found the law to be that the mayor had no authority to enter into the contract with the appellant on the behalf of the City of New Madrid and that the contract entered into with appellant was in violation of Section 12, Article 10 of the Constitution of Missouri, in that said contracted price exceeded the provided income and revenue for the year 1929. Upon a hearing the court entered judgment in accordance with the report of the referee and it is from that judgment that this appeal was taken.

As we view it, two questions are involved. (1) Did the mayor have legal authority to enter into the contract, and (2) did the instrument executed by him with appellant obligate the respondent to make payments in excess of its provided revenue or income for the year 1929? The evidence on the last proposition we will discuss later in this opinion.

Respondent has cited numerous authorities upon the proposition that the record entry attempting to authorize the mayor to enter into the contract is insufficient. We have read all of these cases and most of them may be grouped, from a factual standpoint, as follows:

1. Those where a statute specifically required the passage of an ordinance and none was passed.

2. Those where there was oral authorization and no record of any kind.

3. Those where the record was so general as to amount to no record.

4. Those where the record authorized one thing and something else was done.

Each of these cases must be read in the light of the facts involved. None of them was based on facts like those involved in the case before us. The general rule as to the sufficiency of authority to an agent to bind the municipality by contract is stated in McQuillin on Municipal Corporations, 2d Ed.: "If power is conferred on a municipal corporation by statute and the law is silent as to the mode of exercising such power, the corporate authorities are necessarily clothed with a reasonable discretion to determine the manner in which such powers shall be exercised; all the reasonable methods of executing such power are inferred, subject, however, to the limitation that the action taken must be in good faith and neither arbitrary nor capricious. The general presumption obtains, if nothing to the contrary appears, that that which was done was proper and valid. In the absence of any mode prescribed by law, the council may in its discretion, exercise its power in any usual and appropriate manner, or the municipal corporation may prescribe the manner in which its powers may be...