City of Northport v. Northport Town Site Co.

• Decision Date: 10 March 1902
• Citation: 27 Wash. 543,68 P. 204
• Court: Washington Supreme Court
• Parties: CITY OF NORTHPORT v. NORTHPORT TOWN SITE CO.

68 P. 204

27 Wash. 543

CITY OF NORTHPORT v. NORTHPORT TOWN SITE CO.

Supreme Court of Washington

March 10, 1902

Appeal from superior court, Stevens county; William E. Richardson Judge.

Proceedings by the city of Northport against the Northport Town Site Company to enforce a local assessment. From a judgment in favor of plaintiff, defendant appeals. Reversed.

C. S. Voorhees, Reese H. Voorhees, and D. H Carey, for appellant.

J. C Harkness and J. A. Kellogg, for respondent.

REAVIS C.J.

Suit by plaintiff city to enforce a local assessment lien levied for sidewalk improvements along certain streets in the city of Northport. The local assessments seem to have been duly levied for the improvements made, and upon the abutting property owned by the defendant. The complaint sets out the facts showing the regularity of the proceedings and the validity of the assessment, and demands the foreclosure of the assessment lien. The answer does not deny the regularity of the assessment, but, for defense, alleges that a member of the city council (W. S. Rose) was interested in the contract for the improvement made between the city and the contractor A. K. Ogilvie. Judgment was for the plaintiff.

The court, among other things, found that there was no agreement or understanding existing between the said A. K. Ogilvie, when the contract for the improvements hereinbefore set forth was awarded by the city council of plaintiff city, and W. S. Rose, that the profits arising from said contract should be divided between the said Ogilvie and the said Rose, and, further, that there was no agreement or understanding between the said Ogilvie and the said Rose whereby the said Rose was or became interested, directly or indirectly, in the contract entered into between plaintiff city herein and the said A. K. Ogilvie, and that there was no agreement or understanding between the said A. K. Ogilvie and the said W. S. Rose that, in the event of the contract hereinbefore referred to being awarded to the said A. K. Ogilvie, the said Ogilvie should purchase the lumber to be used in the work done under said contract from the Crown Lumber Company. These findings were excepted to by defendant. The court found, in substance, that there was but one bid made for the construction of the improvements, and but one bid considered before the council, and that Ogilvie was the only bidder; that it was provided in the contract for the payment of Ogilvie that he should accept city warrants in payment for the work; that the council consisted of seven members, one of whom was W. S. Rose; that there were only four members present when the contract was awarded, and that Rose, as one of the four, voted to accept the bid and let the contract to Ogilvie, and that the improvements were made under said contract; that at the time the bid was accepted, and the contract let under which the improvements were made, said W. S. Rose, a member of the council, was the manager of the Crown Lumber Company, a corporation engaged in the lumber business in the city of Northport, and was also a stockholder in such corporation to the extent of 1,600 shares out of a total capital stock of 10,000 shares, and that he was such manager and stockholder for at least four months prior to the execution of the contract with Ogilvie; that there were only two other stockholders in said corporation, and that the three stockholders of the company, including Rose, were desirous of supplying the lumber necessary to be used in making the improvement; that the stockholders, including Rose, met together frequently to discuss the sale of lumber by the corporation to be used in the improvements, and said Rose, as manager of the corporation, did sell for the company to Ogilvie all of the lumber needed for and used in the making of the improvements at a price of $11.60 per thousand feet, being in the aggregate $2,180.26; that said Rose, as manager of the corporation, agreed to and did receive in payment for said lumber from Ogilvie the warrants of the city of Northport issued under the contract for improvements, and received by Ogilvie in payment for said improvements; that the Crown Lumber Company was the only dealer located in the city engaged in the sale of lumber at and prior to the time the contract was executed; that, prior to the bidding for the construction of the improvement, Ogilvie and Rose had at least two conversations relative to the sale of the lumber needed to be used in the improvements, and it was understood and agreed that the Crown Lumber Company would sell lumber to Ogilvie for said improvement in the event Ogilvie's bid should be accepted, and that the lumber company would accept warrants of the plaintiff city from Ogilvie in payment for the lumber, and it was further agreed between Rose and Ogilvie, prior to the bid made by Ogilvie, that the price at which the company should sell the lumber to Ogilvie was $11.60 per thousand, as required for said improvements; that, at the time of the allowance of the claim to Ogilvie for the construction of the improvements under his contract with the plaintiff city, W. S. Rose was still manager of the Crown Lumber Company, and a stockholder therein, as before mentioned, and was a member of the council of the plaintiff city.

Section 968, 1 Ballinger's Ann. Codes & St., relating to municipal contracts, is as follows: 'No officer of such city shall be interested, directly or indirectly, in any contract with such city, or with any of the officers thereof, in their official capacity, or in doing any work or furnishing any supplies for the use of such city or its officers in their official capacity; and any claim for compensation for work done, or supplies or materials furnished, in which any such officer is interested, shall be void, and if audited and allowed, shall not be paid by the treasurer. Any wilful violation of the provisions of this section shall be a ground for removal from office, and shall be deemed a misdemeanor, and punished as such.' In view of the issue presented by the defense as stated in the answer, it is not material to specially review the findings of fact excepted to by the defendant. The evidence has been examined, and we are satisfied that the findings of fact made by the superior court negativing any interest of Councilman Rose in the contract for the local improvement cannot be approved. The salient fact mentioned, and found by the court that Rose, while a member of...