City of Phoenix v. Kidd

Decision Date02 October 1939
Docket NumberCiv. 4090
PartiesCITY OF PHOENIX, a Municipal Corporation, Appellant, v. R. F. KIDD, Appellee
CourtArizona Supreme Court

APPEAL from a judgment of the Superior Court of the County of Maricopa. M. T. Phelps, Judge.

(For former opinion, see ante, p. 75, 92 P.2d 513.) On motion for rehearing. Motion granted.

Mr Hess Seaman, City Attorney, Mr. Wm. C. Fields, and Mr. Eli Gorodezky, his Assistants, for Appellant.

Mr. J S. Wheeler, for Appellee.

OPINION

LOCKWOOD, J.

The appellee in this case has filed a motion for rehearing. So far as the questions raised by this motion have been considered and determined by us in our original opinion, we see no reason to change our view of the law. There are however, several questions raised by the motions in this and its companion cases (City of Phoenix v. R.D Price, (Ariz.) 94 P.2d 433; City of Phoenix v. Arnold Enriquez, (Ariz.) 94 P.2d 434; City of Phoenix v. Harvey T. Wilson, (Ariz.) 94 P.2d 434), which were not suggested in the original briefs filed in this court and apparently were neither raised, litigated nor considered in the trial court.

For many years our rule was that we would not consider on an appeal any question which had not previously been considered and passed on by the trial court, and that cases must be presented before us on the same theory on which they were litigated in that court. Tevis v. Ryan, 13 Ariz. 120, 108 P. 461. However, in the case of Munger v. Boardman, 53 Ariz. 271, 88 P.2d 536, the court departed from its previous rule and held, in substance, that where the record showed in any manner that there was an issue which, if it had been properly litigated in the lower court, should and would have disposed of the action, we would consider and determine the appeal on it, notwithstanding it had not been called to the attention of either the trial or appellate court by the parties and did not correlate with the theory on which the case had been tried. If we are to adhere to that doctrine, (and the majority of the court is of the opinion that we should), both logic and justice would require that when such an issue is suggested, even on a motion for a rehearing, we should consider it and take such action as may be appropriate in the premises.

In our original opinion, we held that the budget law and the minimum wage law were not in any manner in conflict, but could and should be construed together. The effect of that construction was that the minimum wage law applied to all labor performed for a municipality until its budget was exhausted, but that thereafter any attempt on the part of the municipal officials to incur further liability on behalf of the municipality for labor, was void ab initio, and no recovery could be had by the parties furnishing such labor. We further held that this rule applied to the so-called "home-rule" municipalities in the same manner as to every other municipal corporation, and that the issue of estoppel could not be raised either by the municipality or by those furnishing labor to it under the circumstances set forth in the pleadings and stipulation on which this case was tried. We reaffirm the rules thus laid down and, therefore, need not discuss any of the new points raised on the motion for rehearing which question these principles.

There are, however, several new grounds on which the appellee contends, that admitting these principles correctly state the law, judgment should have been rendered in his favor because of certain facts appearing from the record, even though they were not pertinent to the theory on which the case was first presented. We shall consider and discuss these matters.

The principal question raised by them is when and under what circumstances the budget of appellant involved herein was exhausted. The first contention of appellee is, in substance, that even though the amount specifically budgeted for the wages involved in the present action was exhausted, the municipality nevertheless had many other funds budgeted for different purposes, and that if any surplus was left over from any of these funds, and particularly from what is known as the contingent fund, the budget out of which the wages sued for were originally intended to be paid was not, as a matter of law, exhausted until all of these surpluses had also been applied to the payment of such wages.

We had an analogous question before us in the case of Batterton v. Pima County, 34 Ariz. 347, 271 P. 720, 724. Therein we said:

"By its terms, where a county has funds actually on hand at the time the budget is adopted, not the proceeds of current taxes proposed by the budget, it is not prohibited from incurring extra obligations and liabilities not set forth in the budget to the extent of such funds, if such obligations are otherwise authorized by law." (Italics ours.)

We think the corollary to be drawn from this statement is that surplus funds on hand at the end of any fiscal year may not be used to pay deficits in other funds budgeted for at the beginning of such year, but may be carried over and used during the ensuing year for purposes authorized by law for which no budget estimate is made during that year. If surpluses in one fund may be used to pay deficits incurred in another fund, since it cannot be definitely known until the end of the fiscal year whether there will be a surplus in any particular fund or not, one desiring to furnish labor or material to a municipal corporation could never ascertain at the time he furnished them whether the contract was legal or not. We hold, therefore, following the reasoning of the Batterton case, that surpluses from any particular budgeted fund cannot be used to pay liabilities which should be charged to another budgeted fund for the current year, but may be carried over and used in the succeeding year for any purpose authorized by law, whether budgeted or not.

As we have stated repeatedly, the purpose of the budget law is not to aid the officials who manage the municipal government, nor the creditors who deal with it, but to protect the taxpayers, who are required in the end to foot the bill, from any liability incurred without their previous knowledge. This is done by the statutory provision that after the budget is made no indebtedness can be incurred in excess of the amount specifically budgeted for that express purpose, unless the funds to pay it are on hand at the beginning of the fiscal year as an unencumbered carry-over from the preceding year.

When then does a budget become exhausted? Is it when the money set up in the budget is actually paid out to the creditors for purposes which the budget covers, or when obligations to pay therefrom are incurred in an amount equaling the total budget? We think there can be no question that it is the latter, for it is only in such case that the creditor is able to determine whether he may safely furnish goods or labor. Suppose, for illustration, the municipality has budgeted ten thousand dollars for the purchase of fire apparatus. It enters into a contract to purchase an engine for ten thousand dollars, of which one thousand is to be paid in cash and the other nine thousand at the end of six months. If we are to hold that the budget is only depleted by the sum of one thousand dollars at the time the contract is made, and the nine thousand dollars is not to be charged until it is actually paid, it is obvious that a situation might arise where the creditor, who in good faith had dealt with a municipality knowing that it had funds on hand to pay its debts, might find himself unable to collect a debt apparently valid when it was made, while a creditor, who had three months later sold another engine for nine thousand dollars cash, had been paid in full. If, on the other hand, as soon as an obligation has been incurred by a municipality, the budget is considered as encumbered to the full extent of the legal obligation, regardless of when the actual payment is to be made, all those dealing with the municipality in the future may ascertain definitely whether funds will be available to meet obligations in their favor.

Applying this principle, it is apparent that when the appellant entered into contracts of employment with the various employees, and they had performed work for it up to their first payday, it was then indebted to them in the amount fixed by the minimum wage law. The record shows that this full amount was not paid. But under the principles above set forth, the amount unpaid and due was an encumbrance upon the budget superior in rank to any indebtedness arising at a later date, and the mere fact that it had not been paid in cash did not alter this. It is obvious that under the record in this case a time would come before the end of the fiscal year when the amount actually paid from the budgeted fund involved in the present controversy, plus the amount which should have been paid under the minimum wage law, would equal the total amount budgeted, and it was at that point, as a matter of law, that the budget was exhausted, and any attempted future liability for labor which must be paid out of the fund in question was null and void. Each of the employees in this case, therefore had due to him at the time of the exhaustion of the budget the difference between the amount which he had been paid and the amount which he should have been paid. The record fails to show precisely at what time the budget was exhausted under this rule, and the only way in which the exact amount due each of the employees can be determined is by going back over the payrolls of the municipality for the entire fiscal year and calculating the amount which should have been paid for the labor performed, at the rate fixed by the minimum wage law,...

To continue reading

Request your trial
9 cases
  • Coleman v. Kansas City
    • United States
    • Missouri Supreme Court
    • 7 Junio 1943
    ...v. Buchanan County, 346 Mo. 599, 142 S.W. (2d) 665; City of Sand Springs v. Kraus, 181 Okla. 6, 72 Pac. (2d) 726; City of Phoenix v. Kidd, 54 Ariz. 123, 94 Pac. (2d) 428; Nodaway County v. Kidder, 344 Mo. 75, 129 S.W. (2d) 857. (2) The assignors herein, and the employees, as a whole, by the......
  • Coleman v. Kansas City
    • United States
    • Missouri Supreme Court
    • 7 Junio 1943
    ... ... Buchanan ... County, 346 Mo. 599, 142 S.W.2d 665; City of Sand ... Springs v. Kraus, 181 Okla. 6, 72 P.2d 726; City of ... Phoenix v. Kidd, 54 Ariz. 123, 94 P.2d 428; Nodaway ... County v. Kidder, 344 Mo. 75, 129 S.W.2d 857. (2) The ... assignors herein, and the employees, ... ...
  • Lockwood v. Board of Sup'rs of Maricopa County
    • United States
    • Arizona Supreme Court
    • 8 Mayo 1956
    ...of the many cases so holding, viz.: Bank of Lowell v. Cox, supra; City of Phoenix v. Kidd, 54 Ariz. 75, 92 P.2d 513, on rehearing 54 Ariz. 123, 94 P.2d 428; McDonald v. Frohmiller, 63 Ariz. 479, 163 P.2d 671, 164 A.L.R. 922; Hunt v. Norton, 68 Ariz. 1, 198 P.2d 124, 5 A.L.R.2d 668; Brown v.......
  • Parrack v. City of Phoenix, 6640
    • United States
    • Arizona Supreme Court
    • 24 Junio 1959
    ...the State of Arizona and its effect on home rule or charter cities has been considered by this court on many occasions. City of Phoenix v. Kidd, 54 Ariz. 123, 94 P.2d 428; City of Tucson v. Tucson Sunshine Climate Club, 64 Ariz. 1, 164 P.2d 598. The record does affirmatively show that the p......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT