Edwards House Co. v. City of Jackson

• Decision Date: 30 March 1925
• Docket Number: 24395
• Citation: 138 Miss. 644,103 So. 428
• Court: Mississippi Supreme Court
• Parties: EDWARDS HOUSE CO. v. CITY OF JACKSON. [*]

103 So. 428

138 Miss. 644

EDWARDS HOUSE CO. v. CITY OF JACKSON. ^[*]

No. 24395

Supreme Court of Mississippi

March 30, 1925

(En Banc.)

MUNICIPAL CORPORATIONS. Void contract for acquisition of land for street held not to create implied contract to pay for use.

Where contract of city to purchase land for a street was void under statute (Laws 1920, chapter 326, Section 1, amending Laws 1918, chapter 209, Section 3), as to incurring indebtedness and alternative provision to annually pay a certain amount for its use was void because no statute authorized the city to lease property for a street, the city is not liable on an implied contract for reasonable value of the use and damages to the land from such use.

ANDERSON J., dissenting.

HON. W H. POTTER, Judge.

APPEAL from circuit court of Hinds county, HON. W. H. POTTER, Judge.

Action by the Edwards House Company against the city of Jackson. From judgment for defendant, plaintiff appeals. Affirmed.

Judgment affirmed.

Green Green & Potter, for appellant.

This is an appeal from the circuit court of Hinds county wherein a demurrer was sustained to the declaration. Plaintiff owned a certain tract of land particularly described in the declaration, and upon April 7, plaintiff and the city of Jackson made a contract whereunder the said city sought to acquire the land which contract was adjudged void by reason of want of power in the city to make it. See 96 So. 170.

Plaintiff being the owner, and in possession, the city of Jackson entered upon and took possession of said property upon the 7th day of April, 1920, and thereover laid its curbs and gutters and then and there dug up and removed from said street large quantities of earth, and deposited thereon gravel for the benefit of the public, and thereover the city did exercise, to the exclusion of plaintiff, full title claiming the said property under the contract and excluding the plaintiff from any use thereof as owner.

The reasonable value of the use and occupation enjoyed by the city wherefrom the said plaintiff was excluded was, three thousand dollars per year, which was the reasonable rental value of said street during said period, and that said city deprived the plaintiff thereof during said time, whereby it was injured in the sum of nine thousand dollars.

Under the charter of the city of Jackson, it had full jurisdiction as to streets--the same jurisdiction possessed by the board of supervisors over roads, ferries and bridges, so that integrated into the definition of the power of the city is the admeasurement made of the power of the board of supervisors. Board v. Arrighi, 54 Miss. 668; Paxton v. Baum, 59 Miss. 531.

Therefore, with this paramount power, the city entered, took possession of that which belonged to the plaintiff, and thereby deprived the plaintiff thereof, and in so entering advantaged itself thereby to the extent specified in the declaration. Church v. Vicksburg, 50 Miss. 604; Sherman v. Grenada, 51 Miss. 186; Sheldon v. Kalamazoo, 24 Mich. 383; Scott v. Hart, 91 So. 17.

These cases sharply present for consideration the question of liability when a municipality through its mayor and board of aldermen unlawfully take property belonging to another and utilize that property for the benefit of the municipality. Such utilization imposes a responsibility upon the party to respond for the use thus made. Now the question of responsibility in this character of case is directly set forth by this court in Watts v. Buchanan, 92 Miss. 544; Bank v. Bank, 67 So. 96.

Furthermore, under the laws of Mississippi, an estoppel may be created against a municipality. Jackson v. Merchants Bank, 73 So. 574; Surety Co. v. County, 104 Miss. 633.

The city simply enjoyed this parcel of land for its own purpose during the time, with absolute right to appropriate if it saw fit. It is liable for the value of that which was so appropriated during the time of its appropriation. Perkins v. State, 94 So. 463.

W. E. Morse and Walter A. Scott, Jr., for appellee.

I. PERSONS DEALING WITH A MUNICIPALITY MUST TAKE NOTICE. The contract entered into by appellant and the city of Jackson was made in good faith, both parties believing at the time that it was a valid and lawful contract under which the city of Jackson was to acquire the property of the appellant for street purposes. Both parties at the time believed the city had the power to acquire a street in accordance with the terms of the contract. The fact that this view of the law proved erroneous can confer no right on the appellant nor can it create a liability on the part of the appellee. The appellant was presumed by law to know the powers of the municipality with which it was dealing. Edwards Hotel & Ry. Co. v. City of Jackson, 96 Miss. 547, 51 So. 802.

The appellant was presumed to know that the city of Jackson had no power to contract except in pursuance to authority to it by the state of Mississippi, of which it is the creature. Edwards House v. City of Jackson, 99 Miss. 354; Hazlehurst v. Mayes, 96 Miss. 656; Wise v. Yazoo City, 51 So. 453; A. & V. R. R. v. Turner, 52 So. 261; Steitenroth v. City of Jackson, 54 So. 955. The powers of a municipality, if doubtful or ambiguous, are to be resolved against the power, Crittenden v. The Town of Booneville, 92 Miss. 277.

II. IMPLIED CONTRACTS OF A MUNICIPALITY. In view of the fact that appellant is precluded from asserting any right under the void contract, he is now attempting to bring forward an implied contract on which to base his claim for rent and damages. It is our opinion that this cannot be done. The void contract necessarily stands as the basis for this litigation, for it was under the provisions of this contract that the city of Jackson entered the property and converted the same into a street. The court has already held this contract to be void because of lack of power in the city to execute it. If the city of Jackson has no power to execute a written contract entered into with all legal solemnity, it certainly has no power to make an implied contract. If appellant's view of the law is correct, then the city of Jackson can indirectly make a contract which it could not make directly, and this whether or not the contract was against public policy or against a positive, prohibitory statute.

Moreover, we respectfully submit that the supreme court has already ruled on this point in the appellant's motion to correct the judgment in the case of Edwards House Company v. City of Jackson, 96 So. 682. Under section 3, chapter 209, Laws of 1918, as well as under section 6053, Hemingway's Code (sec. 16, ch. 120, Laws of 1920), the city was without power on the face of this record to make a contract to pay the said three thousand dollars and consequently there can be no recovery for said amount under the said contract.

Appellant cites the case of Church v. City of Vicksburg, as authority. It will be noted, however, that in the Church case, the city had the power to purchase brick in the first instance. After purchasing the brick it was legally bound to pay. In the instant case the city of Jackson had no power to contract in the premises.

III. ESTOPPEL BY ULTRA-VIRES CONTRACT. As a corollary to the rule that all persons dealing with a municipality must take notice of its powers, is the rule that a municipality is not estopped by an ultra-vires contract made by its agents. The rule, with reasons therefor, is clearly stated in the case of Edwards House Company v. The City of Jackson, 91 So. 802; 19 R. C. L. 1961; McQuillan on Municipal Corporations, sec. 1172 (3); Dillon on Municipal Corporation, sec. 795.

The chief exceptions to the rule that municipal corporations are not liable on ultra vires contracts, seems to be when money or property is held by the corporation after having received the same under a void contract. It is readily conceded that where money is obtained by a municipality it cannot hold same and plead ultra vires. If it does plead ultra vires, the consideration may be recovered on an implied assumpsit. The same rule holds in the case of property received under an ultra vires and therefore void contract. The city could not at the same time plead ultra vires and retain the property. In such a case the law by appropriate remedy would compel a re-conveyance.

In the instant case, however, the city of Jackson refused to issue a warrant when the first payment was due and at present holds no consideration of the contract. The city of Jackson received the property under the provisions of a contract which was subsequently declared null and void by this court.

IV. LIABILITY OF MUNICIPALITY FOR BENEFITS RECEIVED UNDER CONTRACT MADE IN VIOLATION OF STATUTE. 19 R. C. L. 1064 says: "When the legislature expressly prohibits a municipal corporation from entering into a contract under certain conditions or without complying with certain preliminaries, there can be no recovery on a contract entered into in disregard of the legislative command. Nor can there be any recovery upon an implied contract to pay for the benefits received under such an agreement. When a contract is entered into in violation of a positive rule of law intended for the protection of the taxpayers, such as a requirement that contracts of a certain character shall be given to the lowest bidder, or that the incurrence of an obligation of a certain magnitude shall have the approval of the voters of the municipality, there can be no recovery either upon the contract itself, or upon a quantum meruit."

V. NO LIABILITY FOR USE AND OCCUPATION BASED ON RELATION OF LANDLORD AND TENANT. Section 2374, Hemingway's Code. The above section clearly refers only to a case in which the relation of landlord and tenant exists. Scales v Anderson, 26 Miss. 94. The...