Gutta Percha & Rubber Manufacturing Company v. Village of Ogalalla

• Decision Date: 05 June 1894
• Docket Number: 5396
• Citation: 59 N.W. 513,40 Neb. 775
• Parties: GUTTA PERCHA & RUBBER MANUFACTURING COMPANY v. VILLAGE OF OGALALLA
• Court: Nebraska Supreme Court

59 N.W. 513

40 Neb. 775

GUTTA PERCHA & RUBBER MANUFACTURING COMPANY v. VILLAGE OF OGALALLA

No. 5396

Supreme Court of Nebraska

June 5, 1894

ERROR from the district court of Keith county. Tried below before CHURCH, J.

AFFIRMED.

J. R Brotherton and Tibbets, Morey & Ferris, for plaintiff in error:

Defendant in error cannot repudiate its contract after receiving the benefits thereof, and the court erred in refusing to admit testimony to prove that the city received the benefit of the property purchased. (Clark v. Dayton, 6 Neb. 193; Follmer v. Nuckolls County, 6 Neb. 213; Grand Island Gas Co. v. West, 28 Neb. 852; Ward v. Town of Forest Grove, 25 P. [Ore.], 1020; San Francisco Gas Co. v. City of San Francisco, 9 Cal., 469; Fister v La Rue, 15 Barb. [N. Y.], 323; Tyler v. Trustees of Tualation Academy, 14 Ore., 485; Pixley v. Western P. R. Co., 33 Cal. 183; City of Cincinnati v Cameron, 33 Ohio St. 336; Brown v. City of Atchison, 39 Kan. 37; Columbus Waterworks Co. v. City of Columbus, 29 P. [Kan.], 762.)

Contracts openly made by the officers of a corporation and within the knowledge of the incorporators, who have acquiesced in and received the value of them, are binding upon the corporation, although not expressly authorized in its charter. (1 Dillon, Municipal Corporation [4th ed. ], sec. 444; Pennsylvania R. Co. v. St. Louis, A. & T. H. R. Co., 118 U.S. 290; Boone, Law of Corporations, sec. 101; Whitney Arms Co. v. Barlow, 63 N.Y. 62; Darst v. Gale, 83 Ill. 136; Zottman v. City of San Francisco, 20 Cal. 96.)

The principal cannot avail himself of the benefits of the act and repudiate its obligations. This rule applies as well to corporations as to individuals. (Leggett v. New Jersey Manufacturing & Banking Co., 1 Sax. Ch. [N. J.], 541; Frankfort & Shelbyville Turnpike Co. v. Churchill, 6 T. B. Mon. [Ky.], 427; Mechem, Agency, sec. 167.)

Grimes & Wilcox, also for plaintiff in error.

Albert Muldoon and John J. Halligan, contra, contending that the contract was ultra vires, that the board of trustees could not ratify the contract so as to make it binding against the village by accepting and using the goods, and that the village was not estopped to plead ultra vires, cited: Consolidated Statutes, sec. 2912; Dillon, Municipal Corporations [4th ed.], secs. 130, 444, 457, 461, 462, 936; Nash v. City of St. Paul, 11 Minn. 110; Brady v. Mayor of City of New York, 20 N.Y. 312; City of Bryan v. Page, 51 Tex. 532; San Diego Water Co. v. City of San Diego, 59 Cal. 517; People v. May, 9 Col., 81; Mosher v. Independent School District of Ackley, 44 Iowa 122; McDonald v. Mayor of City of New York, 68 N.Y. 23; City of Blair v. Lantry, 21 Neb. 253; National State Bank of Mt. Pleasant v. Independent District of Marshall, 39 Iowa 490; French v. City of Burlington, 42 Iowa 614; Powell v. City of Madison, 107 Ind. 106; Law v. People, 87 Ill. 385; Agawam Nat. Bank v. South Hadley, 128 Mass. 503; Burrill v. City of Boston, 2 Clif. C. C. [U.S.], 590; Litchfield v. Ballou, 114 U.S. 190.

OPINION

See opinion for statement of the case.

POST, J.

This was an action by the plaintiff in error against the defendant in error in the district court of Keith county to recover the price of certain hose, hose carts, reels, ladders, and other apparatus of like character in common use by town and village fire companies. It is alleged that said property was sold and delivered to the defendant, at its request, on the 29th day of April, 1887, for the agreed price of $ 569, and for which amount judgment was demanded. An answer was interposed, in which it was alleged, in substance, that although the board of trustees of the defendant village entered into an agreement to purchase from the plaintiff the property mentioned in the petition and for the price therein stated said agreement is void, for the reason that no appropriation had previously been made for the purchase of said property, or that was available for said purpose; and that during the municipal years of 1885 and 1886 and 1886 and 1887 said village had made no appropriation, by ordinance, resolution, or otherwise, for the defraying of any part of the expenses thereof, and that said defendant never received or appropriated said property or otherwise ratified said agreement. The reply was, in substance, a general denial of the allegations of the answer. The provision of statute relied upon by the defendant is section 89 of chapter 14, Compiled Statutes, entitled "Cities of the Second Class and Villages," which reads as follows: "No contract shall be hereafter made by the city council or board of trustees, or any committee or member thereof; and no expense shall be incurred by any of the officers or departments of the corporation, whether the object of the expenditure shall have been ordered by the city council or board of trustees or not, unless an appropriation shall have been previously made concerning such expense, except as herein otherwise expressly provided." The evidence introduced at the trial fully sustains the allegations of the answer as to the failure of the village to make an appropriation available for the payment of the plaintiff's claim, whereupon the latter offered to prove by witnesses present that the village had received the property in controversy, paying the freight thereon, and had used in continuously since that time. That offer was rejected on the objection of the defendant village, and a verdict of no cause of action returned under the direction of the court. Judgment was subsequently entered upon the verdict, whereupon the cause was removed to this court by the petition in error of the plaintiff company.

There is practically but one question for consideration, and which is fairly presented by the offer and ruling above named. In this connection it should be remarked that no claim is made that this case is within any of the exceptions contemplated by the statute quoted. The cases bearing upon the question of the power of municipal corporations to ratify their unauthorized contracts are confusing and apparently irreconcilable. It would subserve no useful purpose to examine them at length in this connection or to attempt a statement of the grounds upon which they rest. It is sufficient that there is one principle which seems to run through them all, viz.: If a contract is invalid when made because in violation of some mandatory requirement of statute, it will be deemed ultra vires, and can be ratified only upon the conditions essential to a valid agreement in the first instance; but where the formalities prescribed or conditions imposed are not intended as a restriction upon the corporate power, a binding ratification may be made in a different mode. (Town of Durango v. Pennington, 8 Colo. 257, 7 P. 14; McCracken v. City of San Francisco, 16 Cal. 591; San Diego Water Co. v. City of San Diego, 59 Cal. 517; Cory v. Freeholders of Somerset, 44 N.J.L. 445; Keeney v. Jersey City, 47 N.J.L. 449, 1 A. 511; Newman v. City of Emporia, 32 Kan. 456, 4 P. 815; McBrian v. City of Grand Rapids, 56 Mich. 95, 22 N.W. 206; McDonald...