Holmes County, Miss. v. Burton Const. Co.

• Decision Date: 18 June 1920
• Docket Number: 3486.
• Citation: 267 F. 769
• Parties: HOLMES COUNTY, MISS., v. BURTON CONST. CO. et al.
• Court: U.S. Court of Appeals — Fifth Circuit

267 F. 769

HOLMES COUNTY, MISS., v. BURTON CONST. CO. et al.

No. 3486.

United States Court of Appeals, Fifth Circuit.

June 18, 1920

E. F Noel, of Lexington, Miss., and N. T. Currie, Asst. Atty Gen., and James A. Alexander, of Jackson, Miss., for plaintiff in error.

James G. Holmes, of Yazoo City, Miss., for defendants in error.

Before WALKER, Circuit Judge, and CALL and HUTCHESON, District Judges.

HUTCHESON District Judge.

This is a writ of error from a verdict and judgment in favor of the defendants in error, plaintiffs below, who will hereafter be referred to as plaintiffs, against the plaintiff in error hereinafter called the defendant. As correctly stated by the defendant in error in its brief, this is a simple suit on contract, and the rights of the parties must be measured by their contract.

The plaintiffs were road contractors, and the contract out of which this controversy arose was a contract between plaintiffs and defendant for the construction of certain roads in the Fifth district in Holmes county, Miss Plaintiffs claimed in their pleadings that the defendant breached the contract in three different particulars: (1) That it failed to furnish gravel when and as it should have done; (2) that it failed to furnish pipe when and as it had agreed; and (3) it required plaintiffs to do extra work, and refused to pay them for it-- and that because of the breach in these particulars the plaintiffs had been unable to complete the contract. They sued for the 15 per cent. retained by the county out of previous estimates, for the profits they would have made on hauling the gravel, if it had been furnished, and for the amount claimed to be due them for the extra work.

The defendant contended: (1) That plaintiffs had no standing in court, because they did not first obtain final action on their claim at the hands of the board of supervisors, and (2) that the claimed 'extra' work was not in fact extra, but was provided for in the contract to be paid for at contract prices; that the defendant quit, not because of the failure to furnish gravel or pipe, but because of the refusal of the engineer to comply with their unwarranted demand that the unit mile instead of the average mile basis should be adopted in the payment for hauling the gravel; and, finally, that the plaintiffs had suffered no loss of profits, but had visited heavy losses on the county by abandoning the work before completion.

The statutes of Mississippi, where this contract was made and performed in part, provide as follows:

Sec. 311, Mississippi Code 1906 (Hemingway's Code, Sec. 3684): 'A person having a just claim against any county shall first present the same to the board of supervisors thereof for allowance; and, if the board shall refuse to allow it, may appeal the judgment of the board to the circuit court, or may bring suit against the county; and, in either case, if such person recover judgment, the board of supervisors shall allow the same, and a warrant shall be issued therefor.'

The plaintiffs, on, to wit the . . . day of November, 1917, and prior to the November meeting of the board of supervisors, made out and filed with the board of supervisors the following claim on which this suit is based.

To 15 per cent. retained on estimates ..............................	$ 2,492.81
Extra excavations of 26,414 cubic yards of dirt, which exceeded the estimated amount, plus 30 per cent., and on which the engineer agreed to pay 5 cents per yard additional ...............	1,320.70
Profits on hauling gravel under said contract, which would have amounted to ......................................................	7,500.00
Amount for hauling gravel ...........................................	181.50
	----------
	$11,495.01

No action was taken by the board, either to approve or disapprove the claim at that meeting, or at any of its subsequent monthly meetings; the consideration of the claim being postponed, sometimes for reasons stated, and sometimes on a mere order of postponement. The claim not having been approved at the December meeting of the board, suit was brought in the District Court of the United States in cause No. 6,736, and thereafter, the board still not having approved the claim, the declaration was amended setting up that fact.

To this declaration a demurrer that the suit was premature, because the declaration showed on its face that the board of supervisors had not taken action on the claim, was sustained, and plaintiff thereafter filed an amendment, claiming that the board still had failed to approve the claim, and after the August meeting of the board filed another suit in the same court, substantially setting up the same facts, and alleging that up to that date the supervisors had refused to allow the claim. The two suits were consolidated, and, defendant's demurrers having been overruled, the cause went to the jury on the issues, first, as to whether the board of supervisors had had a reasonable time to act on the claim before suit was filed; and, second, whether or not the county had breached the contract, and what amount plaintiffs were entitled to recover on their claim.

As to the first matter, the necessity for an affirmative refusal of the claim by the board before suit could be brought, we think it clear that neither the terms of the statute nor the decisions of the courts of Mississippi relied upon by defendant supports the contention which it makes. Reason and the considerations which underlie the enactment of such statutes do not give to the word 'refuse' the meaning defendant asserts. The failure to allow, after a reasonable time, is equivalent, for the purposes of suit on a claim, to an actual denial. The purpose of the presentation is to give the county an opportunity to examine and consider the claim on its merits before being subjected to a suit. It is not the purpose of the statute, nor can it be given the effect, to permit the board to defeat a claim by nonaction. Such a construction would amount to lodging with the board the power to deny suitors access to the courts. We are therefore satisfied that plaintiffs' suit was not prematurely brought, and no error was committed by the court in that regard.

We think it equally clear, however, that the court below erred to the prejudice of the defendant, and that the cause must be reversed. In view of the fact that the cause will be remanded, and many of the errors assigned will almost certainly not occur upon another trial, we shall discuss only the two which are fundamental, and which underlie the whole course and result of the trial.

As we have taken occasion to say, this is a simple suit on contract, and the ordinary and simple rules which involve suits on contracts apply. One of the most definite and unalterable of these rules is that, 'as a man binds himself, so shall he be bound,' or, stating it otherwise, the provisions of a contract, when unambiguous and plain, must measure the rights and obligations of the parties to it.

We think it can be stated as a general proposition of law that a public body can only be bound to the extent and within the limitations which its regularly constituted authorities have bound it. Text-books and cases are uniform on that point, and it needs no citation of authorities to support the rule that no contractual rights can spring against a municipality except in strict accordance with the law, and the corollary is equally well established that a municipality must act by order entered on its minutes with reference to its contract, and, having contracted, no additional burden or obligation can be imposed upon it, except by an order duly entered upon the minutes of the...