Independent School Dist. No. 6 of Caribou County v. Mittry

• Decision Date: 28 May 1924
• Citation: 226 P. 1076,39 Idaho 282
• Court: Idaho Supreme Court
• Parties: INDEPENDENT SCHOOL DISTRICT No. 6, OF CARIBOU COUNTY, IDAHO, Appellant, v. S. K. MITTRY & GEORGE MITTRY, Doing Business Under the Name of NORTH PACIFIC CONSTRUCTION CO., Respondents

226 P. 1076

39 Idaho 282

INDEPENDENT SCHOOL DISTRICT No. 6, OF CARIBOU COUNTY, IDAHO, Appellant, v. S. K. MITTRY & GEORGE MITTRY, Doing Business Under the Name of NORTH PACIFIC CONSTRUCTION CO., Respondents

Supreme Court of Idaho

May 28, 1924

MONEY HAD AND RECEIVED-BUILDING CONTRACT-VOLUNTARY PAYMENT-MISTAKE OF LAW-MUNICIPALITY-WAIVER-VOID CONTRACT-CONTRACT DEFECTIVELY EXECUTED-EFFECT OF PERFORMANCE-CROSS-EXAMINATION-CONSIDERATION-PROMISE TO PERFORM CONTRACT-NONSUIT.

1. The rule that voluntary payments made by reason of mistake of law cannot be recovered applies to individuals, but not to municipal subdivisions of the state.

2. Performance of a contract which a municipality had no power to make does not validate it but performance by the other party of a contract which the municipality had power to make may furnish ground for enforcing it against the municipality though it was defectively and irregularly executed.

3. A promise to do, or the doing of, that which one is already bound by contract to do is not a valid consideration.

APPEAL from the District Court of the Fifth Judicial District, for Caribou County. Hon. Robert M. Terrell, Judge.

Action for money had and received. Judgment of nonsuit. Reversed.

Reversed and remanded. Costs to appellant.

Budge &amp Merrill, for Appellant.

Public moneys paid in excess of amount allowed by law may be recovered. (Ada County v. Gess, 4 Idaho 611, 43 P 71.)

An overpayment made by a city to a contractor for work done under the contract may be recovered. (City of Chicago v. Weir, 165 Ill. 582, 46 N.E. 725.)

Public moneys improperly paid are not voluntary in the sense that payments made by one individual to another may be, and such moneys can be recovered. (Pocahontas County v. Katz-Craig Contracting Co., 181 Iowa 1313, 165 N.W. 422; Erie County v. Town of Tonawanda, 95 Misc. 663, 159 N.Y.S. 714; Board of Commissioners v. McLean, 50 Colo. 602, 115 P. 525.)

Money improperly paid as a bonus to secure the building of a grist-mill and electric light plant may be recovered as money had and received. (Village of Morrice v. Sutton, 139 Wis. 643, 103 N.W. 188; Ripley v. Case, 78 Mich. 126, 18 Am. St. 428, 43 N.W. 1097; McDonald v. Franklin County, 125 Ky. 205, 100 S.W. 816.)

Promise to do or doing what promisor is already bound to do cannot be a consideration, for if a person gets nothing in return for his promise but that to which he is already legally entitled, consideration is unreal. (9 Cyc. 347; Sullivan v. Sullivan, 99 Cal. 187, 33 P. 862; Harris v. Cassady, 107 Ind. 158, 8 N.E. 29; Schuler v. Myton, 48 Kan. 282, 29 P. 163.)

Neither the promise to do nor the actual doing of that which the promisor is by law or subsisting contract bound to do is a sufficient consideration to support a promise in his favor. ( Gaar Scott & Co. v. Green, 6 N.D. 48, 68 N.W. 318; Allen v. Plasmeyere, 3 Neb. (Unof.) 187, 90 N.W. 1125; Esterly etc. Machine Co. v. Pringle, 41 Neb. 265, 59 N.W. 804.)

Otto E. McCutcheon, for Respondent.

A contract with a municipality, although originally invalid, fully executed, where the municipality received the benefits of same, will not be set aside on the demand of the municipality unless the equities of the case require. ( New Haven v. Weston, 87 Vt. 7, 86 A. 996, 46 L. R. A., N. S., 921, at 926; Pillager v. Hewitt, 98 Minn. 265, 107 N.W. 815; Farmer v. St. Paul, 65 Minn. 176, 67 N.W. 990, 33 L. R. A. 199; Brown v. Atchison, 39 Kan. 37, 17 P. 465; 5 McQuillin, Mun. Corp., sec. 2488, and cases cited.)

Appellant ratified all irregularities by settling with the contractor and paying his bill. (Munk v. City of Watertown, 67 Hun. 261, 22 N.Y.S. 227, at 230; People v. Swift, 31 Cal. 26.)

A contractor may recover on a contract with a municipality irregularly made, where it has been fully executed and beneficial to the municipality, or has been ratified, or confirmed, or the municipality has estopped itself from denying it, or where the circumstances disclose an implied contract. (Watkins v. School Dist., 85 Kan. 769, 118 P. 1069; New Haven v. Weston, supra; Pillager v. Hewitt, supra; Farmer v. St. Paul, supra; Brown v. Atchison, supra; Steiner v. Polk, 40 Ore. 124, 66 P. 707.)

MCCARTHY, C. J. William A. Lee and Wm. E. Lee, JJ., concur.

OPINION

MCCARTHY, C. J.

Respondents constructed a school building for appellant. This action is to recover $ 2,950 which appellant claims was paid respondents in excess of the contract price, the contention being that the payment was unlawful. Respondents contend that this money was properly paid to them on certificate of the supervising architect in accordance with the contract, that appellant by making the payment waived the right to claim that the amount was not due. They also claim that their bid was made in reliance upon the selection by appellant of a certain site for the building and the representation of the supervising architect that only earth would have to be removed in excavating; that thereafter appellant changed the site of the building thereby necessitating the removal of rock in excavating; that thereupon, in order to induce respondents to proceed with the work, appellant agreed to pay the reasonable cost of removing the rock which was the amount in question. Upon the trial a motion of nonsuit was granted, and judgment entered for respondents, from which this appeal is taken. The principal assignments of error, and the only ones which we deem it necessary to mention, are that the court erred in granting the nonsuit and rendering judgment of dismissal, and in permitting respondents, on cross-examination of appellant's witnesses, to go into the question of the alleged change of location.

We will first consider the question of waiver. The rule that voluntary payments made by reason of mistake of law cannot be recovered applies to individuals, but not to municipal subdivisions of the state. (Ada County v. Gess, 4 Idaho 611, 43 P. 71; Pocahontas County v. Katz-Craig Contracting Co., 181 Iowa 1313, 165 N.W. 422; Erie County v. Town of Tonawanda, 95 Misc. 663, 159 N.Y.S. 714; Board of Commrs. v. McLean, 50 Colo. 602, 115 P. 525.) In ruling on the nonsuit the district court apparently relied on the following language found in article 27 of the specifications, to wit:

"The making and acceptance of the final payment shall constitute a waiver of all claims by the owner, otherwise than under articles 16 and 29 of these conditions or under requirement of the specifications, and of all claims by the contractor, except those previously made and still unsettled."

This language, however, clearly refers to a claim against the contractor, based on defective work or similar cause, and not to an overpayment above and beyond the contract price.

Respondents invoke the rule that, while the performance of a contract which a municipality had no power to make does not validate the contract, yet the performance by the other party of a contract which the municipality had power to make may furnish ground for enforcing it against the municipality, though it was defectively and irregularly executed. This rule is recognized by this court in Deer Creek Highway Dist. v. Doumecq Highway Dist., 37 Idaho 601, 218 P. 371. The rule is a sound one but there is a question whether it applies to this case. At the time the dispute over the rock first arose a special meeting of the board of trustees was held. Respondents insisted that the board agree to pay the entire cost of excavating the rock. By majority vote of those present the trustees agreed to pay approximately one-half or $ 1,500. This meeting was irregular because proper notice had not been given as required by the statute, and all the trustees were not present. Under the rule above stated, however, this irregularity would not be fatal to the agreement to pay the $ 1,500 if the board had authority to make it. The question is whether it had such authority. This we will consider a little later. Even if there were a valid agreement to pay the $ 1,500, this would not affect the balance.

The architect gave respondents certificates for the amount in controversy and the treasurer paid them. Under the specifications the contract price, and the price of any extras authorized by appellant, were to be paid on certificate of the architect, but there can be no contention that the treasurer had authority to pay out sums in excess of the contract price or the price of extras duly authorized by the trustees, merely on certificate of the architect.

If it be contended that a dispute had arisen which gave rise to an honest, though doubtful, claim on the part of respondents, which they forbore to press in consideration of appellant's offer to pay an amount in addition to the contract price, the answer is that the evidence does not support such a contention. Falkenberg testified:

"They had called a school board meeting. Mr Mittry, the general contractor called a special meeting,--I believe it was a special meeting on account he struck rock in the excavation, and he quit excavating and said, 'I won't go any further,' before we would say what to do about the work. I believe it was a special meeting, or a regular meeting,--I could not tell to-day whether it was a special meeting or not. Well, he called a meeting and talked the matter up about them rocks, and he talked quite a while about it, and the school board understood it this way: That the excavation should be done any way in spite of rock, or no rock, and the general contractor said that he was informed that there would be no rock in the excavation and he figured according to that, and they tried to settle the matter, and some member of the board, I believe,--I could not tell any more who,--made a motion to pay half the cost of excavating...