Inland Construction Co. v. Rector

• Decision Date: 11 March 1918
• Docket Number: 213
• Parties: INLAND CONSTRUCTION COMPANY v. RECTOR
• Court: Arkansas Supreme Court

202 S.W. 712

133 Ark. 277

INLAND CONSTRUCTION COMPANY v. RECTOR

No. 213

Supreme Court of Arkansas

March 11, 1918

Appeal from Cleburne Chancery Court; G. T. Humphries, Chancellor reversed.

Decree reversed and cause remanded.

Lemuel H. Doty and Rose, Hemingway, Cantrell, Loughborough & Miles for appellant.

1. The finding of the engineer is conclusive. 48 Ark. 522; 68 Id. 187; 79 Id. 513; 83 Id. 140 142; 93 Id. 31-41. See also 212 U.S. 18; 3 Cyc. 621.

2. The damages awarded are excessive. 33 Ark. 751; 64 Id 35; 67 Id. 219.

3. The sureties were discharged by modification of plans and contract. 6 Cyc. 82; 120 Ark. 527.

George W. Reed and Williams & Seawel, for appellees.

1. The court did not err in finding for appellees upon the merits and they were entitled to judgment. The funds of the district were obtained by appellants illegally and without legal authority. The contracts were not legal and binding because the board had not formed any plans for improvement, nor obtained the approval of the State Board of Health, etc., failed to require legal bonds; failed to establish what the plans and specifications contained; or if the contracts were legally entered into they were abandoned. Kirby & Castle's Dig., § 6836; 52 Ark. 511; 73 Id. 194; 69 Id. 159; 24 N.J.Eq. 143; 185 S.W. 474; 9 C. J. 772; 134 U.S. 260; 23 Ala. 622; 28 Iowa 253; 88 F. 630; 124 Ark. 337; 92 Id. 254; 28 Id. 387.

After the removal of the commissioners by the council their power and authority ceased. 2 Dillon, Mun. Corp. (5 ed.), § 485; 127 Ark. 110. The institution of proceedings to quash the order of removal did not continue them in office. 28 Cyc. 448; 160 Ill. 550; 115 N.Y.S. 664. Their acts were void. 60 S.W. 5; 48 Me. 79; 28 Cyc. 421; 39 Id. 875. Appellants had knowledge of the removal order, and were charged with knowledge. 11 Cyc. 468; 28 Id. 646; 150 S.W. 498; 167 Id. 922; 137 Id. 237; 44 Ark. 437; 70 Id. 568; 39 Id. 580; 25 Id. 261; 114 Id. 289. They were not de facto officers. 15 P. 778; 69 Ark. 460; 45 Id. 478; 49 Id. 446; Cooley, Const. Lim., 131 S.W. 735; Mechem, Pub. Off. 328; 42 N.E. 184; 48 L. R. A. 412; 25 A. 977.

The order of the counsel was self-executing and not appealable. It could not be superseded. 31 S.W. 105; 57 N.W. 115; 63 Iowa 711; 41 Ind. 356, etc. See also 19 Nev. 312; 10 P. 430.

The judgment of the circuit court in the certiorari proceedings was reversed by this court and even color of title was wiped out. 4 C. J. 1204; 86 Ark. 86; 54 Id. 239; 34 Id. 569; 29 Id. 85. See also 114 Ark. 289.

2. The bondsmen are liable as aiders and abettors of the wrongful act. 25 Ark. 108; 38 Cyc. 485; 74 A. 1070; 234 Ill. 526.

3. If authority legally existed for payment of the funds, appellant failed to perform the conditions. There was variance between the plans and the written specifications and the latter prevail. 9 C. J. 711; 129 Mass. 322; 64 N.Y.S. 848; 85 S.E. 513.

4. Alexander could not bind the district--he had no authority to waive the requirements of the plans and specifications. The affairs of a corporation must be transacted by its officer directors at a corporate meeting. 64 Ark. 491; 85 S.E. 513; 24 N.J.Eq. 143; 19 Id. 376; 4 Elliott, Cont., § 614. See also 85 A. 513; Ib. 31.

5. The engineer had no authority to authorize changes in plans and specifications. 34 Mo.App. 570; 100 Ark. 166; 22 N.Y. 162. The authority can not be delegated. 35 Ark. 198; 96 Id. 105; 70 Id. 352; 150 S.W. 498; 167 Id. 922; 137 Id. 237; 70 Ark. 568; 39 Id. 580; 114 Id. 289. Authority can not be inferred. 93 Ark. 600; 33 Id. 251; 44 Id. 213; 85 Id. 252. See 11 Ark. 705-710.

6. The finding of the engineer is not conclusive. 48 Ark. 522; 100 Id. 284-295; 185 S.W. 474; 9 C. J. 755; 56 Ark. 205; 19 N.J.Eq. 376; 100 Ark. 166; 87 Id. 120; 127 Id. 110.

7. The sureties were not discharged and the damages are not excessive. 9 C. J. 818; 97 Ark. 278; 79 Id. 513.

7. Appellees were entitled to recover the full amount received by appellants from the district. 114 Ark. 289; 9 C. J., § 78; 157 Ill.App. 175; 149 Id. 646; 80 N.Y.S. 864; 14 S.W. 701; 70 Ark. 506. See also 24 N.J.Eq. 143; 102 Ark. 51; 64 Id. 34; 9 C. J. 741, § 79; 97 Ark. 278. The findings upon the merits should be affirmed and on cross-appeal appellees should recover.

The attorneys for appellants in reply.

The judgment below was binding until reversed on appeal. The old board was removed but the judgment was quashed. 80 Ark. 582. This court has power to maintain the statu quo by appropriate orders. 84 Ark. 404; 73 Id. 66. Appeal without supersedeas does not suspend judgment. 77 Id. 580. See also 69 Ark. 606.

The contracts were valid. 3 Ark. 571; 96 Id. 477; 30 Id. 69; 12 Id. 296; 24 Id. 431; 31 Id. 609; 110 Id. 515.

The damages are excessive. The correct rule is stated in 33 Ark. 751. See also 64 Ark. 35; 67 Id. 219.

OPINION

MCCULLOCH, C. J.

An improvement district was formed in the town of Heber Springs for the purpose of constructing waterworks and sewers, and after the completion of the organization of the district the board of improvement let the contract for the construction of the improvement to appellant, Inland Construction Company, the contract price being the sum of $ 50,800 for the construction of the waterworks and $ 33,950 for the construction of the sewer system. The original contracts between appellant and the board of improvement were entered into on October 26, 1915, but the contracts were subsequently modified in certain respects by mutual agreement to meet the approval of the State Actuary Board and the State Board of Health. Before work was begun under the contracts, in fact before the above mentioned modification of the contracts was made, the town council of Heber Springs, after trial, removed the members of the board of improvement for alleged misconduct, but there was an application to the circuit court for writ of certiorari and the circuit judge in vacation granted an injunction restraining the new board of improvement elected by the town council from assuming the duties of the office in interfering with the discharge of those duties by the members of the old board and on the trial of the cause the circuit court quashed and set aside the order of the town council removing the members of the old board from office. An appeal was prosecuted to this court by the mayor and other members of the town council and on January 22, 1917, this court rendered a judgment reversing the judgment of the circuit court and dismissing the writ of certiorari. The judgment of the circuit court was not, however, superseded during the pendency of the cause on appeal in this court, and the old members of the board of improvement who had been removed by the order of the town council, but restored to office by the judgment of the circuit court, continued to act as members of the board and thereafter entered into an agreement with appellant for a modification of the contracts for the construction of the improvement. Appellant proceeded with the work of constructing the improvement in accordance with the contracts, and the district paid to appellant as contractor from time to time on estimates of the engineers $ 50,549 on the price of the construction of the waterworks and the sum of $ 32,698.67 on the price of the construction of the sewer system, leaving a balance of $ 251 on the waterworks contract and $ 1,251.33 on the sewer contract. There was a final acceptance of the work by the engineer, but the acceptance was after the rendition of the judgment of this court dismissing the writ of certiorari, and after the new board had again assumed to act in that capacity, and refused to recognize the validity of the contracts of appellant or the authority of the engineer to represent the district.

Appellant instituted this action against the improvement district to recover the balance alleged to be due on the contract prices and the board of improvement filed a cross-complaint alleging that appellant had not complied with the contracts in many specified particulars and praying for a recovery of the amount paid under the contract. On the final hearing of the cause the court rendered a decree in favor of the board of improvement for recovery of $ 7,000 of the sum paid to appellant on the price of the waterworks and $ 21,000 of the sum paid on the price of the sewer system. Appellant prosecuted an appeal to this court and the board of improvement cross-appealed from that part of the decree refusing to award recovery of the full amount paid to appellant by the district. The sureties on appellant's bond as contractor were joined as defendants in the cross-complaint and they, too, have joined in the appeal.

The first question to be disposed of is that raised by appellees concerning the validity of the contracts. It is claimed that the contracts are void because the members of the board of improvement were removed from office before the contracts became effective; that, as the binding force of the contracts is dependent on the authority of the members of the board at the time it was modified, and they were out of office and without authority at that time, therefore there was no valid contract. This contention narrows down to the question whether or not the old members of the board of improvement notwithstanding their removal from office by the town council, were de facto members of the board after the circuit court assumed jurisdiction and rendered judgment restraining the new members of the board from interfering with the old members in the discharge of their duties and quashing the order of the town council. It is urged that the effect of the judgment of the circuit court was not to restore the old members of the board to office, but we are of the opinion that such was the...