Irelan v. City of Portland

• Decision Date: 18 March 1919
• Citation: 179 P. 286,91 Or. 471
• Parties: IRELAN ET AL. v. CITY OF PORTLAND ET AL.
• Court: Oregon Supreme Court

179 P. 286

91 Or. 471

IRELAN ET AL. v. CITY OF PORTLAND ET AL.

Supreme Court of Oregon

March 18, 1919

Department 2.

Appeal from Circuit Court, Multnomah County; R. C. Morrow, Judge.

Suit by A. B. Irelan and others against the City of Portland, and another to cancel street assessments. Decree for defendants dismissing the suit, and plaintiffs appeal. Modified.

This is a suit to cancel a street assessment charged against certain lots of plaintiffs for the improvement of Milwaukie street from Holgate street to Nehalem avenue. From a decree in favor of defendants, dismissing the suit, plaintiffs appeal. A former suit by other property owners with reference to the same improvement was passed upon by this court in the case of Sherrett v. City of Portland, 75 Or. 449, 147 P 382. The improvement consisted of paving Milwaukie street with Hassam pavement for a distance of about two miles. It was inaugurated in April, 1911, by the adoption of a resolution of intention by the city council. Afterwards a time and manner ordinance was passed. The council let the work to the Consolidated Contract Company for $1.75 per square yard of pavement. On June 16th of that year, the executive board, by a resolution duly adopted, fixed the time for the completion of the improvement at four months. The contract was executed on July 1st, and required the completion of the work by November 1, 1911.

The contractor did not begin work on the improvement during 1911. After November 1st, the property owners petitioned the council to declare the proceedings at an end, and proceed to relet the work, giving as reasons that the prices of paving had fallen approximately 25 per cent. and that the Ellis amendment to the charter of Portland, which became effective on July 1, 1911, and after the contract had been let required competition. The city authorities refused to interfere with the contractor. Afterward, on March 15, 1912 the executive board granted the contractor an extension of time to July 1, 1912. Before the expiration of this time, the contractor commenced the work. About November 5th, the contractor filed an application for an extension of time to November 15, 1912. This was allowed by the executive board. Afterward, the contractor asked for an extension to April 30 1913, which was allowed. The work was completed in April 1913. Subsequently the engineer certified the contract cost to the auditor as $130,812.20. To this amount as certified, the auditor's office added $6,537.11, under a charter provision which is that "a sum not to exceed five per cent. of the contract price as the cost of engineering, advertising and superintendence" shall be deemed a part of the cost of each improvement. No attempt was made by the city officials to ascertain what the actual cost of these items of engineering, advertising, and superintendence was. The engineering was done by regular officers of the city, employed and paid monthly salaries. This was in accordance with the custom of the city officials for several years past to add 5 per cent. of the cost of improvement for engineering. This amount for engineering, plaintiffs assert, was paid into the general fund and the cost and expenses in the way of salaries of the officials performing the work were paid out of the general fund.

After the work was accepted by the city officials and the final estimate was prepared by the city engineer and filed in the office of the city auditor, notice was given by the auditor, pursuant to section 394 of the City Charter, to the effect that the auditor had ascertained what he deemed a just apportionment of the cost of the street improvement; that the cost had been apportioned, and a proposed assessment thereof was on file in the office of the auditor and subject to examination, and, further, that any objection to such apportionment that might be made in writing to the council and filed with the auditor within ten days from the first publication of the notice "would be heard and determined by the council before the passage of any ordinance assessing the cost of said improvement." Within the time allowed the plaintiff E. E. Chapman filed with the auditor of the city of Portland objections in writing to the proposed apportionment of the assessment for the reasons that the contract was not legally let; that the prices were excessive, and the cost of the improvement was largely in excess of the benefits to each lot; that the lots of the plaintiff were assessed for catch-basins or inlets in front of other property, although such lots were assessed for all the catch-basins that were necessary, and which were put in front of these lots when the sewer was put in; that within the same time, plaintiff A. B. Irelan, also filed objections in writing to the assessment and apportionment for similar reasons. The objections of the property owners, together with the ordinance declaring the cost of improvement, were referred to the committee on streets. On May 14, 1913, this committee reported to the council in regard thereto as follows:

"That the objectors were called for but no one appeared in support of said objections. Your committee then carefully considered said objections, and finds that the apportionment of the assessment for the improvement of said street is equitable and just, and that the facts stated in the objections so far as the same apply thereto are not true."

It recommended that said objections be overruled. It appears from the minutes of the council that none of the objectors appeared in support of the objections that:

"The council then considered said objections, and found that the apportionment of the assessment for the improvement of said street is equitable and just, and that the facts stated in the objections so far as the same apply thereto are not true"

--and adopted the report of the committee, and overruled the objections.

H. H. Riddell, of Portland, for appellants.

L. E. Latourette, of Portland (W. P. La Roche, City Atty., of Portland, on the brief), for respondents.

BEAN, J. (after stating the facts as above).

The first contention made by counsel for plaintiffs is that the time stipulated in the contract for the completion of the work had expired, and, the work not being finished, the contract ceased to have any validity. The first question is, Had the contract expired? It provides that the work shall be performed in accordance with the plans and specifications therefor, and completed by the 1st day of November, 1911. The contract also provides for damages as provided for in Ordinance No. 19745 for any delay beyond the 1st day of November, 1911. This ordinance which was made a part of the contract also provides that:

"The executive board may further for unnecessary delay or delinquency on the part of the contractor declare a forfeiture of any such contract, and provide for the completion of the same by the city at the expense of the contractor."

It is alleged on the part of the city that the contract required the work to be done on or before the 1st day of November, 1911, unless delays were occasioned by certain things in the contract mentioned, in which case the contractor should have as many days additional time as were lost by such delays, and unless the executive board should grant an extension of time to the contractor. The matter of the rescission of the contract was referred to the city attorney. That official was informed by the city enginer as follows:

"I notified the contractor that this office would not permit the improvement until the proper underground work was installed, nor would I allow them to tear up the street by grading during the winter season, for the reason that Milwaukie street is the only road leading to Sellwood, Milwaukie and the southeast district, and the grading of the street during the winter would leave the people south of Holgate street without means of getting into the city."

The contract contains no provision making time of the essence of the contract, or creating an automatic forfeiture for a failure to complete the work at the appointed time. Section 397 of the charter discloses inter alia that:

"No delays, mistakes, errors or irregularities in any act or proceeding in the improvement of a street or the construction of a sewer or drain shall prejudice or invalidate any final assessment, but the same may be remedied by subsequent and amended acts or proceedings."

The council refused to rescind the contract, and thereafter extended the time for the completion of the work as stated above. It does not appear that the time for the completion of the work, according to all the stipulations of the contract had expired when such time was extended. The city would not be justified in forfeiting the contract when the delays in the execution thereof...