Jeffersontown v. Cassin
| Decision Date | 05 March 1937 |
| Citation | 267 Ky. 568 |
| Parties | Jeffersontown v. Cassin et al. |
| Court | United States State Supreme Court — District of Kentucky |
1. Municipal Corporations. — Contract between partnership and city, whereby partnership was employed in connection with water plant project to make preliminary surveys, to prepare estimates, reports, and plans, and supervise erection, although no record board of trustees' authorization thereof was made, held validated by ordinance ratifying ordinance authorizing erection of water plant, wherein contract was "hereby ratified and confirmed" and plans submitted by partnership were "finally approved, ratified and confirmed."
2. Municipal Corporations. — In action by partnership employed by city in connection with water plant project to make preliminary surveys, prepare estimates, reports, and plans, and to supervise erection, answer pleading that fee contracted for was excessive, contract was awarded partnership without advertising for bids, and that estimated cost of project was increased held insufficient to sustain plea of fraud or conspiracy (Ky. Stats., sec. 3707).
3. Municipal Corporations. — Statute requiring competitive bidding on contracts in excess of $100 for "work" and "supplies and materials" furnished in erection, improvement, and repair of public buildings and works held inapplicable to contracts made by municipal corporation for personal professional services, such as those of engineers and attorneys, employed by municipal corporation to make preliminary surveys in connection with water plant project, and to prepare estimates, reports, plans, and to supervise erection (Ky. Stats., sec. 3707).
"Work" may mean all labor, either corporeal or mental, but in a popular sense it is ordinarily applied to bodily labor, or that in which such is the principal factor.
4. Municipal Corporations. — Where city, when water plant project was abandoned, canceled contract whereby partnership was employed in connection with water plant project to make preliminary surveys, to prepare estimates, reports, plans, and to supervise erection, partnership held entitled to recover from city on quantum meruit basis, although contract had been entered into without competitive bidding, in view of personal professional nature of services called for thereby (Ky. Stats., sec. 3707).
Appeal from Jefferson Circuit Court.
WILLIAM A. HUBBARD for appellant.
C. MAXWELL BROWN for appellees.
Affirming.
Appellant is a municipal corporation assigned by statute to the sixth class. Appellee Cassin is a member of a partnership composed of himself, Graham, an attorney, and two other persons, trading and doing business under the firm name of the "Municipal Engineering Company of Louisville."
In October, 1933, the board of trustees of the town conceived the idea of erecting a water plant, and plans were discussed which if carried out might have resulted in procuring a grant of money from the government in aid of the project.
On November 2, 1933, a written contract was entered into by appellee and the town, by its chairman of the board, wherein was recited the necessity of having made certain preliminary surveys and investigations, and the preparation of estimates, reports, plans, and specifications, the purpose of which was twofold; to advise and guide the city authorities in perfecting their plan, and as a necessary prerequisite to present to the government such persuasive data as might obtain the money grant. The town employed appellee to do these things and to supervise the erection of the plant according to specifications. It also provided for the preparation of certain legal data by appellee; the drawing of ordinances, contracts, and perhaps other things, the combination of all of which required not only the services of a consulting and practical engineer, but a lawyer as well.
For services to be rendered, appellee was to receive an amount equal to 10 per cent. of the total cost; 2 1/2 per cent. was to become payable upon completion of the survey, plans, specifications and the contemplated necessary data. The balance was to be paid as the work progressed; payments to be made on approved estimates from funds set apart for that purpose out of the grant from the government.
We find no record of the board's action in authorizing the mentioned contract, but there is introduced by way of unattacked records, a copy of an ordinance of December 5, 1933, ratifying an ordinance authorizing the erection of the water plant, and therein appears the following:
"That the contract entered into between the town * * * and the Municipal Engineering Company * * * a copy of which is filed herewith and made part hereof * * * be and the same is hereby ratified and confirmed."
It also recited that Cassin had filed the completed plans and specifications with the board, which were duly examined in regular open meeting and found to be correct and "same are hereby finally approved, ratified and confirmed." This action validated the contract. Nickels v. Board of Councilmen of City of Frankfort, 111 S.W. 706, 33 Ky. Law Rep. 918; Baker v. Kelly, 226 Ky. 1, 10 S.W. (2d) 467; Masonic W. & O. Home v. City of Corbin, 229 Ky. 375, 17 S.W. (2d) 215.
Several interim meetings of the board were held, and on December 22, 1933, another ordinance was adopted authorizing the erection of the water plant; the only apparent difference in the two being that in the first ordinance bonds were to be issued to the sum of $30,000, and in the latter this sum was raised to $36,000. The estimate of the cost of the project in the engineer's tentative set up was a little more than $50,000.
In the year 1933, an election was held for trustees to take office in January, 1934. The members of the old board constituted one "slate" of candidates; another group was composed of new material, seeking election on an avowed platform of repealing the waterwork's ordinance. The new board was elected. After the election, but before being inducted into office, some of the newly elected members notified the board of their intention to repeal the ordinance, and notified the local federal government officials that they "did not want the loan." This notification stopped activity on the part of the federal government.
Appellee, after induction of the new board, presented its account for approval and payment, which was refused. In March, 1934, the new board repealed the ordinance and cancelled appellee's contract. On August 20, 1934, appellee filed suit against the town seeking recovery of $3,000. It was specifically alleged in addition to preliminary facts as above set out, that appellee had in part performed the contract, and that since the ordinance had been repealed, the contract canceled, appellee was entitled to recover for the services rendered; that is, it sought a recovery on a quantum meruit.
Demurrer to the petition was overruled and the town answered denying the allegations of the petition, except so much of it as alleged annulment of the ordidance, cancellation of the contract, and its notification to the governmental authorities, saying their action expressed the will of the voters in selecting them as trustees, and it pleads in a second paragraph these facts in defense. It is also pleaded that the contract between appellee and the old board was attempted to be entered into fraudulently, and was further entered into in violation of section 3707 Kentucky Statutes, which requires competitive bidding on contracts in excess of $100. This was admittedly true.
In an amended answer the town pleaded fraud and conspiracy on the part of the contractors, in that the contract was awarded to appellee at an excessive price. It arrives at such conclusion by pointing out that when the ordinance was passed it provided for an issuance of only $30,000 in bonds; but that when the tentative program was submitted by appellee it called for a plant to cost approximately $50,000, which would have made its contract fee "an excessive charge of $4,555.37, which was excessive to the extent of 50%"; that the government found the plan to be unfeasible and never approved it, the defense based seemingly on the charge of fraud because of the alleged excessive fee, the awarding of the contract without advertising for bids, and the raise in the estimated cost of the project.
Disposing of the question of fraud at this time, it is enough to say that the pleading is far from sufficient to sustain a plea of fraud, collusion, or conspiracy. Even if it were otherwise, the proof later introduced failed altogether in sustaining such a charge. The fee may have been excessive, and it is true that a government official testifying said that he could not, or did not, approve the contract for more than 7 per cent. of the total cost. The government's disapproval of the 10 per cent. and an approval of a lesser amount would have cured this portion of the contract; this was recognized, and, according to the proof admitted by appellee.
The matter of increase in the cost of the plant could have been remedied by action of the board. It did not have to accept the finding of the engineer, though it does appear that the board later raised the issue of bonds to $36,000. The matter of reflecting the views of the people indicates a meritorious design on the part of appellant, but the failure of the old board to "listen to the election returns" is no indication or evidence of fraud, as is neither the suggested haste with which the board acted, as may be gathered from such evidence as gives reasons for such action.
The court below sustained demurrers to the second and third paragraphs of appellant's answer. There does not seem to have been a demurrer to the amended answer, to which appellee replied, denying categorically each allegation thereof. With the issues thus formed, proof heard and instructions given, the jury returned a verdict for appellee in...
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