Jobe v. Caldwell

• Decision Date: 17 April 1911
• Citation: 136 S.W. 966,99 Ark. 20
• Parties: JOBE v. CALDWELL
• Court: Arkansas Supreme Court

136 S.W. 966

99 Ark. 20

JOBE v. CALDWELL

Supreme Court of Arkansas

April 17, 1911

Appeal from Pulaski Circuit Court, Second Division; F. Guy Fulk Judge; reversed.

Reversed.

Hal L Norwood, Attorney General, and William H. Rector, Assistant for appellant.

1. This court has twice held that the act of 1903 appropriating $ 1,000,000 for the purpose of completing the State capitol was not a continuing appropriation but was void after the expiration of two years. Art. 5, sec. 28, Const. 1874; 85 Ark. 171; 93 Ark. 513. The law provides what disposition is to be made of appropriations unexpended at thee end of two years. See Kirby's Dig. §§ 3416-17-18. No appropriation is valid for a longer period than two years, whether amounts claimed to be due accrued within that period or afterwards.

2. If it were a fact that the Legislature could make a continuing appropriation, or that warrants could be drawn upon an appropriation at any time after two years, provided the amount was earned during the two years, still the Auditor would not have been allowed, under the circumstances of this case, to issue a warrant to the appellees, because the Patterson act, being act 143 of the Acts of 1909, created a commission to settle the controversy between the State and appellees. See section 2 of the act. And, until some amount should be certified to the Auditor by the Capitol Commission as being due to appellees, as provided by the Oldham act, the Auditor was without authority to issue a warrant on the Treasurer in their favor.Act 238, Acts 1909, § 12; 93 Ark. 513.

J. W. Blackwood, for appellees.

1. It was provided by the act of 1903, § 6, that not more than 90 per cent. of the amount earned should be paid to the contractors until the building was fully completed and accepted, when the 10 per cent. retained should be paid, with the final estimate, to the contractors, etc. This 10 per cent. having been earned by appellees and retained by the board of commissioners, became segregated from the funds in the treasury to the credit of the capitol fund, and became the property of the appellees, subject to the condition of Completing the building. 73 Ark. 473; 79 Ark. 530.

2. When the State unconditionally cancelled the contract, and took from appellees the custody of the unfinished building and grounds, she destroyed the existence of the contract, and waived all of its terms that were subject to her control. See act April 20, 1909, § 1. The effect of this act was to make it impossible for appellees to erect the building and comply with the condition of the contract. They are therefore entitled to recover for the work performed by them in like manner as if they had fully completed the work of erecting the building and thereby fully performed the contract. 4 N.Y. 412. Appellees' prayer for relief is confined to the recovery of the 10 per cent. earned and retained. The ascertainment of the fact that this sum has been earned by appellees and retained in the treasury for their use involves a mere matter of an inspection of public records in the possession of the Auditor by the requirements of the statute. Act 1903, § 4 et seq. The allowance and dedication to the use of appellees are demonstrated by the allowance and payment of the 90 per cent. 109 F. 819; 103 F. 418; 102 U.S. 187; 68 Ark. 584.

3. By the act of April 20, 1909, abolishing the Board of State Capitol Commissioners, the State put it out of her power to require her agent and representative, said Board, to furnish appellees with the certificates required by sec. 6, Act 1903. 167 N.Y. 238; 22 F. 524; 91 U.S. 646; 153 U.S. 540; 61 N.Y. 173; 53 N.Y. 374; 78 N.Y. 216; 2 Sutherland on Damages (1884 ed.), 521-22; 71 N.Y. 558; 20 N.Y. 464. When the State enters into a contract with a private individual, she lays aside her sovereignty and treats with her commercial adversary as an equal; and in such case, although an action may not lie against the State for a breach of the contract, yet the rights and obligations of the parties must be adjusted by the courts upon the same principles as if both parties were private persons. 71 N.Y. 549; 26 Wis. 302; 16 Wall. 203; 96 U.S. 432; 15 How. 308; 5 Ark. 598; 7 Wall. 229-250; 66 Tex. 701; 94 U.S. 214; 59 Mich. 300; 36 Wis. 439; 5 East 449; 49 P. 449.

4. The limitation of art. 5, § 29, Const. 1874, is upon the accrual of liabilities to be paid out a certain appropriation for the period of two years. No implication arises that the money should actually be paid out of the treasury within two years. 5 Neb. 278; 60 Neb. 494; 39 So. 792.

MCCULLOCH, C. J. HART, J., dissents. WOOD, J., concurring.

OPINION

MCCULLOCH, C. J.

Caldwell & Drake, formerly contractors for the construction of the new State Capitol building, instituted this action in the circuit court of Pulaski County against the Auditor of State, praying for a writ of mandamus commanding the latter to issue a warrant on the State treasury for the sum of $ 33,373.82, alleged to be due them on estimates of the architect for work done on the building prior to April 16, 1905.

The contract dated August 14, 1903, between the plaintiff, Caldwell & Drake, and the Board of Capitol Commissioners created by the statute authorizing the construction of the building, contained the following stipulation:

"Payments will be made monthly upon the estimate of the architect, less 10 per cent. retained from each estimate, said retained amounts to constitute the final payment, to be made within thirty days after the completion and acceptance of the work; provided that said contractors shall not be paid in any one year a greater sum than can be realized in such year under the provisions of the law under which said building is constructed. The final payment shall be made within thirty days after the completion of the work included in this contract, and all payments shall be due when certificates for the same are issued. If, at any time, there shall be evidence of any claim, if established, the owner of said premises might become liable, and which is chargeable to the contractors, the owner shall have the right to retain out of any payment then due, or thereafter to become due, an amount sufficient to completely indemnify it against such claim."

It is alleged in the complaint that between the date of said contract and April 16, 1905, the plaintiffs furnished material and performed work to the amount of $ 333,730, according to the estimates of the architect and the allowances of the Capitol Commission, and that warrants were drawn and paid for the sum of $ 299,457.18, being the amount earned according to said estimates, less the ten per cent. deducted and retained in accordance with the terms of the contract, until the completion of the building.

The complaint sets forth the act of the General Assembly of 1909 cancelling said contract with plaintiffs, and then proceeds as follows:

"In pursuance of this action of the General Assembly, the State of Arkansas took from plaintiffs the possession of said building and grounds, and the connection of plaintiffs therewith was in all respects terminated; that, the condition upon which said payments of 10 per cent. so earned by them and retained by the Commissioners having become impossible by the act of the State, the obligation to deliver said retained sum became absolute; that the act aforesaid, in addition to cancelling the contract with these plaintiffs, abolished the Board of State Capitol Commissioners. The cancellation of said contract having abrogated the condition upon which said sum so earned was retained, it became the duty of defendant Auditor to issue his warrant upon the Treasurer therefor in payment and delivery thereof to these petitioners; that a demand was duly made on said Auditor for the issuance of said warrant, and was by him refused.

"The plaintiffs represent that there is now in the State treasury, to the credit of the State Capitol Fund, and has been at all times since the said sums were so earned, and, under the authority of the contract aforesaid, retained a sum largely in excess of the amount belonging to plaintiffs, and for the delivery of which a warrant is now retained."

The Attorney General demurred to the complaint, and, the demurrer being overruled, the court entered judgment awarding the writ of mandamus as prayed.

The act of the General Assembly approved April 20, 1909, known as the Patterson Act, entitled "An Act to create a Commission to adjust the controversy between the State of Arkansas and Caldwell & Drake and for other purposes," and the act of May 12, 1909, known as the Oldham Act, entitled "An Act to provide for carrying forward the work of the new State Capitol, and making appropriation therefor, and for paying any sum which may be found due the former contractors, and for the creation and appointment of a Capitol Commission and defining the duties, and for other purposes," are set forth in the opinion of this court in the case of Jobe v. Caldwell, 93 Ark. 503, 125 S.W. 423, and are hereby referred to for a more complete understanding of the question involved in the present case.

In addition to that, it should be stated that the act of the General Assembly of April 16, 1903, under which the contract with plaintiffs was executed, appropriated $ 1,000,000 for the purpose of constructing the Capitol building, and that no further appropriation for that purpose was made until the passage of the Oldham act in 1909.

The Auditor refused to issue a warrant, as in the former case referred to above, on the ground that no appropriation of funds had been made by the General Assembly for the payment thereof.

There are two questions of law bearing on the case which must be treated as settled by former decisions of this court.

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