Kansas City Sewer Pipe Company v. Thompson
| Decision Date | 13 February 1894 |
| Parties | Kansas City Sewer Pipe Company, Appellant, v. Thompson et al |
| Court | Missouri Supreme Court |
Appeal from Pettis Circuit Court. -- Hon. Richard Field, Judge.
Affirmed.
Albert Young for appellant.
(1) The city of Sedalia, being a body politic, with capacity to contract, may, within the sphere and in the execution of its appropriate powers, take bonds and securities which are not prohibited, though not prescribed expressly in the legislative grant. Such bonds and contracts, when taken for a lawful purpose, and upon good consideration, are valid. 1 R S. 1889, secs. 1494-1499; 1 Dillon's Mun. Corp. [4 Ed.] secs. 89-91, and secs. 214, 447; United States v. Tingey 5 Pet. (U.S.) 114; United States v. Linn, 15 Pet. (U.S.) 290; Montville v. Houghton, 7 Conn. 543; St. Joseph v. Coffinbury, 1 Mich. 355; McCarthy v. Chicago, 53 Ill. 38; Turner v. Clarke County, 67 Mo. 243. (2) A contract may be enforced by a third party when entered into for his benefit, though he is not named therein, or is ignorant of its provisions or existence at the time of its execution. There need be no privity between such parties. This is a doctrine well settled in the jurisprudence of this state. Rogers v. Gosnell, 58 Mo. 589; State ex rel. v. Gas Light Co., 102 Mo. 472; Ellis v. Harrison, 104 Mo. 270. (3) If there be in fact a consideration for a promise or engagement made for the benefit of the person who sues, it is not essential for it to have passed directly from him to the person sued. Claflin v. Ostrom, 54 N.Y. 581; Hendrick v. Lindsay, 93 U.S. 143; Lumber Co. v. Water Co., 89 Ky. 340; Anderson v. Fitzgerald, 21 F. 294; Burton v. Larkin, 36 Kan. 246; Devol v. McIntosh, 23 Ind. 529; Gandy v. Gandy, 30 L. R. Ch. Div. 57. (4) The city of Sedalia had the power to make this contract for itself as well as for the benefit of third parties, and did make it, and the plaintiff, appellant, being the real party in interest, has the right to prosecute in its own name, and may do so by the express provision of our practice act. City of Kansas ex rel. Blumb v. O'Connell, 99 Mo. 357.
Jackson & Montgomery and J. T. Montgomery for respondents.
(1) The trial court committed no error in sustaining the demurrer to the evidence. The bond sued on is not available to third persons, and the defendants are only liable to the city. Blumb v. O'Connell, 99 Mo. 357; Davis v. Water Co., 54 Iowa 59. (2) Municipal corporations under their charters can exercise the following powers and no others: First, those granted in express words; second, those necessarily or fairly implied or incident to the powers granted; third, those essential to the declared objects and purposes of the corporation -- not simply convenient, but indispensable. Gas Light Co. v. Mercer, 48 Mo.App. 644; Knapp v. Kansas City, 48 Mo.App. 485; St. Louis v. Tel. Co., 96 Mo. 628; Kansas City v. Swope, 79 Mo. 446; Dillon on Mun. Corp. [4 Ed.], sec. 89. (3) It is not within the charter powers of the city of Sedalia, organized under the statutes as a city of the third class, to incorporate in its contracts for the building of public works provisions of indemnity for the individual benefit of third parties. Becker v. Water Works, 79 Iowa 419. (4) The plaintiff was not entitled to recover on the contract and bond because it was not a privy to the contract between the city of Sedalia and the defendants, and because, further, the provisions in the contract and bond state, in express terms, its manifest purpose to bind the contractor and his sureties (the defendants herein) to indemnify and save harmless the city; and to assume all responsibility and hence can only be construed in favor of the city and not for the benefit of third persons. Ins. Co. v. Water Co., 42 Mo.App. 118; Beck v. Water Co., 11 A. 300. (5) The city of Sedalia can not assume a liability where none was imposed by law and the contract and bond must be construed as one of indemnity, having reference to existing grounds of liability and not creating new ones. Vanhorn v. City, 63 Iowa 448. (6) The city of Sedalia had no power under its charter, either expressed or implied, to incorporate in the contract the clause relied upon by the appellant, viz.: "Said parties of the second part (defendants) hereby guarantee that said party of the first part, will well and truly perform the covenants hereinbefore contained, to pay all laborers employed and for all material furnished on said work." There is no covenant in the contract, by which Camp, the contractor, agrees to pay for material furnished.
In August, 1890, the city of Sedalia, a city of the third class under the general laws of Missouri, by its council, duly passed an ordinance providing for the construction of a sewer in said city to be known as district sewer number 6. The ordinance provided, among other things, that said work should be let by the city engineer by taking bids for same, and that the successful bidder should enter into a contract and give bond for the faithful performance of the work in the principal sum of double the amount of the estimated cost of the work made by the engineer, and that said bond should be accepted and approved by the mayor of the city. One E. J. Camp was the successful bidder for the construction of the sewer and he is principal and party of the first part, with the defendants, J. C. Thompson and Cyrus Newkirk, as sureties, and parties of the second part, entered into a contract and bond in the sum of $ 60,000 with the city of Sedalia for the faithful performance of his bid. The contractor was to receive special tax bills in payment of the work, and the city was not to be otherwise liable. The obligation of the sureties followed the stipulations of the contract in the same instrument, and was in these words:
The plaintiff herein, a corporation, furnished said Camp sewer pipe for said work to the amount of $ 5,622.47, and he paid on said account $ 1,083.57, leaving a balance of $ 4,539.20 unpaid. Camp being insolvent, plaintiff brought this action, claiming that by virtue of said bond, the sureties of said Camp were liable to it, under the stipulation in said bond, "to pay for all material furnished on said work." The answer is a general denial. The circuit court sustained a demurrer to the evidence, and plaintiff brings the case here by appeal.
The sole question in this case is, can the plaintiff avail itself of the provision made in the contract between Camp and his sureties and the city of Sedalia to which he was not...
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