Kotschevar v. North Fork Tp., Stearns County
| Decision Date | 15 July 1949 |
| Docket Number | No. 34856.,34856. |
| Citation | 229 Minn. 234,39 N.W.2d 107 |
| Parties | KOTSCHEVAR v. NORTH FORK TP., STEARNS COUNTY, et al. |
| Court | Minnesota Supreme Court |
Appeal from District Court, Stearns County; D. M. Cameron, Judge.
Action to recover balance due for construction of road by Math N. Kotschevar, doing business as the Kotschevar Construction Company, against Township of North Fork, Stearns County, and others. From an order denying named defendants alternative motion for judgment or a new trial, the named defendant appeals.
Order affirmed.
Harry E. Burns, St. Cloud, for appellant.
Pierre N. Thomey, Ahles & Ahles, St. Cloud, for respondent.
Plaintiff is a road builder. He was employed by defendant Township of North Fork, Stearns county, to construct a five-mile stretch of road. An additional two and one-half miles were added later. The road was constructed by plaintiff and accepted by the town board. The board, because of the objections here presented for decision, was unable to pay the bill in full. Plaintiff brought action and recovered a verdict, reduced by the court to $3,886.39. Defendant appeals from an order denying its alternative motion for judgment or a new trial.
In June 1945, the town board sent for plaintiff and entered into an agreement with him to build the contemplated road. No formalities of any kind, as required by statute, were observed. There were no plans or specifications, no bids, no written contract, and no bond. The town board agreed to pay plaintiff so much per hour for the use of his road-building machinery and operators at varying rates for the different machines, and so much per hour for other labor. Other details entered into the arrangement. Property owners along the proposed improvement contributed and paid into the town treasury $1,225 to help pay for same.
Plaintiff commenced construction July 13 and completed the job August 30. The road was built according to the county engineer's specifications. On September 6 plaintiff filed an unverified claim for $11,874.76. On that same day, the town board voted that the roads built were satisfactory and by resolution accepted them. On September 10 it voted to pay plaintiff $3,000 on his account. He received $1,500 in cash and was issued a town order for $1,500, which has not been paid. On December 30, 1946, the board rejected a verified bill submitted by plaintiff on December 6, 1946.
The valuation of all property in the township, real and personal, for 1944, was $253,019. At the annual town meeting held on March 14, 1944, the electors voted a tax levy of $1,500 payable in 1945 for road and bridge purposes, and an additional $5,000 for postwar road work. This latter amount was to be used for the improvement of the road in question. The town clerk reported the levy to the county auditor. It appeared to the county auditor that the amount voted at the annual town meeting would call for a tax levy in excess of 15 mills, the maximum allowed by law for road and bridge purposes in the absence of an emergency. M.S.A. § 163.05. So the auditor reduced the total amount to be levied to $3,500-$1,500 for the road and bridge fund and $2,000 for incidentals. The latter could be used for road and bridge purposes. The total amount which might have been levied under the 15-mill limitation was $3,795.28.
1. The record discloses no fraud or collusion in the transaction, and there is no claim by defendants that any exists. Plaintiff was employed to build the road on an hourly basis. Construction work could have been stopped at any time. The chairman of the town board supervised the work. It was voted satisfactory by the board and by resolution accepted. The plaintiff in all fairness would be entitled to the full amount asked for in any such transaction between man and man. The fact that he was dealing with a township, a public corporation, creates the legal difficulties which he is encountering in attempting to get paid for his work.
The township does not contend that the work done by plaintiff was not reasonably worth the amount claimed or that the township did not benefit to the extent of the claim. The town had the legal power to enter into a contract for the construction of the road, such as was here attempted to be made. The agreement between the town board and plaintiff was therefore ultra vires in the secondary sense only. We are not dealing with a case where ultra vires in the primary sense is involved.
As stated, the township had the power to let a contract to build the township road in question. But in so doing none of the statutory requirements for the letting of such a contract was complied with. The town board by resolution employed plaintiff to do the work, supervised the same, and after its completion by resolution approved and accepted it. Being intra vires, or within the powers of the township, the question arises whether plaintiff in quasi contract may recover the reasonable value of the benefits received by the township. The authorities are in conflict. In many jurisdictions, a distinction is made between mandatory and directory statutory provisions. If the violated provisions are considered mandatory, a majority of the courts deny recovery; if directory only, as a general rule recovery for benefits conferred is allowed. Then a conflict arises as to which provisions are mandatory and which are directory. There is even a split of authority as to whether statutory requirements of competitive bidding are mandatory provisions. Then, the further question arises whether recovery is forbidden by the statutes or constitution of the jurisdiction. If in this state any one of the statutory provisions applicable to the letting of a contract is mandatory and this court should say that a violation of mandatory provisions precludes recovery on a quantum meruit basis, then clearly in this case there could be no recovery by plaintiff, as all statutory provisions were ignored. In 10 N.Y.U.L.Q.Rev. 68, 72, the writer makes this statement:
"A distinction is often made between mandatory and directory provisions in the charter or statute bearing upon the method of making a contract. A mandatory provision is held to be exclusive and no recovery is allowed for violations of it. A recovery is not denied, on the other hand, for departures from directory provisions. The distinction seems obvious and would probably be accepted by all courts where recoveries in contract are concerned, but it certainly does not account for quantum meruit recoveries. The fact in itself that a provision is mandatory bears no relation to a recovery of the reasonable value of benefits received, unless the provision itself can be shown to apply to that kind of action.
* * * * * * "A few states like Minnesota allow a recovery in almost any situation within the general powers of the corporation, * *."
We need not, however, consider and analyze the holdings of other jurisdictions, as this court has several times passed on similar facts. The question submitted to us is not a stranger in this state. This jurisdiction has probably gone farther in permitting recovery for benefits received on a quasi-contractual basis, under situations as here, than any other jurisdiction, and its earlier holdings have been criticised. But as is pointed out in several notes in law journals, there is a definite trend to broadening the application of the quasi-contract remedy against municipal corporations. 16 N.Y.U. L.Q.Rev. 494; 36 Mich. L.Rev. 855-860; 21 Neb.L.Rev. 54. In Minnesota Annotations to Restatement, Restitution, § 62, the Minnesota rule is stated as follows:
In First Nat. Bank v. Village of Goodhue, 120 Minn. 362, 139 N.W. 599, 43 L.R. A.,N.S., 84, the municipality failed to comply with the requirements of statutes made essential to a valid contract, in other words it failed to comply with mandatory provisions, and recovery was had against it as upon an implied contract. In that case, plaintiff bank made two loans to the village. Both of them were illegal and void for the reason that the village council was not authorized to make such a loan of money without first submitting the question to the legal voters for approval, which had not been done. One of the loans was illegal and void for the further reason that the president of the village council was also a managing officer of the plaintiff bank, and was prohibited by law from entering into any contract with the village in which his bank was interested. In doing what he did, he was guilty of a crime. The money received by the village from plaintiff bank was used and expended in the purchase of a site and the erection thereon of a fire and jail building for use of the village. Mr. Chief Justice Brown, writing for the court, said, 120 Minn. 366, 139 N.W. 600:
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