McKenzie Const. Co. v. City of San Antonio

• Decision Date: 20 April 1932
• Docket Number: No. 8801.,8801.
• Citation: 50 S.W.2d 349
• Parties: McKENZIE CONST. CO. v. CITY OF SAN ANTONIO et al.
• Court: Texas Court of Appeals

Page 349

50 S.W.2d 349

McKENZIE CONST. CO. v. CITY OF SAN ANTONIO et al.

No. 8801.

Court of Civil Appeals of Texas. San Antonio.

April 20, 1932.

Rehearing Denied May 25, 1932.

Appeal from District Court, Nueces County; W. B. Hopkins, Judge.

Action by the McKenzie Construction Company against the City of San Antonio and others. From a judgment for defendants, plaintiff appeals.

Reversed and remanded.

Dodson & Ezell, of San Antonio, and Kleberg & Eckhardt and H. R. Sutherland, all of Corpus Christi, for appellant.

Templeton, Brooks, Napier & Brown, of San Antonio, Boone & Raymer and Tarlton & Lowe, all of Corpus Christi, and T. D. Cobbs, Jr., of San Antonio, for appellees.

POLK, Special Associate Judge.

On October 22, 1923, the commissioners of the city of San Antonio, by ordinance duly enacted, ordered an election to be held within said city for the purpose of submitting to its qualified taxpaying voters, among others, the proposition of borrowing money on the credit of the city and issuing bonds therefor in the total principal sum of $2,800,000, to be expended for the purpose "of improving the San Antonio River, San Pedro and Alazan Creeks by widening, deepening, altering, changing and damming the channels thereof and constructing levees and walls along and near the same, and building dams, dykes and reservoirs at and near the headwaters and the water sheds of said river and creeks and tributaries thereof, all in a permanent manner, so as to prevent or ameliorate flood conditions and protect the public health and safety, and to acquire any lands and other property necessary therefor; said improvements to be constructed being the widening, deepening, altering, changing and damming of the channels of the San Antonio River, San Pedro and Alazan Creeks, and constructing levees and walls along and near the same, and building dams, dykes and reservoirs at and near the headwaters and the water sheds of said river and creeks and tributaries thereof, all in a permanent manner and acquiring any lands and other property necessary therefor."

This move was prompted by a then recent flood of the San Antonio river, still fresh in the memories of the citizens, that had wrought great disaster in the city. On December 4, 1923, the election was held pursuant to said order and the proposition carried, whereupon, on December 10, 1923, the city commissioners duly enacted an ordinance carrying into effect the will of the voters; said ordinance providing for the borrowing of the money on the credit of the city, the issuance of the bonds for the purposes above set forth in quotations, to be denominated "Flood Prevention" bonds, the printing of the bonds, to mature serially within a period of forty years; further providing that "the proceeds on said bonds when sold shall be deposited with the Depository of the City and used under the direction of the City Commissioners to provide for the construction of the permanent public improvements and purposes as hereinabove set forth," and further levying a tax for the year 1923 and succeeding years for the purpose of paying the interest on said bonds and to provide a sinking fund to pay the same when matured. The bonds were subsequently sold, the city receiving therefor in principal, premium, and accrued interest the sum of $2,918,128.33.

Thereafter the city caused to be prepared plans and specifications for the construction of a concrete dam across Olmos creek, to be known as the "Olmos Creek Detention Dam," and thereupon advertised for bids for the furnishing of estimated quantities of labor and material, and all machinery and equipment necessary to construct said dam. Bids were required to be submitted on a printed form of proposal which was bound up with and attached to a copy of the advertisement, instructions to bidders, form of bond and contract, conditions of the contract, specifications, and referring to and making the plans a part thereof, all of which were prepared and furnished by the city.

It is proper to here note that Olmos creek is tributary to the San Antonio river, flowing into said river in the vicinity of Brackenridge Park, which park, is in the city. Appellant submitted a proposal in response to said advertisement, and on July 28, 1925, the city commissioners met with a committee of San Antonio citizens to consider the proposals submitted. Upon motion of Dr. Frederick Terrell, chairman of the Citizens' Committee, the committee recommended that "the contract for constructing the dam be awarded to McKenzie Construction Company." Whereupon the commissioners duly enacted an ordinance "that the attached proposition of the McKenzie Construction Company be and the same is hereby accepted, subject to proper and sufficient contract with adequate security in the judgment of the Commissioners be made."

Appellant, on August 7, 1925, entered into a contract with the city, the city executing same by its mayor, John W. Tobin, attested by its clerk, for the construction of the dam across Olmos creek, on the same date furnishing bond for the faithful performance of the contract with American Surety Company of New York, National Surety Company, United States Fidelity & Guaranty Company, and Fidelity & Deposit Company of Maryland, as sureties, and entered upon the construction of the dam. As the work progressed the city commissioners of San Antonio, upon estimates duly approved by Col. S. F. Crecelius, its flood prevention engineer, from time to time, paid unto appellant various amounts aggregating the sum of $352,541.68; each of such payments being authorized by ordinance duly enacted appropriating the money. The last of these payments was authorized by ordinance of February 14, 1927, wherein it was provided that the sum of $32,288.39 be appropriated out of the flood prevention fund to pay appellant "said payment to be without prejudice to the right of said McKenzie Construction Company to assert or prosecute any claims that said company may have against the City, and without prejudice to the right of the City to assert or prosecute any claims that the City may have against said McKenzie Construction Company." Previous to the enactment of this last ordinance the city commissioners also, on December 8, 1926, enacted an ordinance agreeing that "the turning over of the Roadway on the Olmos Dam to the City of San Antonio shall be without prejudice to the rights of either the contractor or of the City, under the contract between them for the construction of the Olmos Detention Dam."

Appellant instituted this suit on August 25, 1930, in Bexar county against the city of San Antonio and C. M. Chambers, its mayor, and Phil Wright, J. H. Rubiola, Paul M. Steffler, and Frank H. Bushick, its commissioners, as defendants, to recover the sum of $104,639.48 alleged to be due it upon an express contract which it claims was entered into by virtue of the facts hereinabove set forth, for balance due under said contract, against which appellant alleged unauthorized charges were made by the city and the engineer, said sum further including costs alleged to have been arbitrarily withheld from appellant and to have been imposed upon it as a result of wrongful acts of the city and its engineer. By agreement of the parties the venue was changed to Nueces county, where trial was had, and, after nine weeks thereof, the court peremptorily instructed the jury to return a verdict for the defendants, which was done and judgment rendered thereon accordingly. Appellant duly excepted to the court's action in granting appellees' motion for peremptory instruction, and the bill of exceptions pertinent thereto discloses that the instruction was granted "because the Court was of the opinion that the contract sued upon by plaintiff was absolutely void and incapable of ratification, and that the doctrine of estoppel plead and invoked by plaintiff was not applicable."

It is urged with much force and persuasion by appellees that the judgment of the trial court should remain undisturbed for the reasons that: (a) The contract that appellant claims to have been made with the city was void because not made or authorized by valid ordinance as required by the city charter; (b) the contract was void because no provision was made, at or before the making thereof, for the payment of the debt attempted to be thereby created, as required by the constitution, the statute, and the city charter; and that (c) the contract being void, it could not be validated by showing ratification or estoppel. We shall discuss these questions in the order presented.

Section 20 of the Charter of the City of San Antonio provides that "no contract on the part of the City shall be made or authorized, nor any money appropriated from the funds of the City * * * otherwise than by ordinance." Section 40 of the same instrument provides that "any debt hereafter contracted by any officer of the City, or by any person on account of the City, the payment of which has not been previously provided for by...