Neosho City Water Company v. City of Neosho

• Decision Date: 23 December 1896
• Parties: Neosho City Water Company v. City of Neosho, Appellant
• Court: Missouri Supreme Court

38 S.W. 89

136 Mo. 498

Neosho City Water Company v. City of Neosho, Appellant

Supreme Court of Missouri

December 23, 1896

Appeal from Barton Circuit Court. -- Hon. D. P. Stratton, Judge.

Affirmed.

O. L Cravens and George Hubbert for appellant.

(1) In cases like this, of alleged municipal contracts, based on election and special vote by the people, under a statute, the authority to make them could not exist apart from the expressly voted assent to the contract. The vote and proposition constitute the very charter of authority with its limitations. The right to give or withhold the authority, in the very nature of the case, implies and involves the right and power to impose conditions in the contract made or to be made. And this principle is so immutable that not only municipal agents but the municipalities themselves by second election, and even the state legislatures, are held powerless to dispense with contracted conditions; otherwise they might thus practically make new contracts. Clark v Rosedale, 12 S. Rep. (Miss.) 600; Board, etc., v Walbridge, 38 Wis. 179; Hodgman v. Railroad, 20 Minn. 48; Richeson v. People, 5 N.E. (Ill.) 121; Eddy v. People, 20 N.E. 83; Bank v. Franklin Co., 128 U.S. 526; Cooper v. Sullivan Co., 65 Mo. 542, 545; Platteville v. Railroad, 43 Wis. 493; People v. Waynesville, 88 Ill. 469; Casey v. People, 24 N.E. 570; State ex rel. v. Court, 64 Mo. 30; Onstott v. People, 15 N.E. 34; Wagner v. Meety, 69 Mo. 150; State v. Montgomery, 74 Ala. 226; Black v. Cornell, 30 Mo.App. 641. (2) That the city officers had no power to waive, surrender or suffer estoppel of any contracted rights of the city, its voters and taxpayers, by attempted acceptance or use of the waterworks, out of time and with deficient power, as they were, would seem clear, from the principal underlying the text and cases above mentioned. But those authorities are not all by any means. McGillivray v. Barton Tp., 65 N.W. 974; St. Louis v. Gorman, 29 Mo. 593; State v. Bank, 45 Mo. 528; McKissick v. Mt. Pleasant, 48 Mo.App. 416; Noel v. San Antonio, 33 S.W. 263; State ex rel. v. Murphy, 31 S.W. 784. (3) It is a general rule in a court of law that a specified time is as much the essence of the contract as is the manner of performance. Lawson on Contracts, sec. 407; Bishop on Contracts, sec. 1344; Railroad v. Levy, 17 Mo. 501. (4) In contracts like the one in question the voters must themselves first specify or specifically assent to the particular amount or rate. They can not delegate to the city officers the power to subsequently make the same definite and certain, and so repose in them a trust the legislature designed to withhold. R. S. 1889, secs. 1947, 1948, 1949, 1656; Mercer v. Railroad, 27 Pa. St. 389; State ex rel. v. Saline Co. Court, 45 Mo. 242; Katzenberger v. Aberdeen, 121 U.S. 172; Hill v. Memphis, 134 U.S. 198; Richardson v. McReynolds, 114 Mo. 641; Norton v. Dyersburg, 127 U.S. 160. (5) No debt can be lawfully contracted for a city, in the absence, at the time, of the power to provide means, and of the means provided for payment by taxation. Biddle v. City, 18 S.W. 691; Waco v. McNeil, 29 S.W. 1109; Cook v. City, 48 N.W. 828; Terrel v. Dessant, 71 Tex. 770; Gould v. City, 4 S.W. 650; Loan Ass'n v. Topeka, 20 Wall. 660. (6) Where there is a valid express modification of the terms of a previous contract, or waiver of performance of its conditions by the agreement of parties, it is so far changed in its identity -- so far made a new contract -- that it can not be the ground of action and recovery, as on an express contract, without being declared upon as it stands in the new form, to which changed by such modification; it can not even be pleaded in the new form by way of reply. Lanitz v. King, 93 Mo. 513; Mohney v. Reed, 40 Mo.App. 99; Alcorn v. Railroad, 108 Mo. 81; Ninman v. Suhr, 64 N.W. 1035; Harrison v. Railroad, 50 Mo.App. 332; Rucker v. Harrington, 52 Mo.App. 487. (7) It is a well settled rule of construction of grants by the legislature to corporations, whether public or private, that only such powers and rights can be exercised under them as are clearly comprehended within the words of the act, or derived therefrom by necessary implication, regard being had to the object of the grant. Any ambiguity or doubt arising out of terms used by the legislature must be resolved in favor of the public. Minturn v. Larue, 23 How. 435; Trenton v. Clayton, 50 Mo.App. 535; Knapp v. Kansas City, 48 Mo.App. 485; St. Louis v. Bell Tel. Co., 96 Mo. 623.

Jas. H. Pratt and Thurman & Wray for respondent.

(1) The city of Neosho, by a vote of two thirds majority, has the authority to contract a debt in excess of the "income and revenue" for any year, provided such debt does not exceed five per cent of the assessed valuation of such city. The contract sued on contemplates an annual indebtedness, and having been authorized by a vote of two thirds majority under express authority of law, is not in violation of section 12, article 10, of the constitution of 1875, even if such contemplated indebtedness does exceed the annual income and revenue of the city of Neosho. A contract contemplating a debt which is valid when made by a city, will not be rendered invalid by such city using the funds for other purposes, with which it was intended such debt should be paid. Reynolds v. Norman, 114 Mo. 509; Bryson v. Johnson, 100 Mo. 76; Beach on Pub. Corp., sec. 707, and cases cited. (2) A literal compliance with the terms of the contract is not required; a substantial compliance is all that the law requires. Railroad v. Tygart, 84 Mo. 263, and cases cited; Hovey v. Pitcher, 13 Mo. 191; Phillips v. Gallant, 62 N.Y. 264; Noland v. Whitney, 88 N.Y. 648. (3) The contract sued on, authorized by a vote of the people of the city of Neosho, vested in the board of aldermen of said city authority to determine for said city whether or not the system of waterworks was constructed and completed in the time and manner contemplated by the contract, and the right and power to accept the same. The board of aldermen having exercised that authority and accepted the works, such acceptance is binding on both parties until set aside for fraud. Chapman v. Railroad, 114 Mo. 542; Williams v. Railroad, 112 Mo. 463; Brady v. Mayor, etc., 30 N.E. 757. (4) Time is not the essence of this character of contracts unless it clearly appears that it was so intended by the parties. Time is not generally considered the essence of a contract in equity, and this rule has been adopted by most of the code states. Lawson on Contracts, secs. 406, 407, and 408; Bishop on Contracts, secs. 1347, 1348, and 286; Benjamin on Contracts, 140, and cases cited; Sanford v. Weeks, 38 Kan. 319; Carlin v. Cavender, 56 Mo. 286; Railroad v. Tygart, 94 Mo. 263; Milton v. Smith, 65 Mo. 322. (5) There was a substantial compliance with the contract on the part of Saleno in constructing the system of waterworks, and it was properly accepted by the board of aldermen. Railroad v. Tygart, 84 Mo. 263; Railroad v. Atkinson, 17 Mo.App. 490; Hovey v. Pitcher, 13 Mo. 191; Phillip v. Gallant, 62 N.Y. 264; Noland v. Whitney, 88 N.Y. 648. (6) If it was true that the contract was intended to bind the city for an additional term of twenty years on the expiration of the first twenty years, it would not be void for that reason. Such provision would clearly be severable and not invalidate other provisions of the contract. The valid part is not so dependent upon the invalid as to make the one essential to the other. Carroll v. Campbell, 108 Mo. 561; Hitchcock v. City, 96 U.S. 344; Daniels v. Tearney, 102 U.S. 415; 2 Parsons on Contracts, 800; Field on Corporations, 273; Bishop on Contracts, sec. 392; 1 Dillon on Mun. Corp. [3 Ed.] secs. 421 and 422; Cooley's Const. Lim. [4 Ed.], 215; State v. Clark, 54 Mo. 36; Ensworth v. Curd, 68 Mo. 285; St. Louis v. Railroad, 89 Mo. 44; St. Louis v. Railroad, 14 Mo.App. 221; Danes Co. v. Dickinson, 117 U.S. 657. (7) The contract, after performance by plaintiff, constituted a debt payable on a "written contract" within the meaning of the statute, and it bears interest from the date fixed in the contract when payment should be made. The amount and the time for payment is fixed by the contract, and the court properly required interest to be paid on the several amounts payable. Sec. 5972, R. S. 1889.

OPINION

In Banc.

Burgess J.

Action by plaintiff as assignee of S. V. Saleno on a contract entered into between said Saleno and defendant for hydrant rental, by which the defendant was supplied with water, at a stipulated price, from July 1, 1892, to January 1, 1895.

The case was tried in the circuit court of Barton county where it had been taken by change of venue from Newton county. As the result of the trial plaintiff recovered judgment in the sum of $ 8,424.45, from which judgment defendant appealed.

Defendant is a city of the fourth class and by ordinance number 113, approved September 22, 1890, provided for the construction and maintenance of waterworks in said city, and contracted for a supply of water for the use of defendant for a term of twenty years, upon condition that the same should be ratified by a two thirds majority of the legal voters of said city, at a special election to be held for that purpose. A special election was held in said city for that purpose on the fifteenth day of October, 1890, in pursuance of an ordinance of the city, number 114, at which ordinance number 113 was ratified and approved, more than two thirds of the qualified voters of said city voting therefor.

Thereafter on day of , 1890, defendant by its officers and agents entered into a contract in writing with said S. V. Saleno for the construction and maintenance of a system of waterworks in defendant city; and to supply...