State v. City of Sapulpa
| Decision Date | 10 October 1916 |
| Docket Number | 7679. |
| Citation | 160 P. 489,58 Okla. 550,1916 OK 861 |
| Parties | STATE EX REL. WEST, ATTY. GEN., v. CITY OF SAPULPA ET AL. |
| Court | Oklahoma Supreme Court |
Syllabus by the Court.
A proposition to buy a series of municipal bonds aggregating $260,000, for $260,000, not including coupons for accrued interest, which proposition is construed by the city as an offer to purchase said bonds at par and accepted as such constitutes a complete contract leaving nothing open for future negotiations.
Where an original contract does not contemplate the making of a subsequent supplemental agreement, the original consideration will not support such subsequent agreement, and a subsequent supplemental agreement not forming a part of the original contract or supported by the original consideration thereof or a new consideration, is void as between the parties.
By section 964, Revised Laws of 1910, it is provided that in contracts between a public officer or body as such and a private party, where uncertainty exists, it is presumed that such uncertainty was caused by, and the language of the contract should be most strongly interpreted against, the private party.
Persons dealing with a municipality do so with notice of its powers and the authority of its officers, and where a person purchases certain bonds from a city, not including coupons for accrued interest thereto attached, and said coupons are wrongfully delivered with the bonds purchased, such delivery does not convey any interest or right therein, and the city is not estopped thereby to deny liability thereon as against the purchaser or other person with notice.
Where coupons for accrued interest upon certain municipal bonds were wrongfully delivered to the purchaser of said bonds, who paid no consideration therefor, the fact that a tax was levied for the payment thereof does not estop the city to deny liability thereon or contest the validity thereof in the hands of a holder with notice.
Where at the time a bank acquired certain coupons for interest upon municipal bonds same were detached and were past due, the bank took such coupons subject to any defense against them that existed.
Where the bank commissioner assumes possession of a state bank, he does not take the assets thereof for value and without notice, but subject to all claims and defenses that might have been interposed against the bank had it continued under its corporate management.
Error from District Court, Creek County; Tom D. McKeown, Judge.
Petition by the State, on relation of Chas. West, Attorney General for mandamus to the City of Sapulpa and another. Judgment for defendants, and relator brings error. Affirmed.
S. P. Freeling, Atty. Gen., and McDougal, Lytle & Allen and Pryor & Rockwood, all of Sapulpa, for plaintiff in error.
R. B. Thompson, of Sapulpa, and Asp, Snyder, Owen & Lybrand, of Oklahoma City, for defendants in error.
The state, upon the relation of the Attorney General, filed suit in the district court of Creek county seeking mandamus against the city of Sapulpa and C.J. Wertzberger, commissioner of finance of said city, directing the payment of certain interest coupons found among the assets of the Farmers' & Merchants' Bank when taken in charge by the bank commissioner. Defendants answered by general denial, and put in issue the title and good faith of plaintiff to the coupons in question. Trial resulted in judgment for defendants, and plaintiff appeals.
The city of Sapulpa prior to January, 1910, had made provision for the issuance of $200,000 waterworks bonds, $50,000 sewer bonds, and $10,000 fire apparatus bonds. The bonds were dated January 1, 1910, but were, in fact, delivered to purchasers some time in June, 1911, and this litigation arose over coupons representing interest claimed to be due before the bonds were in fact issued and delivered.
The contract between the city and the purchasers of the bonds is represented by the following written negotiations. The proposition to purchase is as follows:
"For two hundred thousand ($200,000) dollars legal issue waterworks bonds, fifty thousand ($50,000) dollars sewer bonds, and ten thousand ($10,000) dollars fire apparatus bonds, of Sapulpa, Oklahoma, delivered in Kansas City or Chicago, at our option, dated January 1, 1910, maturing twenty years from date without option, and bearing interest at the rate of 5 per cent. per annum payable semiannually, both principal and interest payable at the Oklahoma fiscal agency in the city and state of New York, bonds to be in the denomination of one thousand dollars, we will pay $260,000. * * *"
This proposition is dated February 13, 1911, and was considered and accepted by the city commissioners at a special meeting held on that date for the purpose of acting thereon, and the minutes show that the following proceedings were had:
"On motion by Murphy and second by Rice that we accept the offer for the proposed bond issue from Sutherlin & Co., of Kansas City, Mo., for the bonds at par, and we give him 5 per cent. commission when contract is passed and agreed upon by the city attorney."
This motion was carried, and thereupon adjournment was had until 7:30 p. m. of the same day, when the following proceedings were had:
"On motion by Rice and second by Murphy that the contract for the purchase of the bonds with Sutherlin & Co. of Kansas City, Missouri, be accepted and the mayor instructed to sign the same."
This motion was adopted, and the clerk was instructed to notify R. J. Edwards that the bonds were sold. The proposition submitted by Sutherlin & Co. bears this indorsement:
On February 14th a petition was circulated among the business men of Sapulpa to ascertain their preference as to whether the accrued interest on said bonds, together with a commission of 5 per cent. for selling same, should be paid to the buyer. This petition was signed by a number of business men who indicated their preference thereon, and a call was issued by the president of the board for a special meeting of the city commissioners at 2 o'clock p. m. of that day, "for the purpose of drawing a contract with Sutherlin & Co., of Kansas City, Mo., to provide for paying a commission to said person or firm above named for the sale of the water, sewer, and fire apparatus bonds." At this meeting "the president of the board and the city clerk were authorized to sign the commission contract with Sutherlin & Co., of Kansas City, Mo., for the 5 per cent. commission," and thereafter a communication was addressed to Sutherlin & Co. agreeing, in view of their purchasing said bonds, to accompany the same, when legally issued and delivered, with a good and sufficient certified check for 5 per cent. of the amount of bonds as a commission in placing said issue of bonds, the check to be delivered upon payment of the purchase price of the entire issue.
Upon this record plaintiff insists that the coupons for accrued interest were sold and delivered, and that it is entitled to collect the amount thereof. The proposition of February 13th and its acceptance constituted a complete contract for the sale of said bonds at par, not including the coupons in question, and upon the face thereof nothing was left open except that the contract should be passed and agreed upon by the city attorney, which was done, and the acceptance thereof in writing executed on behalf of the city on that date The proposition was to pay $260,000 in money for the total issue of bonds aggregating $260,000 par value. No mention was made of coupons for accrued interest, and the city expressly accepted the proposition for the bonds at par. The rule is that, where bonds draw interest from their date, and are not disposed of until after that date, a sale thereof at par must include a sum equal to the face value of said bonds and the accrued interest attached. Dillon, Mun. Corp. § 895. The fact that the amount paid for said bonds equaled the face value thereof without accrued interest, and that no...
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