Stigall v. City of Taft

Citation58 Cal.2d 565,25 Cal.Rptr. 441
CourtUnited States State Supreme Court (California)
Decision Date23 October 1962
Parties, 375 P.2d 289 Owen STIGALL, Jr., Plaintiff and Appellant, v. CITY OF TAFT et al., Defendants and Respondents. S. F. 20906.

Mack, Bianco, King & Eyherabide, Dominic Bianco and H. C. Mack, Jr., Bakersfield, for plaintiff and appellant.

Stanley Mosk, Atty. Gen., and Dan Kaufmann, Asst. Atty. Gen., amici curiae on behalf of plaintiff and appellant.

Henry G. Baron, Taft, Borton, Petrini, Conron, Brown & Condley, James Petrini and J. Richard Thomas, Bakersfield, for defendants and respondents.

Henry B. Ely, Los Angeles, amicus curiae on behalf of defendants and respondents.

WHITE, Justice.

This is an appeal by plaintiff from a judgment of dismissal entered upon demurrers to the complaint which were sustained without leave to amend. Plaintiff seeks a declaration of the invalidity of a certain contract for plumbing work to be perfcrmed by the defendant Taft Plumbing Company, Inc., for the defendant City of Taft.

Plaintiff, a taxpayer of the City of Taft, alleges in his complaint that Glenn D. Black was a member of the city council and was in charge of the council's building committee of the City of Taft for several years prior to June 8, 1961; that the committee supervised the drawing of plans and specifications and the call for bids for the construction of a civic center; that during a portion of the times involved Councilman Black was also the owner of a plumbing business known as the Taft Plumbing Company and later the owner of more than three per cent of the shares of stock of the Taft Plumbing Company, Inc., after its incorporation; that in January 1961 bids were received and opened at a regular meeting of the city council; that the Taft Plumbing Company, Inc., was the low bidder for plumbing work; that several persons objected to the bids by the plumbing company on the ground that Glenn D. Black was a member of the council and its building committee; that the council thereupon elected to reject all bids and to readvertise for bids at a later date; that on June 5, 1961, new bids were received and opened at a regular meeting of the city council; that the Taft Plumbing Company, Inc., was again the low bidder for plumbing work; that a special meeting was called for June 8, 1961 for the purpose of awarding the contract for the civic center building; that on June 8, 1961, at said meeting, the resignation of Glenn D. Black as a member of the council was received and accepted, and that thereafter at said meeting the council voted to award the contract for construction of the civic center to the defendant Bakersfield Construction Company, which said contract included the sub-bid by the Taft Plumbing Company, Inc., for plumbing work.

The prayer asks that '* * * the contract of Taft Plumbing Company, Inc. * * * be declared void,' and that the city officials be restrained '* * * from disbursing or paying over to defendant, Taft Plumbing Company, any funds of the City of Taft on account of plumbing work performed on said Civic Center building.'

Demurrers to the complaint alleging that it failed to state facts sufficient to constitute a cause of action were filed by the various city officials named as defendants and the Taft Plumbing Company, Inc. The trial court, in sustaining the demurrers, stated: 'It appearing that the complaint cannot be amended to state a cause of action the demurrers are sustained without leave to amend and the action ordered dismissed.'

For purposes of ruling on the demurrers, of course, the allegations of the complaint pleaded in proper form are to be taken as true. (Katenkamp v. Union Realty Co., 6 Cal.2d 765, 769, 59 P.2d 473; Terry v. Bender, 143 Cal.App.2d 198, 201, 300 P.2d 119.) Plaintiff's sole contention for the invalidity of the contract, insofar as the subcontractor for plumbing work is concerned, is that because Black was an official of the city a conflict of interest existed which, under statutory law, prohibited the making of a valid contract as between him or his plumbing company and the city. No claim is made that actual improprieties were practiced by Black, the city or the various city officials in the submission or acceptance of the plumbing company's bid during Black's actual tenure of office or thereafter. Nor is it claimed that the contract is unfair or unjust or not beneficial to the city.

The statutory provisions with which we are concerned are found in the Government Code, and it appears that there are two applications thereof either of which, it is urged, invalidate the instant contract. Section 1090 of article 4 (Prohibitions Applicable to Specified Officers) of chapter 1 of division 4 (Public Officers and Employees) in title 1 of the Government Code provides in part: 'Members of the Legislature, state, county, special district, judicial district, and city officers shall not be interested in any contract made by them in their official capacity, or by any body or board of which they are members. * * *' Section 1092 provides that: 'Every contract made in violation of any of the provisions of Section 1090 may be avoided at the instance of any party except the officer interested therein. No such contract may be avoided because of the interest of an officer therein unless such contract is made in the official capacity of such officer, or by a board of body of which he is a member.'

In section 36525 of chapter 1 (Officers in Sixth Class Cities) of division 3 of title 4 (Government of Cities) is it provided in part: 'City officers shall not be interested in any contract made by them in their official capacity, or by any body or board of which they are members. * * *' Section 36527 then provides: 'Any contract made in violation of Section 36525 may be avoided at the instance of any party except the officer interested in the contract. No such contract may be avoided because of the interest of an officer therein unless such contract is made in the official capacity of such officer, or by a board or body of which he is a member.'

The issue presented by the statutory provisions and the contentions of the parties all relate to the timing of Black's resignation with respect to the 'making' of the contract. It is contended by defendants, and amicus curiae in support thereof, that as Black's resignation was effective before an agreement was 'made' in the strict contract sense Black was therefore no longer within the class of those who could not enter into a proper contract with the city at the time when the rights and duties of the parties came into being pursuant to the city's acceptance. We must...

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