The State ex rel. Ford v. Ellison

• Decision Date: 30 April 1921
• Citation: 230 S.W. 637,287 Mo. 683
• Parties: THE STATE ex rel. FORD et al. v. JAMES ELLISON et al., Judges of Kansas City Court of Appeals
• Court: Missouri Supreme Court

230 S.W. 637

287 Mo. 683

THE STATE ex rel. FORD et al. v. JAMES ELLISON et al., Judges of Kansas City Court of Appeals

Supreme Court of Missouri

April 30, 1921

Record quashed.

Craven & Bates for relator.

(1) The decision of the Kansas City Court of Appeals both in its literal language and by construction of its meaning is a holding that the bond contemplated by the city ordinance is a bond, the whole penalty of which would be forfeited if the work of constructing the sewer was not completed within ninety days, and in this respect is contrary to the following decisions of this court. Burnside v. Wand, 170 Mo 531; Burns v. Webster, 16 Mo. 258; St. Louis v Parker-Washington Co., 271 Mo. 229; Foundry Co. v Const. Co., 200 Mo.App. 33; Nichols-Shepard Co. v Beyer, 168 Mo.App. 693; Light, Heat & Power Co. v. Independence, 188 Mo.App. 157; Buchanan v. Exposition Co., 245 Mo. 350; Cochran v. Ry. Co., 113 Mo. 364; Fidelity & Deposit Co. v. Schuchan, 189 Mo. 468; Wand v. Ryan, 166 Mo. 646; State to use v. Ruggles, 20 Mo. 100. (2) The decision is a holding that the city council cannot vary the form of bond required by ordinance to protect the city where a contract is let for constructing a public improvement paid for by tax-bills and that the city cannot insert therein provision for liquidated damages and is contrary to the decision of the Supreme Court of this State. St. Louis v. Von Phul, 133 Mo. 567; Heman v. Gillian, 171 Mo. 258; Sheehan v. Owens, 82 Mo. 450. (3) The decision of the Court of Appeals holds that where an ordinance provides that the construction of the sewer must be completed within ninety days from the date of the contract for building the sewer and that a bond shall be given that will be forfeited if the sewer is not completed within time, and where the city then enters into a contract and bond contained in the same document both with provisos that the contractor shall be liable for liquidated damages if the work is not completed within the time specified -- that in such case the tax-bills are not rendered void by the clause in the contract providing for liquidated damages but are so rendered by other clauses in the same document defining the liability of the bondsmen. In this holding a decision of the Court of Appeals is contrary to the decisions of this court in the case of: Gist v. Const. Co., 244 Mo. 389; Excelsior Springs v. Ettenson, 120 Mo.App. 215.

Culver, Phillip & Voorhees for respondents.

WALKER, C. J. Woodson, J., dissents in separate opinion.

OPINION

In Banc.

Certiorari.

WALKER C. J.

Certiorari to quash the record of the Kansas City Court of Appeals. A judgment on certain sewer tax-bills had been rendered in the circuit court in favor of relators and against the Excelsior Springs Light & Water Company. Upon an appeal this judgment was reversed by the Court of Appeals. Its rulings are alleged to contravene certain decisions of the Supreme Court. The core of the controversy is in the difference between the terms of the ordinance authorizing the work and those of the contract and bond for the faithful performance of same. This is, of course, to be determined from the opinion; correlative facts on which the Court of Appeals bases its ruling are referred to only as aids in more clearly understanding the Court's conclusions.

The ordinance, so far as concerns the matter at issue, provides that the "successful bidder shall give a good and sufficient bond in a sum equal to the contract price for the construction of the sewer and laterals, to be forfeited if he shall fail to complete the work of constructing the said district sewer and laterals under his contract within ninety days from the execution thereof."

The contract provides that: "6. The work embraced in this contract shall be begun within ten days after the contract binds and takes effect and shall be prosecuted regularly and uninterruptedly thereafter with such force as to secure the full completion within ninety working days from the date of its confirmation, and the time of beginning, rate of progress and time of completion being essential conditions to this contract. And if the contractor shall fail to complete the work within the time above specified, an amount equal to the sum of four and no/100 dollars per day for each and every day thereafter, until such completion, shall be deducted as liquidated damages for such breach of this contract from the amount of the final estimate of said work."

The bond, which is embodied in the contract, wherein the contractors were the parties of the first part, a liability company, as surety, was the party of the second part, and the City of Excelsior Springs was party of the third part, is, so far as relevant here, as follows:

"Said party of the second part hereby guarantees that the said party of the first part will well and truly perform the covenants hereinbefore contained; to pay for the work and all labor of all laborers and teamsters, teams and wagons, employed on the work, and for all materials used therein or any part thereof which shall not be paid for by said first party within ten days after the money for such work, labor and materials becomes due and payable, and this provision shall entitle any or all laborers and teamsters and owners of teams and wagons who may do work, and parties who may furnish materials on or for the improvements to be done under this contract, to sue and recover from the said second party, by said first party; but said second party shall not be liable on this guarantee on account of materials used and labor done upon said work beyond the sum of thirty-four hundred forty and 25/100 ($ 3,440.25) dollars, the estimated costs of materials used and labor done upon said work. And the said party of the second part hereby agrees with the city of Excelsior Springs that the said party of the first part will well and faithfully perform each and all of the terms and stipulations in the foregoing contract to be done, kept and performed on the part of the said first party, but said party of the second part shall not be liable hereon beyond the sum of thirty-four hundred forty and 25/100 ($ 3,440.25) dollars.

"And the said party of the second part hereby further agrees with the city of Excelsior Springs, that if the work embraced in the contract be not begun within ten days after this contract binds and takes effect, and prosecuted regularly and uninterruptedly, thereafter in accordance with the terms and provisions thereof with such force as to secure its full completion within ninety working days from the date of its confirmation, they will pay to the city of Excelsior Springs the sum of four and no/100 dollars per day, as liquidated damages for such breach of this contract."

More briefly stated, under the ordinance it is provided in general terms that a forfeiture of the bond is to follow a failure to perform the work within the time stipulated; while, under the contract, of which the bond is a part, the provisions as to the forfeiture are specifically stated in that the liability company as surety for the contractors binds itself to hold the city of Excelsior Springs harmless from all the defaults of the contractors therein specified, in a sum not exceeding the total contract price, except as to the time within which the work is to be performed; as to this, if the limitation is exceeded, for each day the contractors are in default the surety agrees to pay the city of Excelsior Springs four dollars as liquidated damages.

The work contemplated was completed within the time stipulated and in other respects it met the full measure of the contractors' obligation. There is no ground for complaint, therefore, arising between the contracting parties. The malcontent in the original action whose rights the Court of Appeals attempted to determine was a local corporation which refused to pay its proportionate part of the expense incurred in this undertaking, which expense was levied in the form of sewer tax-bills. The improvement effected was one of public necessity, uniformly recognized in all centers of population as promotive of health. While this fact should not and will not control in the interpretation of the Court of Appeals opinion, other than as authorized by its unmistakable terms, the nature of the transaction cannot but cause the reviewer to look upon it with no unkindly eye and to scrutinize with discriminating care any construction the result of which will be to destroy the benevolent purpose intended. This does not mean that the rights of individuals are to be disregarded, but that a wise discretion such as is always present when the law is properly administered, shall be exercised in determining the limit of their protection, which should not be extended except in the presence of an unfair burden illegally imposed.

The portions of the opinion immediately pertinent to the matter at issue are as follows:

"The contractor gave a bond in the sum of the contract price, but it did not provide that it should be forfeited if the work was not completed within ninety working days, but it provided that if it was not completed within that time $ 4 per day should be paid to the city as liquidated damages for each day over the ninety days that the work was not completed. . . . But we think there is merit in the contention that there was no bond given that the work should be completed within ninety days, and that if the work was not completed within that time the bond should be forfeited. The provisions of the bond were that it should not be forfeited, but that only $ 4 per day should be paid for each working day that the work was not completed after ninety days. The council passing the ordinances authorizing the work regarded it as material that the work...