Rittenhouse v. Mayor of Baltimore

Bartol, J., delivered the opinion of this Court. The bill of exceptions in this case presents the question of the liability of the appellee, upon a contract made with the appellant, for brick-mason’s work and materials to be done and furnished in the erection of an alms-house. The contract ivas made under an ordinance of the city, approved April 28th, 1860, which provided for the purchase of a site and the erection of a new alms-house. After the buildings had been commenced and some work done by the contractors, an ordinance ivas passed and approved on the 5th of April, 1861, reciting that a farm had been purchased from A. W. Goldsboro ugh for the site of anew [346] alms-house-, which is now ascertained not to he suitable or adapted for the purpose, because it is unhealthy; and declaring that the public good required the building to he discontinued, and the site to he abandoned, and another more suitable to be selected. It repealed the ordinance of 1860, and directed the committee having charge of the work to settle with the contractors, as far as it could be done, uj>on fair and equitable terms. No settlement having been made with the appellant, he brought this action to recover damages for a breach of the contract made with him by the appellee. By the hill of particulars filed he claimed: 1st. His actual outlays in the preliminary steps for executing the contract, $500.00. 2nd. An indemnity against his liabilities towards those with whom he had contracted, to enable him to fulfil his contract with the city, $7,500.00. 3rd. Damages equivalent to the profits which he would have realized on said contract with the city if he had been permitted to execute the same, $20,000.00. In considering the rights, powers and liabilities of public municipal corporations, in respect to contracts made by them, regard must he had to the subject matter to which such contracts relate, and the character in which the municipal body acts in making them. "Where the corporation appears in the character of a mere property holder, and enters into a contract with reference to such property as any private citizen or other proprietor might do; or where it engages in an-enterprise, not necessarily connected with or growing out of its public capacity, as a part of the local government; there-all its rights and liabilities are-to he measured and determined by the same rules as govern mere individual persons, or private corporations; and it cannot claim exemption or immunity from the legal liabilities growing out of its contracts347 by reason of its public municipal character. The cases of Bailey vs. The Mayor, &c., of New York, 3 Hill, 531. Masterton vs. The Mayor, &c., of Brooklyn, 7 Hill, 61, and The Western Saving Fund Society vs. The City of Phila., 31 Pa., (7 Casey,) 175 & 185, are illustrations of this principle. See, also, Moodalay vs. The East India Company, 1 Brown's Ch. R., 469. The same cases recognize a distinction between the rights and liabilities of municipal corporations growing out of contracts made by them, in their private capacity, as property holders, and those which arise out of the exercise of powers entrusted to them in their municipal character exclusively for public purposes, with regard, to which Courts have no power to review or control their acts, unless they transcend the limits of their delegated powers. In the case of The Presbyterian Church vs. The Mayor, &c., of New York, 5 Cowen, 538, which was an action by the church against the city upon a covenant for quiet enjoyment, the corporation had conveyed lands to the plaintiff for the purpose of a church and cemetery, with a covenant for quiet enjoyment; afterwards the corporation, in the exercise of a pow'er delegated to it by an Act of the Legislature, passed a by-law prohibiting the use of the lands as a cemetery. It was held that this was not a breach of the covenant which entitled the plaintiff to damages, but was a repeal of the covenant. It was held that a municipal corporation cannot, by contract, abridge its legislative power. The ground of the decision was, that while the liability of “the defendants upon the covenant was the same as if it had been entered into by an individual, the effect of the by-law upon it was the same as if this had been an Act of the State Legislature.” The rule as stated in 3 Salk., 193, was applied, viz: “If H. covenants to do a thing which is lawful, and an Act of Parliament comes in and hinders him from doing it, the covenant is repealed.” And though the corporation had enter [348] ed into the covenant, it was not, for that reason, prevented from passing the by-law or estopped from relying upon it in defence; because in passing the by-law it acted in its public legislative capacity, in which its powers could not be abridged by any previous covenant into which it had entered. The principles of that decision were afterwards re-affirmed, by the same Court, in Coates vs. The Mayor, &c., of N. Y., 7 Cowen, 585, and have been recognized and approved by this Court in State, relation of McClellan, vs. Graves, 19 Md. Rep., 351. Applying these principles to the case before us, we have been led to the following conclusions; 1st. That the subject matter of the erdinance of 1860, under which the contract sued on was made, was one over which the appellee possessed jurisdiction and power to legis.late, and that consequently the repealing ordinance of 1861 was valid as passed in the exercise of the powers belonging ■to the appellee in its public, political or municipal character. 2nd. That -the contract must be taken and construed as being made subject to the power of the corporation to repeal the ordinance of 1860, and to abandon or discontinue the work if, in their judgment, the public good so required, and consequently the appellant is not entitled to claim any damages on account of profits he might have realized under the contract if he had been permitted to go on with the work; and the evidence offered at the trial, for the purpose of supporting the third item of damage in the bill of particulars, vas properly rejected by the Court below. We a.re also of opinion that there was no error in rejecting the evidence with regard to damages claimed in the second item of ,the bill of particulars -as indemnity against any loss to which the appellant may have become liable by reason of his subsidiary contracts with White and Irons, for the reason that the evidence on that subject is vague and indefinite, [349] and there was no proof offered of any damage actually incurred by reason thereof. We concur, also, generally in the views expressed by the judge of the Superior Court as to the right of the appellant to recover under, the first item of claim in the bill of particulars, any damage which lie had actually sustained by reason of the contract, while the same was operative and in force. There was proof offered that the appellant had been, for fifteen years, engaged in the manufacture of bricks near the city of Baltimore, and that at the date of the contract he had on hand 600,000 bricks of his owp manufacture, which were of ready sale in the market, but which he retained in hand in consequence of the contract, and to enable him to supply bricks necessary for the work. That after the repealing ordinance had been passed, and he received notice thereof, he sold the bricks at prices averaging about one dollar and fifty cents per thousand less than he could have realized by a sale of them in November, 1880. Unquestionably, that item of loss and damage, if found by the jury, would be properly recoverable in this action. And some parts of the instruction of the Court below are susceptible of a construction which would allow the appellant to recover in respect to this item. The instruction does not seem to have been so construed by the appellant’s counsel; and there is one expression in the Court’s instruction that might mislead the jury in regard to this item of claim; — the appellant was limited to recover “any damage which he had actually sustained by reason of the contract, and before the enactment of the repealing ordinance.” With regard to the damage resulting from the loss in the sale of the bricks, it might be said that it had not been actually sustained till they were sold, which was after tbe repealing ordinance had been passed, and thus, under the instruction, the jury may haye considered it as excluded. Copsideririg that this dam [350] age, ü found by the jury, was one actually suffered under the contract while it was in force, although the amount of it was not ascertained till afterwards, and ought to be allowed, and believing the jury may have been misled by the language of the Court, we think there ought to be a new trial, and will, therefore, reverse the judgment and award a writ of procedendo. (Decided July 11th, 1866.) Judgment reversed, amd procedendo awarded.