Pryor v. Kansas City

IN DIVISION ONE. VALLIANT, J. This is a suit to recover damagesMLleged to have been sustained by the plaintiff for breaches of a contract with the defendant city for the construction of a portion of what is called O. K. Creek sewer within the city. There are three breaches of the contract alleged, but since the finding and judgment were for the defendant on two of them and the plaintiff has not appealed we are concerned only with that one on which plaintiff recovered, which consists of the failure of defendant to pay the balance claimed to be due for work done. By the terms of the contract monthly estimates were to be furnished the plaintiff by the city engineer in charge of the work as the same progressed, which the city was to pay monthly, except fifteen per cent to be retained until the completion of the work and then paid to plaintiff. Eive such estimates were furnished, on which the fifteen per cent thus retained amounted to $1,302.03, which with interest was the sum for which there was a finding and judgment for the plaintiff in the circuit court. The points of defense which are really insisted upon are that certain provisions of the city charter imposing restrictions on the city officials in the matter of making such contracts were not observed. These charter provisions are as follows: Sec. 30, art. IV. “The common council shall not appropriate money for any purpose whatever in excess of the revenue of the fiscal year actually.collected and in the treasury at the time of such appropriation and unappropriated. Neither the common council nor any officer of the city .... shall have authority to make any contract or do any act binding Kansas City, or imposing upon said city any liability to pay money until a definite amount of money shall first have been appropriated for the liquidation of all pecuniary liability of said city under said contract, or in consequence of said act; — 140 — and the amount of said appropriation shall be the maximum limit of the liability of the city under any such contract.... and said contract or act shall be db initio null and void as to the city for any other or further liability. Any member of the? common council who shall knowingly vote for any appropriation of money or the making of any contract in violation of this charter .... shall be guilty of a misdemeanor,” etc. Sec. 2, art. III. “No appropriation or payment shall be made from any revenue or fund account in excess of the amount actually collected and in the treasury. Within the first month of each fiscal year the mayor and common council shall, by ordinance, as far as practicable, make all necessary apportionments of the revenue to be raised for such year to the expenses of the several departments, and for all public works, under proper headings, and for such other objects as it may be necessary to provide for. All ordinances that contemplate the payment of any money shall, upon the second reading, be referred to the appropriate committee of the house in which such ordinances are introduced, who shall obtain the indorsement thereon of the comptroller, to the effect that sufficient unappropriated means stand to the credit of the fund or revenue account therein mentioned to meet the requirements of such ordinances, and that the same is in the treasury, or it shall not be lawful to pass the said ordinances.” In making the contract sued on there was no attempt to follow the requirements of those two sections of the charter, and if they should have governed the contract in suit, the plaintiff can not recover. But the plaintiff insists that the above mentioned sections of the charter have nothing to do with this case, and that the contract is bottomed on the following section of the amended city charter and the proceeding thereunder, to wit, section 44 of article NYII: “Sec. 44. The common council may by ordinance within the limitations and in conformity to the Constitution of the State, submit to the qualified voters of the city, at any — 141 — special or general election a proposition to issue by the city, bonds to an amount not exceeding five hundred thousand dollars ; provided, that such bonds shall not be sold for less than their par value, and shall not bear mozre than five per cent interest per annum, and provided further, that three-fifths of the proceeds arising from the sale of such bonds shall be applied to the construction of a city hall within the city, and two-fifths thez’eof shall be applied to the construction of public sewer or sewers in the city; and provided further, that the common council shall, in the ordinance submitting such proposition to issue bonds, expressly designate the location of the city hall, and the location as near as practicable of the public sewer or sewers, to the construction of which the proceeds of said bonds shall be applied.” Under this section 'an ordinance known as ordinance No. 100 was passed calling a special election to vote on the proposition to issue bonds of the city to the amount of $500,000, of which three-fifths of the proceeds were to be devoted to the buildizzg of a city hall and the remaining two-fifths to the construction of the O. K. Creek sewer. The ordinance complied with all the requirements of the section of the charter last above quoted in detail; the election was duly held July 31, 1889, and resulted in favor of the proposition. The bonds contemplated were issued and sol'd at a premium, the proceeds of two-fifths of the same amounting to $203,147.20, were set apart by the officers of the city to the credit of what was known as the O. K. Cheek sewer fund. Afterwards and in pursuance of the general scheme indicated in ordinance No. 100, ordinance No. 3190 was passed definitely establishing a portion of the sewer contemplated, and directing the board of public woz*ks to Jet the contz’act for the construction of the same, the work to be divided into sections and the contracts awarded accordingly. In accordance with this authority the board of public works entered izzto the contract with plaintiff sued on, for the buildizzg of one of the sections, to-wit, section 4, called for in the ordinance. The — 142 — estimated cost of the work under plaintiff’s contract was $52,915. This contract was confirmed by the common council by ordinance No. 3390. Prior to this contract there had been other sections of the sewer constructed under other contracts, and paid for out of the O. K. Creek sewer fund above mentioned, and when the plaintiff’s contract was entered into thei e was still in the city treasury to the credit of this fund $108,833.24. The work that was actually done by the plaintiff under his contract as shown by the five estimates furnished him by the city engineer, amounted to $25,695, upon which he received $21,392.97. At the time the fifth estimate was furnished him there was in the treasury $68,058.17, belonging to this special O. K. Creek sewer fund. After the cessation of the plaintiff’s work, the city let the contract for the completion of that section of the sewer to one Sechested who finished it and the city paid him therefor $35,336.78. The petition alleges that the defendant prevented the plaintiff from completing his contract. This was denied in the answer, and it was therein charged that the plaintiff had wrongfully abandoned his contract. On this issue of fact there was evidence adduced on both sides and the finding was for the plaintiff; there was sufficient evidence to support that finding and it will therefore not be reviewed here. The question for our consideration is, was the contract sued on invalid because it was not made in observance of the provisions of section 30 of article IV, and section 2 of article III, of the city charter above quoted. By the express terms of the contract sued on, the city charter and ordinances are to be considered a part of it, and, as contended for by the city counselor, this would have been so in effect without such express provisions; for one who contracts with city officers is bound to know at his peril the extent of their power, and if the contract is one they are forbidden — 143 — to make, it is not binding on the city. [Cheeney v. Brookfield, 60 Mo. 53.] Tlie strict construction of the charter provisions contended for by the learned counsel is fully sustained by the authorities cited in his brief: Keating v. Kansas City, 84 Mo. 415; Mister v. Kansas City, 18 Mo. App. 217. In the Keating case it was sought to hold the city liable for certain street grading done under a contract founded on a defective ordinance. The contract called for payment in special tax-bills which were issued, but which proved to be worthless because of the defect in the ordinance. It was held that the defective ordinance was the result of a defective exercise of legislative power, that Keating was bound to know that the ordinance was defective, and that the city officers had no authority to found a contract on it. Hence the city was not liable. In the Mister case a section of the then city charter similar to section 30 of article IV, above quoted, was construed. The amount appropriated, by the ordinance in that case was. $10,000; the contract was let under the ordinance, but when the work was done it amounted according to contract prices to $11,560, and it was insisted by the contractor that the work was of a character that its actual cost could not be calculated until it was done, and that the spirit of the charter provision would be satisfied with the manifest effort to comply with it and that its letter should not defeat the plaintiff’s just demand. But the court held that the express terms of the charter were too plain for such a construction, that the amount appropriated expressed the “maximum limit of the city under the contract,” that the contractor when he entered into th'e contract must know that whilst the cost of the work might not reach the sum appropriated yet in no event could it go beyond, at the city’s expense. That was a correct construction of the charter provision as applied to that case. But in that case the contract was made to be satisfied out of the general revenue of the city, and it was subject to the — 144 — charter provisions guarding the revenue. The court in its opinion by Hall, J., treated the charter provision in question as related to the city’s current revenue. “One of the prime objects contemplated by the legislature in the enactment of the-defendant’s charter under discussion, was to prevent the city’s expenditure for any year exceeding the revenues of that year. This object is made perfectly clear in the beginning of the section.” Section 1 of article III of the charter provides that, “The mayor and common council shall have the management and control of the finances and all other property . . -. . belonging to the corporation, except as in this charter is otherwise provided, and likewise shall have power by ordinance . . . . to appropriate money -and to provide for the payment of the debts -and expenses of the city; .... to provide for the levying, assessment and collection of taxes,” etc. These are the provisions of the charter which give the mayor and common council the control of the city’s finances; and section 2 of article III, and section 30 of article IY, hereinbefore quoted, and relied on by defendant, contain the limitations on that control. But the language of the sections quoted, and their relation and necessary reference to each other, all show that the subject of the legislation was the general current revenues of the city, derived from taxation, funds over which the mayor and common council had control, which they could apportion and appropriate to the various exigencies incident to the conduct of the city’s affairs. But 'the contract in suit was not made in the course of business regulated by these charter provisions, and was not to be satisfied out of the revenues around which those guards were placed. This was a fund raised by the sale of bonds issued pursuant to the will of the people expressed at a special election called for the purpose and in conformity to the provisions of section 44 of article XYII of the amended charter. Both — 145 — by that charter provision and the ordinance under which the election was held and the vote of the people on the proposition, the funds realized from the sale of the bonds were apportioned and set apart for the particular purposes of building a city hall and the construction of this sewer, three-fifths to the one and two-fifths to the other. The only power the mayor and common council have to appropriate money is given in the •clairse of section 1 of article II above quoted, viz., “to appropriate money and provide for the payment of the debts 'and expenses of the city.” The other charter provisions on that subject are but limitations on that power. It would not be contended that under that clause the council could appropriate any of this money to the debts and expenses of the city other than those to be incurred for the purposes for which the fund was raised. The learned city counselor contends that the money was apportioned but not appropriated, and points out a distinction between an apportionment and an appropriation within the meaning of section 2 of article III, supra. [State ex rel. v. Mayor of Kansas City, 58 Mo. App. 124.] But, however that may be, the apportionment in this case was not made under that clause of the charter and was not made by the common council at all. In fact the whole proceedings show that the city officers, including those of the law department, treated this subject as not embraced within the restrictions on which the defendant now relies. The section of the charter itself (sec. 44, art. XYII) makes the apportionment and at the same time the appropriation, and places -the fund beyond the control of the common ■council either to apportion or to appropriate. By the express terms of this charter provision three-fifths of the proceeds of the bonds shall be “applied” to the building of the city hall, and two-fifths “applied” to the construction of the particular sewer designated and located in the ordinance under which the election is held. To appropriate is “to set apart for, or assign — 146 — to a particular person or use, in exclusion of all others.” To apply is “to use or employ for a particular’ purpose, or in a particular case; to appropriate, to devote, as to apply money to the payment of a debt” (Webster). Thus by the terms of this particular section of the charter, the ordinance passed in pursuance of it, and the vote of the people at the election held under the same, the proceeds of those bonds were put beyond the control of the common council either to apportion or appriate, and the provisions of the charter on which the city relies to defeat the plaintiff’s debt have no application to the contract in suit. There are several assignments of error, but in the main they rest on the same proposition, viz., that the contract was void because in conflict with the restrictions of the city charter contained in section 2 of article III and section 30 of article IV, and are disposed o-f in the above consideration of that proposition. The objections to the petition contained in the motion to strike out, to compel plaintiff to elect, and in arrest of judgment, were properly overruled. The petition contains but one cause of action. Several breaches of the same contract do not make several causes of action, and they should all be stated in one count. We find no error in the record. Therefore, the judgment of the circuit court is affirmed. Brace, P. J., and Robinson, J., concur; Marshall, J., dissents. IN BANC. Per Curiam: This cause was first heard and decided in Division No. 1 of this court and transferred for rehearing to the Court in Banc. After rehearing the cause the court adoj)ts the opinion written by Valliant, J., in. Division No. 1. In which opinion Gantt, G. J.,. Brace, and Robinson, JJ., concur. Burgess, Marshall and Sherwood, JJ., dissent.