Lee v. Board of Com'rs

WANTY, District Judge, after making the foregoing statement of. the case, delivered the opinion of the court. The provisions of the statutes of the state of Ohio relating to the-purchase and erection of bridges were not complied with by the county commissioners before entering into the contracts with the Canton Bridge Company, and it is conceded by both parties to this suit that they were invalid, and no recovery could be had upon them, nor upon the warrants given in payment, for any part of the purchase price of the bridges. These statutes authorizing the purchase and erection of bridges by county commissioners have been before the supreme court of Ohio, which has held that a contract made for the purchase and erection of a bridge in disregard of the statutes on that subject is void, and no recovery can be had against the county on the contract, or for the value of such bridge; that the commissioners, having no power to bind the county except as provided by the statutes, could not, by accepting and retaining a bridge under a void contract, bind the county to pay what it is reasonably worth; and that, when both parties have acted in disregard of the statutes, the court will leave them where they have placed themselves, and refuse to aid either. Bridge [746] Co. v. Campbell, 60 Ohio St. 406, 54 N. E. 372. The appellee contends that the supreme court of Ohio in that case has announced as the public policy of the state that no court of law or equity will grant relief to parties who have entered into- a contract in disregard of its statutes, and quotes the language of Judge Burket, saying: “Whatever the rule may be elsewhere, in this state the public policy, as indicated by our constitution, statutes, and decided eases, is that, to bind the state, a county, or city for supplies of any kind, the purchase must be substantially in conformity to the statute on that subject, and that contracts made in violation or disregard of such statutes are void, not merely voidable, and that courts will not lend their aid to enforce such a contract directly or indirectly, but will leave the parties where they have placed themselves. If the contract is executory, no action can be maintained to enforce it, and, if executed on one side, no recovery can be had against the party on the other side. * * * It is necessary to so construe the statutes in order to prevent the evils which induced the enactment of them. If such statutes could be evaded, there would always be found some public servants who would be ready and willing to join in transactions detrimental to the public, but favorable to themselves or some favored friend; and, if public officers should be ever so honest, some persistent agent or salesman would impose upon them, and obtain more out of the public treasury than is justly due. When the provisions of the statute are followed, and all is done openly and publicly, the public interests are best conserved; and even then there is often complaint to the effect that some one has been favored.” If this language is susceptible of the construction claimed for it by the appellee, it could have no binding force in a federal court sitting in equity. Bucher v. Railroad Co., 125 U. S. 555, 582, 8 Sup. Ct. 974, 31 L. Ed. 795. But it has no application to the suit at bar. There is no attempt in this case to enforce these contracts, directly or indirectly, or to collect the value of the bridges under an implied promise to pay for them. The supreme court of Ohio has not declared it to be the public policy of the state to allow its municipal officers to induce people to part with their property, and then set up its want of power to pay for it, and thus appropriate it, because it has been able to deceive the persons who furnished it, relying on the ability of the municipality to bind itself. It has announced that contracts made by a municipality in disregard of the statutes of the state are absolutely void, and will not lay the foundation for a recovery of any part of the price stipulated for in the contract; and that a municipality cannot bind itself to pay what property is reasonably worth when it is furnished, in disregard of the statutes. But while the law affords no remedy, equity, although it will not enforce the contract or create a contract between the parties on account of the acceptance and retention of the property, when the property is in existence, and in the hands of the defendant, will not allow it to retain that to which it has no title whatever, and prevent the owner from reclaiming it. The case presented by the bill shows no moral turpitude in the transaction, and, although the bridge company should have ascertained whether each step provided by the statutes had been properly taken, the law placed upon the defendant the duty of taking those steps. It was necessary for it to comply with every provision of the statutes in that behalf before entering into these contracts, and it represented to the bridge company that it had so complied, and thus misled the bridge company into entering into the agree [747] ment, the carrying out of which placed these bridges in the hands of the defendant. The complainant has no remedy at law, and to deny him equitable relief would be to enforce the contract on the part of the bridge company, and to allow the defendant to repudiate its part of the same contract, and thereby appropriate, without compensation, property to which it had no legal or equitable right. It was said by the federal supreme court in the case of Marsh v. Fulton Co., 10 Wall. 676, 684, 19 L. Ed. 1040, 1043: “The obligation to fio justice rests upon sill persons, natural or artificial; anfi, i£ a county obtains the money or property oi! others without authority, the law, independent of any statute, will -compel restitution or compensation.” If there was any fraudulent purpose of the bridge company, or connivance on its part at the action -of the defendant in disregarding the provisions of the statutes, so that the purpose for which those provisions were enacted should be thwarted, then neither the bridge company nor this complainant could come into a court of equity and ask any relief, as they could not come into court with clean hands; and the relief would be denied for that reason, and not on the doctrine of the public policy of the state. There is no public policy recognized by the courts which allows any person, natural or artificial, to take the property of another, and appropriate it to its own use, and deny to the person who is innocent ©f fraud the right to reclaim it. As there was no contract binding on -either party in this case, and there was no fraud on the part of the bridge company or this complainant, and the property is ⅛ existence and ⅛ the hands .of the defendant, it seems clear that the relief asked for should be granted. The case seems to come entirely within the principles laid down by the supreme court in the case of Chapman v. Douglas Co., 107 U. S. 348, 2 Sup. Ct. 62, 27 L. Ed. 378. See, also, Wrought-Iron Bridge Co. v. Town of Utica (C. C.) 17 Fed. 316. The decree sustaining- the demurrer should be reversed, and the demurrer overruled, with leave to defendant to answer.