Opinion
No. 13,125.
Decided May 21, 1934. Rehearing denied June 12, 1934.
Action for value of architectural services rendered a municipality. Judgment for plaintiff.
Reversed.
1. MUNICIPAL CORPORATIONS — Public Works — Contracts — Competitive Bids — Quantum Meruit. Under pertinent Denver charter provisions, contracts for architectural services in connection with the erection of public buildings must be awarded under competitive bidding, otherwise they are void, and the contractor cannot recover for services rendered either under his contract or on quantum meruit.
2. Contracts — Official Powers. If the powers of a municipality or its agents are subjected by statute or charter to restrictions as to the from and method of contracting that are limitations upon the power itself, the corporation cannot be held liable by either an express or implied contract in defiance of such restrictions.
Error to the District Court of the City and County of Denver, Hon. E. V. Holland, Judge.
Mr. JAMES D. PARRIOTT, Mr. FREDERICK P. CRANSTON, Mr. KARL C. BRAUNS, for plaintiff in error.
Mr. WILLIAM E. HUTTON, Mr. BRUCE B. McCAY, for defendant in error.
ACTION for value of architectural services rendered by defendant in error's deceased husband in the matter of the construction of certain public buildings by plaintiff in error. We shall refer to him as the architect and to plaintiff in error as the city. The plaintiff had judgment for $3,501.50, and on the theory it should have prevailed, the city assigns error.
It appears that by direction of the city's building inspector, the architect, licensed, prepared plans for three public structures, the West Side Court Building, the Tubercular Hospital, and the Cody Memorial; that the city availed itself of the architect's services, at least to a considerable extent, and paid $1,500 on account thereof, leaving a balance, based on what was said to be usual and customary fees, of $14,358. It does not appear that bids for the work the architect performed were asked or given in accordance with the provisions of section 28 of the City Charter, Municipal Code, 1927, or at all, nor is it claimed that his employment was pursuant to such provisions; hence, the city argues, recovery is precluded. The plaintiff counters that the services, being professional in character, do not come within the charter provision, and in any event, the record considered, he is entitled to the value of his services. In its solution the trial court said: "There is no question that these services were not authorized by law; it is an ultra vires act," but, "where the city has received a benefit from even an ultra vires act," the court added, "recovery can be had upon quantum meruit."
The charter provision relied on by the city, so far as pertinent, reads as follows: "All contracts for local improvements, and all other contracts involving expenditures under the direction of the board, shall be let by the mayor, upon recommendation of the board, without any action of the council, except in the passage of the original ordinance authorizing the improvement or contracts. All such contracts shall be let to the lowest reliable and responsible bidder, after public advertisement by the board for not less than ten days in some newspaper of general circulation, published in the city and county. Any other mode of letting such contracts shall be illegal and void, * * *."
In a case determined subsequent to the trial under review, we held that the charter provision just quoted applied to services rendered the city by architects, and any contract for such services, to be legal, must have its genesis there. We said, "bids must be received." Johnson-Olmsted Realty Co. v. Denver, 89 Colo. 250, 1 P.2d 928. The case is recent and in point. We cited there, and commenced again, Colorado Springs v. Coray, 25 Colo. App. 460, 139 Pac. 1031. Examination shows the case is not subject to the inherent weakness claimed by counsel for the architect. The trial judge's remarks indicate that he apprehended the binding force of the charter provision, and consequent illegality of the contract of the architect's employment; and, as we analyze his summation, had it not been for his further view that notwithstanding such illegality the city was bound, as by implication, to respond for the value of the architect's services, the judgment would have been favorable to the city. It remains to examine that angle of the problem.
The claim that quantum meruit lies is well negatived in Colorado Springs v. Coray, supra. There Coray, as to the character of whose services no criticism attended, superintended the construction of a public building which the municipality erected, but his right of recovery was denied because instead of securing the employment through competitive bidding, as the statute required, he acted under the direction of the chairman of the city's committee on public buildings and grounds. The court's conclusion, which we regard as sound, that since the employment was not authorized the value of Coray's services could not be made the basis of recovery, is amply supported by authorities reviewed. Emphasizing the necessity of holding those dealing with municipalities to have regard for the law governing their employment, and not failing to appreciate the apparent hardship involved, not lacking or overlooked here, the court said: "While in this case to apply the strict letter of the law may work a hardship upon the plaintiff, it is far better that one man should suffer pecuniary loss than that a rule should be adopted destructive of statutory safeguards." "The city itself," said the Pennsylvania court, "much less any of its subordinate officers, or committee, had no power to make an agreement to pay for such work on the rule of a quantum meruit. We may regret that the plaintiff acted unadvisedly, but to assist him in this hard case would lay the axe at the root of the system which imperatively requires all municipal work of this character to be done by the lowest and best bidder." Addis v. City of Pittsburgh, 85 Pa. St. 379. In Town of Durango v. Pennington, 8 Colo. 257, 7 Pac. 14, the municipality had let a contract for grading a street. The contractor performed as agreed, the work was accepted and a portion of the contract price paid. To an action brought to recover the balance the municipality interposed the defense that the contract had not been let according to the statute. The court found that the statutory requirements had not been observed, and holding the contract was void, said: "We understand the law to be well settled, that when the mode of proceeding in respect to transactions of this nature is prescribed by law, or in the charter of a municipal corporation, such mode must be strictly pursued by the corporation in relation to the awarding and making of contracts, or no liability is thereby incurred. The party dealing with a municipal body is bound to see to it that all mandatory provisions of the law are complied with, and if he neglects such precaution he becomes a mere volunteer, and must suffer the consequences. * * * It follows from the foregoing rules of decision, that if the defendant corporation was limited by law to a specified mode of contracting indebtedness for the making of street improvements, and such mode was not observed in the awarding and making of the contract in question, nor in its subsequent ratification, that no recovery thereon can be had against the corporation. In such case it matters not that the work may have been well done, and that the defendant may have the full benefit thereof." This case is cited with approval in Sullivan v. City of Leadville, 11 Colo. 483, 18 Pac. 736, and in City of Leadville v. Sewer Co., 47 Colo. 118, 107 Pac. 801. In the latter case the court said: "No case in this court, as we understand, goes to the extent of holding that the rule that both parties to an ultra vires contract are in pari delicto, applies to municipal corporations, but the rulings in this jurisdiction have always been to the contrary. * * * If the rule were otherwise then all statutory and constitutional restrictions upon the authority of municipal officials could, under certain conditions, be avoided by the plea of estoppel."
The case of Mountjoy v. School District, 78 Colo. 162, 240 Pac. 464, cited by counsel for the architect, is distinguishable, as indeed is declared in the case itself. Speaking of the Colorado Springs v. Coray case, the court said: "In that case the law required certain contracts to be let to the lowest bidders, and plaintiff did not obtain his contract in that manner." That is the precise situation here. The architect, to have had an enforceable contract, must needs have obtained the employment through successfully bidding in accordance with the charter provision already quoted. As we have seen, this was not done.
"The prevailing rule undoubtedly is that if the powers of a municipality of its agents are subjected by statute or charter 'to restrictions as to the form and method of contracting that are limitations upon the power itself, the corporation cannot be held liable by either an express or an implied contract in defiance of such restrictions.' The theory on which these cases are decided is that if any substantial or practical results are to be achieved by the restrictions upon the powers of municipal officers or boards to incur liabilities, as contained in the statutes or charter, no recovery on an implied contract can be allowed, notwithstanding there may be apparent injustice in some cases in adhering strictly to the statute or charter provisions. `It is better that an individual should occasionally suffer from the mistakes of public officers or agents, than to adopt a rule which, through improper combination or collusion, might be turned to the detriment and injury of the public.'" 3 McQuillin Municipal Corporation (2d Ed.), p. 851.
The action here does not involve the power and authority of the city to construct the buildings mentioned, which it undoubtedly had, but does involve a contract of employment entered into in violation of express charter provision. To uphold it, directly or indirectly, would make nugatory a provision binding on all concerned. In adjudging otherwise the court erred.
Let the order be that the judgment is reversed, dismissal of the case to be entered.
MR. JUSTICE HOLLAND not participating.
MR. JUSTICE BOUCK dissents.