Summary
holding that where a city enters contract in excess of its statutory power, "the mere fact that the municipality has received the benefits of the contract which has been performed by the other party, does not make the municipality liable, either on the theory of ratification, estoppel, or implied contract, in order to do justice to the other party by paying the reasonable value of the property or services"
Summary of this case from Lamar Co. v. City of ColumbiaOpinion
December 12, 1941.
1. MUNICIPAL CORPORATIONS: Oral Contracts. Both the charter of Kansas City and Sec. 3349, R.S. 1939, require a contract of the city to be in writing. An oral contract is unlawful and void ab initio, and cannot be given force or vitality by ratification.
2. MUNICIPAL CORPORATIONS: Estoppel: Oral Contracts. The doctrine of estoppel is not applied to municipalities where the city had no power under any circumstances to make the oral contract sued upon.
3. MUNICIPAL CORPORATIONS: Void Contracts: No Analogy with Statute of Frauds. The doctrine of part performance as ousting the effect of the Statute of Frauds has no application. A contract within the Statute of Frauds is not void, but merely unenforcible, whereas the oral contract here involved is void because the city is prohibited from making it, and no performance on either side can make it enforcible.
Appeal from Jackson Circuit Court. — Hon T.J. Seehorn, Judge.
AFFIRMED.
Joe Levin, R.W. Cummins, Harold Waxman and Chas. N. Sadler for appellant.
(1) This contract is not within the Statute of Frauds because of possibility of performance within one year, and also because it was partially performed. Matthews v. Wallace, 178 S.W. 296, 104 Mo. App. 96; Suggett v. Carson, 26 Mo. 221; Brest v. Ver Steej Shoe Co., 70 S.W. 1081, 97 Mo. App. 137; Alexander v. Alexander, 52 S.W. 256; Nowak v. Berger, 34 S.W. 489; Foster v. McO'Blenis, 18 Mo. 88; Finch's Exrs. v. Hopewell, 148 S.W.2d 345; Harrington v. K.C. Cable Ry. Co., 60 Mo. App. 223; Pennsylvania Co. v. Dolan, 6 Ind. App. 109; Revere v. Boston Copper Co., 15 Peck. 351. (2) Respondent City was authorized under the law to make the contract sued on herein. Lober v. Kansas City, 74 S.W.2d 815; Whitsett v. St. Louis, 80 S.W.2d 696; 44 C.J. 1459, sec. 4667; St. L., I.M. S. Ry. Co. v. Anthony, 73 Mo. 431; Snyder v. St. Paul, 267 N.W. 249, 105 A.L.R. 168; Warren v. St. Paul, 5 Dill. 498; First Natl. Bank v. Emmetsburg, 138 N.W. 451; State ex rel. Fuller v. Martin, 43 N.W. 244; Clough v. Verretta, 109 A. 78; O'Brien v. New York, 160 N.Y. 691; Multnomah County v. Carstens, 122 P. 999. (3) Contract may be made by officer or agent of City. Art. III, Sec. 22, City Charter; City of Tulsa v. Natural Gas Co., 234 P. 588; City of Seattle v. Dutton, 265 P. 729; Hoskins v. City of DeSoto, 35 S.W.2d 964; 44 C.J. 97; 19 R.C.L. 1060. (4) Oral contract for life employment is legal. Harrington v. K.C. Cable Ry. Co., 60 Mo. App. 223; Pennsylvania Co. v. Dolan, 6 Ind. App. 109; Revere v. Boston Copper Co., 15 Peck. 351; Slobin v. St. L. Car Co., 102 S.W.2d 939. Labbatt's Master Servant (2 Ed.), 332, sec. 91; Printing Co. v. Graphite Comp. Co., 150 Mo. App. 383; Boggs v. Laundry Co., 86 Mo. App. 616. (5) Respondent had power to and did ratify contract. State ex rel. Carthage v. Cowgill Hill Milling Co., 156 Mo. 620; West Virginia Coal Co. v. St. Louis, 25 S.W.2d 466; St. L., I.M. S. Ry. Co. v. Anthony, 73 Mo. 431; 43 C.J. 892. (6) Respondent City is estopped to deny validity of contract. Simpson v. Stoddard County, 173 Mo. l.c. 466; State ex rel. Carthage v. Cowgill Hill Milling Co., 156 Mo. 620; West Virginia Coal Co. v. St. Louis, 25 S.W.2d 466; City of Houston v. Finn, 149 S.W.2d 1000, 1003.
William E. Kemp, City Counselor, John R. James and J. Gordon Siddens, Assistant City Counselors of Kansas City, for respondent.
(1) Plaintiff's petition does not state a cause of action against the defendant, a municipal corporation, because it alleges an oral agreement. Such an agreement with a municipal corporation is void ab initio. The court, therefore, did not err in sustaining the defendant's demurrer. Charter of Kansas City, Art. IV, Secs. 92 and 94; Sec. 3349, R.S. 1939; 3 McQuillin on Mun. Corps. (2 Ed.), sec. 1281, p. 836; Woolfolk v. Randolph County, 83 Mo. 501; Montague, etc. Air Co. v. Fulton, 166 Mo. App. 11, 148 S.W. 422; Likes v. Rolla, 184 Mo. App. 296, 167 S.W. 645; Mullins v. Kansas City, 268 Mo. 444, 188 S.W. 193; Brown Coal Co. v. New Madrid, 208 S.W. 109; Iowa Bonding, etc. Co. v. City of Marceline, 255 S.W. 577; Carter-Waters Corp. v. Buchanan County, 129 S.W.2d 914. (2) The petition does not allege that Thomas Boyle, who it is alleged made the oral agreement on behalf of Kansas City, was authorized, in writing, to make an agreement with the plaintiff, nor does it allege that Boyle was head of a department (and he was not, in fact) of the City and authorized by the Charter to enter into contracts on behalf of the City. In the absence of such authorization even a written contract executed by Boyle would not be binding upon the City. Charter of Kansas City, Art. IV, Secs. 92 and 94; Sec. 3349, R.S. 1939; Savage v. Springfield, 83 Mo. App. l.c. 329; Haskins v. DeSoto, 35 S.W.2d l.c. 967; Atwill v. City of Richmond, 132 S.W.2d l.c. 673. (3) Where, as in this case, a contract is void, the City could not create a contract by ratification and could not ratify an oral agreement by anything less formal than is required by the statute (R.S. 1939, sec. 3349). Keeping the plaintiff on its payroll and paying wages to him subsequent to the date of the alleged oral agreement does not constitute ratification. Keating v. City of Kansas, 84 Mo. 415; Savage v. Springfield, 83 Mo. App. 323; Anderson v. Ripley County, 181 Mo. 46, 80 S.W. 263; Iowa Bonding Casualty Co. v. City of Marceline, 255 S.W. 577; Atwill v. City of Richmond, 132 S.W.2d 672. (4) There is no estoppel in this case because the plaintiff (appellant) could not be misled to his damage, being bound to know that the City could not contract except in the mode required by law. Mullins v. Kansas City, 268 Mo. 444, 188 S.W. 193; Iowa Bonding Casualty Co. v. City of Marceline, 255 S.W. 577; West Virginia Coal Co. v. St. Louis, 25 S.W.2d 466.
This is an action for breach of an oral contract. The petition charges that in 1926 plaintiff was injured while employed by Kansas City in its water department. In 1928 he became totally disabled because of the injuries. He then entered into an oral contract with an agent of the city by which it was agreed the city would keep him on the payroll and pay him his monthly salary for life in settlement of his claim arising from his injuries. In accordance with such oral contract he received monthly payments until July, 1940, but the city has refused to make subsequent payments. He asks for $22,747.76 on the basis of his life expectancy. The city's demurrer to such petition was sustained and plaintiff has appealed.
By express mandate of both statute and charter, respondent city is prohibited from making an oral contract. (We take judicial notice of respondent's charter. Const. Art, IX, Sec. 16.) Section 92 of Article IV of its charter provides that all contracts shall be in writing; Sec. 3349, R.S. Mo. 1939, states: "No county, city, town, village, school township, school district or other municipal corporation shall make any contract . . . unless such contract . . ., including the consideration, shall [707] be in writing and dated when made, and shall be subscribed by the parties thereto, or their agents authorized by law and duly appointed and authorized in writing."
An oral contract made by any county or municipal corporation in violation of this statute is void. [Mullins v. Kansas City, 268 Mo. 444, 188 S.W. 193; Savage v. Springfield, 83 Mo. App. 323; Montague Compressed Air Co. v. Fulton, 166 Mo. App. 11, 148 S.W. 422; Likes v. Rolla, 184 Mo. App. 296, 167 S.W. 645.] For failure to comply with this statute generally see Aquamsi Land Co. v. City of Cape Girardeau, 346 Mo. 524, 142 S.W.2d 332. Such a contract being unlawful and void ab initio cannot be given force or vitality by ratification. [Eureka Fire Hose Mfg. Co. v. City of Portageville (Mo. App.), 106 S.W.2d 513.]
Judge McQUILLIN states the general rule to be "that if a contract is within the corporate power of a municipality but the contract is entered into without observing certain mandatory legal requirements specifically regulating the mode in which it is to be exercised, there can be no recovery thereunder. If a statute or charter says that certain contracts must be let to the lowest bidder, or that they must be made by ordinance, or that they must be in writing, or the like, there is a reason therefor based on the idea of protecting the taxpayers, and inhabitants, and these provisions are mandatory, and while it is undoubtedly true that mere irregularities in making the contract are not fatal to a recovery, yet if the contract is entered into or executed in a different manner, the mere fact that the municipality has received the benefits of the contract which has been performed by the other party, does not make the municipality liable, either on the theory of ratification, estoppel, or implied contract, in order to do justice to the other party by paying the reasonable value of the property or services." [McQuillin, Municipal Corporations (2 Ed.), sec. 1283.]
It is true, as appellant urges, that the doctrine of estoppel applies to municipalities as well as to natural persons and private corporations when necessary to prevent a manifest injustice. But as to municipalities it is applied cautiously because of the public interest involved. [State ex inf. McKittrick v. Missouri Utilities Co., 339 Mo. 385, 96 S.W.2d 607.] Nevertheless, it is a well recognized rule that the doctrine of estoppel is not applied in cases such as this where the city had no power under any circumstances to make the oral contract in question. "Vain and futile would Constitution and statutes and charter be if any officer of the State, or of a county, or of a city, or other municipality, could follow them only when he saw fit. If by estoppel such salutary provisions, enacted with wise foresight as checks upon extravagance and dishonesty, can be utterly abrogated at will by any officer, such provisions then subserve no purpose . . ." [Mullins v. Kansas City, supra.]
Nor may a void contract be likened to a contract within the Statute of Frauds where part performance ousts the application of the statute. The latter is not prohibited from being made but is only prohibited from being enforced. It is not void, it is simply unenforcible. [Kansas City v. O'Connor, 82 Mo. App. 655.] The contract before us is void because the city is prohibited from making it and no performance on either side can make it enforcible.
The rules of law governing this case, established for the public good, doubtless impose a severe hardship on appellant. However one may not deal with those representing municipal governments without taking notice of the limitations of their powers and authority.
The judgment dismissing the petition is affirmed. All concur.