Opinion
A town by acting specifically upon a matter divests its officers or agents of power and authority to contract other than in conformity to the vote of the town. The terms of the contract in the present case, entered into by the plaintiff with the selectmen of the defendant town for the construction of certain roads, held to be within the authority conferred upon the selectmen by the town votes, since the contract limited the work to be done to "the amount that may be reasonably constructed within the appropriations now made." The total price of the material to be furnished and services to be rendered by the plaintiff under the contract in suit was incapable of ascertainment at the inception of the contract and so remained until its completion, and the amount of construction which could be accomplished under the appropriation depended upon several indefinite elements, control of which was in the town, and the unexpended balance of the appropriation could, as of any given date, be determined only by the town's agents. Held that under these circumstances the plaintiff was not to be denied recovery for the amount due it under the contract, though such amount exceeded the unexpended balance of the appropriation. The amount found owing the plaintiff by the trial court consisted entirely of withheld percentages of progress payments — fifteen per cent of the amount ascertained by the town's engineer to have been earned from month to month by the plaintiff. Held that the obligation therefor accrued at the time of such ascertainment and partial payment, though payment thereof was deferred until sixty days after completion of the work, and the defendant is estopped, not having notified the plaintiff of the exhaustion of the appropriation, from denying liability for the amount of such withheld percentages.
Argued April 11th, 1930
Decided June 2d 1930.
ACTION to recover for services and materials furnished under a contract with the defendant, brought to the Superior Court in Fairfield County and tried to the court, Jennings, J.; judgment for the plaintiff and appeal by the defendant. No error.
On March 2d 1925, the town of Westport adopted resolutions authorizing its selectmen to arrange with the State Highway Commissioner for the building, by the State, of a "bituminous macadam pavement, eighteen feet in width, . . . or of any type of pavement approved by the selectmen and the State highway department" over certain designated portions of Weston Road, Cross Highway and Long Lots Road, in Westport; to issue "for the construction of said pavement" bonds to an amount not to exceed $205,000, and to also expend, if necessary, sums remaining from the sale of $100,000 bonds authorized for the Shore Road and not required for its completion. At a special town meeting held March 25th, 1926, it was voted to authorize and direct the selectmen to construct the pavement described in the vote of March 2d 1925, "or as much thereof as may be possible or necessary, . . . including in said construction program two new bridges over the Aspetuck and Saugatuck rivers, . . . said roads to be built under specifications approved by the selectmen and within the appropriations heretofore appropriated for road work at the meeting of March 2, 1925."
After advertising for and receiving bids, the defendant, on April 30th, 1926, entered into a contract with the plaintiff for the construction, on a unit price basis, of Weston Road, and of so much of Cross Highway and Long Lots Road "as can be constructed within the appropriations now made for the paving of Weston Road, Cross Highway Road and Long Lots Road, after making proper allowances from said appropriations for engineering expenses, the expense of building two bridges in a manner to be prescribed by the selectmen and such other expenses as are incidental and necessary in connection with the improvement of said roads; the amount of road work to be done on Cross Highway Road and Long Lots Road to be determined by the selectmen. The work on Cross Highway Road and Long Lots Road to be done in the same manner and on the same basis and at the same unit prices as the work on the Weston Road. The work to be done includes the construction complete of approximately 11,791 linear feet of road as specified for the Weston Road, but the length and width or any quantities may be varied at the discretion of the selectmen, and with respect to Cross Highway and Long Lots Road, the amount of work to be done shall be the amount that may be reasonably constructed within the appropriations now made, allowing for other expenses as aforesaid and subject to the discretion of the selectmen."
The contract also provided that if work ordered by the selectmen or their duly authorized representative is not classified in the unit prices submitted, it be paid for at cost plus ten per cent, and that partial payments be made as the work progressed, not later than the fifteenth day of each month, for the work done during the preceding month, equal to eighty-five per cent of the work done, as estimated by the town's engineer. The balance (fifteen per cent) was payable sixty days after the completion of the work.
The work on Weston Road was completed by July 1st, 1926, except two short portions which could not be finished until the two bridges which were being built by other parties were completed. On or about October 1st, 1926, specific directions were given by the defendant to the plaintiff that Cross Highway must be completed before the end of the season during which construction work could be pursued. Both Weston Road and Cross Highway were completed by December 1st and the construction work performed thereon by the plaintiff was inspected by the selectmen and accepted and approved by them. On November 30th the board of selectmen adopted a resolution that "Inasmuch as it now appears that the town appropriations for new roads will be equalled, if not exceeded, all work for which any charge can be made against the town, be stopped, except the matter of guard rails." From the dates of completion of the Weston Road and Cross Highway the defendant had the use and benefit of these roads and the work performed by the plaintiff under its contract.
The materials furnished and services rendered by the plaintiff in accordance with the contract and compensable on the unit basis amounted to $203,782.03 and the parties from time to time entered into agreements for materials and services in addition to those specified in the contract, computed on the basis of cost plus ten per cent, in the amount of $12,995.70, making a total of $216,777.73. The materials furnished and services rendered under the contract and for such extras were computed each month on a preliminary estimate by the town's engineer, and on the basis of such estimates monthly payments of eighty-five per cent of the amount so ascertained were made from May 15th to November 30th, aggregating $187,449.46. The total amount of materials furnished and services rendered by the plaintiff was determined by the defendant's engineer, after the completion of the work, and the percentage of the aggregate of the interim payments to the total amount as so finally determined by the engineer was found to be eighty-seven per cent. The unpaid balance of the total amount over the interim payments is $29,336, and this consists entirely of unpaid balances averaging thirteen per cent of the total materials furnished and services rendered during each of the several months between April 30th and December 1st.
After the completion of work by the plaintiff and determination, by the engineer, of the amount remaining due, the defendant, through its first selectman, refused to pay, giving no reason, at that time, other than a disagreement with the engineer relative to the work upon Cross Highway. Subsequently the defendant demanded certain repair work by the plaintiff, which the latter, although disputing the right of the defendant to require it, did at an expense of $2500. At no time prior to the completion of this repair work did the defendant advise the plaintiff that it intended to resist payment of the balance due, by reason of the claimed exceeding of the appropriation, but it afterward refused, on that ground, to pay the plaintiff. Other facts contained in the finding will be adverted to in the course of the opinion.
Raymond E. Baldwin, for the appellant (defendant).
David S. Day and Maurice E. Resnick, with whom, on the brief, was Jacob B. Klein, for the appellee (plaintiff).
The defendant interposed a special defense alleging that the town had expended for the construction of Weston Road and Cross Highway, including engineering, expenses of building two bridges, and other expenses incidental to and necessary in connection with the improvement of these roads, the sum of $230,556.65, which payments used up all of the funds appropriated and available for the purpose, and that the town had no funds appropriated to pay the claims set forth in the complaint. This defense is predicated upon the contention that the plaintiff was bound to take notice of the scope and limitations of the powers of the selectmen under the town votes of March 2d 1925, and March 25th, 1926, together with the provisions of §§ 58, 405, and 406 of the General Statutes, and to know, therefrom, that they had no authority to so contract as to involve the town in expenses, for the construction of these highways, in excess of the amounts of the appropriations made for that purpose. The general rule to this effect is undoubted and the soundness of the underlying reasons as applied to dealings with municipal officers and agents is obvious. Turney v. Bridgeport, 55 Conn. 412, 12 A. 520; Thomas Motor Car Co. v. Seymour, 92 Conn. 412, 103 A. 122; Lucier v. Norfolk, 99 Conn. 686, 695, 122 A. 711; 2 Dillon on Municipal Corporations (5th Ed.) § 775. A town by acting specifically upon the subject-matter divests its officers or agents of power and authority to contract other than in conformity to the vote of the town. Turney v. Bridgeport, supra, p. 416.
Here no question can be made that the terms of the contract entered into by the plaintiff, since it limited the work to be done to "the amount that may be reasonably constructed within the appropriations now made," was within the authority conferred upon the selectmen. However, the total price of the material to be furnished and services to be rendered by the plaintiff necessarily was incapable of exact ascertainment at the inception of the contract and must so remain, to some extent, practically until the completion of performance under it. The amount of highway construction work which could be accomplished depended upon several indefinite elements, including, so far as the plaintiff's performance was concerned, the discretion of the selectmen as limited by the votes of the town, and the lack of plans, specifications, and grades of Cross Highway, which were not prepared at the date of the contract but were furnished by the town engineer from time to time as the work progressed. Further, if we adopt the defendant's construction of the contract, there was to be taken into account the expense of building two bridges "in a manner to be prescribed by the selectmen" and (included in the expenses incidental and necessary in connection with the improvement of the roads) for property purchases for straightening and widening, also grading, bank walls, landscaping, etc., in lieu of land damages, and other similar expenses which could only be ascertained as the work went forward. In this respect the situation differs widely and essentially from that in Turney v. Bridgeport, supra, where the only contract expense chargeable against the appropriation other than that under the Turney contract was for heating, ventilation and plumbing, which contract price, it was observed, Turney either knew or could easily have ascertained, and must be treated as contracting with reference thereto.
The defendant's contention is, in effect, that it was not only the duty of the plaintiff to ascertain that its contract, when made, was within the authority of the selectmen (as it clearly was) but that it was also incumbent upon the plaintiff, at peril of loss of right to full compensation, to know the total amount available from or on account of the town appropriations, including the balance from the Shore Road, and incidental additions, and to so completely keep watch and check upon all of the expenditures made and obligations incurred by the town on account of the construction work and pertaining thereto, as to be informed when all such expenditures and obligations equalled and exhausted the moneys available through the appropriations. This involves an extension in application of the above mentioned principle of law far beyond Turney v. Bridgeport or any of the subsequent cases, and further than authority supports or reason dictates. The situation of the parties and the provisions of the contract itself render the imposition of such a requirement most illogical and unjust.
As we have seen, under the contract control of the amount of work to be done by the plaintiff, beyond the construction of Weston Road, as well as the specifications and other requirements materially affecting the cost of the work, resided entirely in the town, through its selectmen; the plaintiff's operations were under the constant supervision and direction of the selectmen and their representatives; the amount of the respective progress payments was dependant solely upon estimates made by the defendant's engineer; the selectmen, in specifically directing completion of Cross Highway, were within their rights under the contract, so far as plaintiff was concerned, and a refusal to comply would have constituted an apparent breach — this direction was more than misleading, it was, in fact, compelling.
Further, the means of knowledge or ascertainment possessed by the defendant, as to the total amount available, through additions to the amount of the special bond issue by balance from Shore Road account, premiums on bond sale, interest, etc., were, at least, vastly superior to those of the plaintiff. The unexpended balance in the appropriation account could, as of any given date, be determined only by ascertaining the expenditures made and all obligations incurred up to that time, and deducting the aggregate thereof from the total amount available under the appropriations. It is not too much to say that this could be done only by those (the defendant's agents) who alone had, or are to be presumed to have had, knowledge of all such expenditures and commitments. The plaintiff is hardly to be penalized, situated as it was, for failing to do that which, the event proves, the defendant with all its facilities and opportunities apparently was unable to do, or at least did not do, with even approximate accuracy, until after the appropriation actually had been exceeded. Indeed, the trial court has found it impossible to make such calculation as of any earlier date from facts proven by the defendant upon the trial.
We note, in passing, that it appears to be undisputed that payments aggregating about $14,000 were made to bridge contractors on and after December 1st, after the selectmen had discovered that the appropriation was exhausted, as evidenced by the resolution of November 30th. No sufficient reason is suggested why these, as well as other smaller bills, were afterward paid in full, and the plaintiff left to carry the deficit to the full extent of the unpaid balance due it.
We regard as most important and compelling, however, the consequence of the finding (paragraph thirty-five) that the amount — $29,336 — found to remain owing to the plaintiff, consists entirely of withheld percentages of progress payments — provided by the contract to be fifteen per cent of the amount determined by the town's engineer, from month to month, to have been earned by the plaintiff. These successive balances, although the contract provided that payment thereof be deferred until sixty days after the completion of the work, are properly to be treated as having been allocated to the plaintiff's credit at the time the amount so earned was ascertained and the partial payment thereon made. The obligation therefor is to be considered as accruing at the time of such ascertainment and partial payment, and before the appropriations were exhausted by payments and ascertained accrued obligations to other parties. At least the defendant is effectually estopped, not having notified the plaintiff of the exhaustion of the appropriation, as it was in duty bound to do, from denying liability for the amount of such withheld percentages, except, possibly, as the accrued total might have been affected by final and corrected computations by the engineer, or by the results of defects and deficiencies in completion of the contract, neither of which contingencies are so present here as to reduce the amount recoverable. People ex rel. Dannat v. Comptroller, 77 N.Y. 45, 50; Swift v. Mayor, 83 N.Y. 528, 536; American Metal Ceiling Co. v. New Hyde Park Fire District, 154 N.Y.S. 661, 664.
The foregoing considerations are ample, upon manifest principles of equity and good conscience, to support the conclusion that the defendant is estopped to deny liability, and to confirm the resulting judgment. Norwalk Gaslight Co. v. Norwalk, 63 Conn. 495, 28 A. 321; Vito v. Simsbury, 87 Conn. 261, 87 A. 722; Newfield Building Co. v. Mohican Co., 105 Conn. 488, 500, 136 A. 78. There is, therefore, no occasion to test the validity of the further conclusion of the trial court that the defendant was acting in the performance of a governmental duty to build and repair necessary highways and the plaintiff's contention that, for this reason, lack or exhaustion of appropriation is not a defense. Most of the requested corrections of the finding which might be granted are addressed to this phase of the case.
For the same reason we do not pass upon the plaintiff's claim that the amount expended for the two bridges is not properly chargeable against the appropriation, under the terms of the votes, or determine the propriety of the action of the selectmen in paying, from the appropriation, the purchase price of property, and for improvements to private premises in lieu of such purchase price, and other similar items; also the question whether the amount of the balance of the Shore Road appropriation was sufficiently proved becomes of no material importance. The fact that the roads in question were used by the town after their completion affords, of itself, no ground for estoppel. Loomis v. Fifth School District, 109 Conn. 700, 145 A. 571. Recovery under the second count for the price of culvert pipe unused as a result of a change of specifications, was proper also, and for the additional reason that, being available to the town for use wherever needed, it was properly chargeable against the general appropriations made by the town for maintenance of highways.