Bell v. Kirkland

113 N.W. 271, 102 Minn. 213, 1907 Minn. LEXIS 420
CourtSupreme Court of Minnesota
DecidedOctober 4, 1907
DocketNos. 15,266, 15,267—(147, 148)
StatusPublished
Cited by59 cases

This text of 113 N.W. 271 (Bell v. Kirkland) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bell v. Kirkland, 113 N.W. 271, 102 Minn. 213, 1907 Minn. LEXIS 420 (Mich. 1907).

Opinions

JAGGARD, J.

Plaintiff and respondent brought an action against defendants'and appellants to recover the unpaid balance for materials furnished to one Kirkland to be used in the construction of the “Somerville sewer.” Kirkland contracted to construct the sewer, and, as principal, signed an instrument in which the appellants joined as sureties, which purported to be a bond to the city of St. Paul conditioned for the performance of the contract, and for the payment for the labor and materials furnished in its execution. The total amount of the account was $6,286.30. The balance unpaid was $2,967.55. The amount of the bond was $59,200. The present is a test case. The court found for the plaintiff. It found as facts, inter alia, that the course of the sewer carried it under property hereinafter more fully set forth as to which the city had acquired no right by condemnation or grant. This appeal was taken from an order denying defendants’ motion for a new trial.

Defendants’ essential argument is that, if the contract was ultra vires and void, so also was the bond, aqd that the agreement was shown to have been ultra vires and void.

In the first place, the agreement required the construction of a sewer through property not owned by the city. The sewer provided for in the contract was a main sewer of about forty two hundred feet in length. It is cut into two almost equal parts by a railroad right of way and adjoining private property for two hundred five feet. It is proposed to construct it to the Mississippi river as an outlet. In connection with the latter proposition, it is argued that a sewer is of no value unless continuous, or unless it has an outlet. It cannot reach the river because the last eighty five feet is owned by the United States government. The result was two disjointed pieces of sewer without an outlet. The significant fact is that the ultra vires part of the contract leaves the sewer valueless. A contract to construct a useless sewer in private property is beyond the power of the city. The invalidity appears upon the face of the contract.

[216]*216In the second place, defendants’ argument proceeds, the contract was not entered into in accordance with the mandatory provisions of the city charter. We have examined the record adduced in support of this contention. It may fairly be regarded as showing a failure to let the contract as required by the city charter. It is unnecessary to consider the details of this want of compliance. It was, in fact, made by the board of public works, the proper body. A valid preliminary order, a specification of the portion of its cost to be paid out of general funds and other essentials, may properly be conceded to have been wanting.

1. A proper preliminary consideration of the legal questions thus presented involves a brief reference to the attitude' of the courts to the doctrine of ultra vires. That doctrine has been attacked with an earnestness amounting sometimes to asperity. “The doctrine of ultra vires is of very modern date and entirely the creation of the courts. There is no such thing as ultra vires in the case of a common-law corporation (Case of Sutton’s Hospital, 10 Coke, 30 C.), and it is not enacted in any statute. It affords, perhaps, the most remarkable instance in the history of English jurisprudence of the making of law by the judges; and, having once been created, it is now probably saddled onto the backs of the courts, like Sinbad’s 'Old Man of the Sea’, not to; be shaken off.” 6 Cent. Law. Jour. 3. “The reasoning (on the subject) involves a strange confusion of ideas.” 2 Morawetz, Priv. Corp. §, 649. Judge Seymour D. Thompson regards the modern doctrine of ultra vires as a revolt against the ancient doctrine based on a species of moral reformation. His conclusion is “that the doctrine of ultra vires has no proper place in the law of private corporations, except in respect of contracts which are bad in themselves, the making of which is prohibited by considerations of public morality, of justice, or of a sound public policy, and which, therefore, stand upon such a footing that neither party can be regarded as innocent or blameless in entering into them.” 28 Am. Law Rev. 398. And see 5 Thompson, Corp. § 5969.

In 9 Harv. Law Rev. 255, Mr. George Wharton Pepper combats—and we think successfully—the existence of any clear distinction between the principles of the earlier and of the present decisions or of inextricable confusion on the subject in the American reports. He [217]*217recognizes, however, that, “in modern times there has been a steady movement in the direction of enforcing unauthorized and prohibited contracts as between the parties.” The tendency to what Mr. Cooke (28 Am. Law Rev. 227) calls “the extinction of the doctrine” is certainly very marked. 11 Harv. Law Rev. 387; 14 Harv. Law Rev. 332; 13 Am. Law Rev. 661. After an exhaustive discussion of relevant authorities in Re Assignment Mut. G. F. Ins. Co. v. Barker, 107 Iowa, 143, 77 N. W. 868, 70 Am. St. 180, Mr. Freeman concludes: “After a study of the cases upon the subject * * * the impression is forced upon us that the doctrine of ultra vires, as applied to the contracts of private corporations, has almost lost its meaning. The undermining of the foundation upon which it has rested from its inception has proceeded simultaneously from different directions until the doctrine itself seems almost ready to fall of its own weight. The original rule that an ultra vires contract was illegal and void could give rise to no rights, nor be validated by any performance or application of the law of estoppel, has practically been erased from the law, for those courts which do not contradict it directly do so indirectly by their manner of applying it. An appeal to the public interest that private corporations should be restricted in the making of contracts to the scope of their granted powers is growing more and more ineffectual where the rights of persons innocently entering into ultra vires contracts with such corporations intervene.”

With respect to contracts by municipal corporations, one current opinion is that: The “contracts of corporations, whether public or private, stand on the same footing with contracts of natural persons, and depend on the same circumstances for their validity and effect. The doctrine of ratification and estoppel is as applicable to corporations as to individuals.” Argenti v. City of San Francisco, 16 Cal. 256, 257. We incline, however, to accept the views of Judge Dillon on the subject, thus summarized by counsel for the defendants: “The general principle of law is settled beyond controversy that the agents, officers, or even the city council of municipal corporations cannot bind the corporation by any contract which is beyond the scope of its power. * * * The history of the workings of municipal bodies has demonstrated the salutary nature of this proposition, and it is the part of true wisdom to keep the corporate wings clipped down to the law[218]*218ful standard. It results from this doctrine that contracts not authorized by the charter or by other legislative act, that is, not within the scope of the powers of the corporation under any circumstances— are void.” Dillon, Mun. Corp. (4th Ed.) § 457 (381). And see Mayor v. Ray, 19 Wall. 468, 22 L. Ed. 164; Newbery v. Fox, 37 Minn. 141, 33 N. W. 333, 5 Am. St. 830. There is, however, an unmistakable and proper tendency to apply to both classes of corporations the principle that “the doctrine of ultra vires, when invoked for or against a corporation, should not be allowed to prevail where it would defeat the ends of justice or work a legal wrong.” Ohio R. Co. v.

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Bluebook (online)
113 N.W. 271, 102 Minn. 213, 1907 Minn. LEXIS 420, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bell-v-kirkland-minn-1907.