General Electric Co. v. Town of Fort Deposit

56 So. 802, 174 Ala. 179, 1911 Ala. LEXIS 349

• Court: Supreme Court of Alabama
• Decided: November 21, 1911
• Status: Published

Opinion

McCLELLAN, J.

Detinue by appellant to recover numerous specific articles that might be generally called electric lighting apparatus and machinery, which appellant delivered, in 1906, to the municipality (appellee) under a written contract of conditional sale; the title to the property being retained therein by the vend- or until payments (deferred) ■ were made in full therefor. The price stipulated in the instrument was about $4,000. Approximately f.1,400 was paid, out of city funds, on the contract price.

It was expressly provided in the charter of Ft. Deposit (Acts 1890-1, pp. 594, 598; Acts 1896-97, pp. 972-974, 1265-1267) that contracts for the purchase of real and personal property “above the amount of one thous- and dollars made by said town council” should not “hold good and valid,” without ratification by the electorate of the municipality. It is conceded in brief for appellant, and the contrary was not shoAvn on the trial, that no ratification, as required by the charter, of this contract was had. Hence, though made by the council, the contract was, by force of the express charter provision, invalid. The contract Avas not binding in any degree upon the municipality.

The pertinent charter provision did not inhibit a purchase of property, hoAvever much the amount to be paid therefor exceeded “one thousand dollars.” On the contrary, it contemplated purchases above that amount. Where the amount exceeded “one thousand dollars,” it affixed, as a condition to its validity, the ratification thereof by the electorate. But no ratification was, of course, possible without a previously existing status, inconclusive though, under this charter, it must have been, upon which the ratification contemplated could have operated to impart validity to the engagement. Hence the plaintiff did not violate this provision of the charter in entering into and in setting down in formal contractual manner the sale and purchase of the articles described therein. The invalidity of the contract resulted, therefore, from the failure of the electorate to ratify it. Why it was not ratified is not, on this occasion, at all material. As is apparent, the exercise or control of the right of the electorate to ratify the contract was in no sense Avithin the keeping of the vendor. Under this contract, invalidated for the reason stated, the plaintiff delivered the articles described in the amended complaint. 'Omitting at this time consideration of the state of the pleading, the inquiry is, should it be allowed a recovery of property so parted with?

All persons are bound to take notice of the extent and limitations of charter powers in dealing with municipal •corporations or ivith their officers. — 2 Dillon, Munic. Corp. (5th Ed.) § 777; Mayor, etc., v. W. W. Co., 63 Ala. 611; Spence v. M. & M. Ry. Co., 79 Ala. 576, 589, among others.

In Marsh v. Fulton, 10 Wall. 676, 684, 19 L. Ed. 1040, and reiterated in Louisiana v. Wood, 102 U. S. 294, 26 L. Ed. 153, an obviously wholesome and here pertinent doctrine was thus stated: “The obligations to do justice rests upon all persons, natural and artificial, and if a county obtains the money or property of others without authority the law, independent of any statute, will compel restitution or compensation.” This court, in Allen v. La Fayette, 89 Ala. 641, 648, 8 South. 30, 9 L. R. A. 497, took account of it, and also quoted approvingly this expression from Salt Lake City v. Hollister, 118 U. S. 256, 263, 6 Sup. Ct. 1055, 1059 (30 L. Ed. 176) : “But, even in this-class of cases (i. e., avoided ultra vires contracts), the courts have gone a long way to enable parties who have parted with property or money on the faith of such contracts to obtain justice by recovery of the property •or the money specifically, or as money had and received to plaintiff’s use.” (Italics supplied.) In Pimental v. City of San Francisco, 21 Cal. 352, 363, cited in Allen v. La Fayette, supra, it was declared that if a city “obtain other, property, which does not belong to her, it is her duty to restore it, or, if used, to render an equivalent therefor from the like obligation. — Argenti v. San Francisco, 16 Cal. 282. The liability springs from the moral duty to make restitution.” In Clark v. County Com’rs of Saline County, 9 Neb. 516, 4 N. W. 246, Paul v. City of Kenosha, 22 Wis. 266, 94 Am. Dec. 598, Bridge Co. v. Frankfort, 18 B. Mon. (Ky.) 41, among others, the like doctrine was declared.

However, these general pronouncements of primary justice cannot be availed of or given effect in all cases of void contracts with municipalities. Where the acts or dealings upon which the contracts are based are “prohibited by their charters, or some other law bearing upon them, or are 'malum in se or violative of public policy,” where the plaintiff, in order to recover, “must trace his right” through a violation by him of positive law, the courts will not lend their aid to reimburse the loss, nor to restore the property delivered under such contracts. — Allen v. Intendant, supra; Bluthenthal v. Headland, 132 Ala. 248, 31 South. 87, 90 Am. St. Rep. 904; Town of Cottonwood v. Austin, 158 Ala. 117, 48 South. 345; Clark v. Colbert, 67 Ala. 92; Walker v. Gregory, 36 Ala. 180; 2 Dillon (5th Ed.) § 795; Jemison v. B. & A. R. R. Co.. 125 Ala. 378, 383, 28 South. 51; Thornhill v. O’Rear, 108 Ala. 299, 19 South. 382, 31 L. R. A. 792; Hill v. Freeman, 73 Ala. 202, 49 Am. Rep. 48; Yarbrough v. Avant, 68 Ala. 532. The basis of the rule is thus stated by Chief Justice Parker, in Worcester v. Eaton, 11 Mass. 368, 377, 378, cited in Walker v. Gregory, supra: “It appears then to be the settled law in England, and Ave are satisfied that it is also the laAV here, that, where tAvo parties agree in violating the laws of the land, the court wil-1 not entertain the claim of either party against the other, for the fruits of an unlawful bargain. If one holds the. obligation or promise of the other to pay him money, or do any other valuable act, on account of such illegal transaction, the party defendant may expose the nature of the transaction to the court; and the law will say, 'Our forms and rules are established to protect the innocent and to vindicate the injured, not to aid offenders in the execution of their unjust projects;’ and if the party who has foolishly paid his money repents his folly, and brings his action to recover it back, the same law will say to him: ‘Yon have paid the price of your wickedness, and you must not have the .aid of the law to rid yon of the inconvenience, which is suitable punishment of your offense.’ ”

At least one means for and source of the establishment and ascertainment of public policy is statute law. —People v. Hawkins, 157 N. Y. 1, 51 N. E. 257, 42 L. R. A. 490, 68 Am. St. Rep. 736; U. S. v. Tr. Mo. Ass’n, 58 Fed. 58, 7 C. C. A. 15, 24 L. R. A. 73; Vidal v. Girard’s Ex’rs, 43 U. S. 127, 197, 11 L. Ed. 205; Tarbell v. Portland R. R. Co., 73 Vt. 347, 51 Atl. 6, 56 L. R. A. 656, 87 Am. St. Rep. 734, note on p. 737. “The law which prohibits the end will not lend its aid in promoting the means designed to cany it into effect; * * that it will not promote in one form that which it declares wrong in another.” — Tarbell v. Railroad Co., supra, quoting Shaw, C. J., in White v. Buss, 3 Cush. (Mass.) 448.

A distinction is taken between void contracts and illegal contracts. — City of Los Angeles v. City Bank, 100 Cal. 18, 34 Pac. 510. Money paid or property surrendered under a merely void contract may, in a proper case, be recovered; but not so where the contract is. illegal. — Wharton on Contr. §§ 336, 340, 741. An illegal contract has been defined as “an agreement with an unlaAvful object. It is not merely lacking in valid subject-matter, but its purpose is positively invalid.” — Billingsley v. Glelland, 41 W. Va. 234, 244, 23 S. E. 812, 815.

While a penalty implies a prohibition, and a contract relating to it is void, yet a penalty is not essential in order to construct a prohibitory law. — Woods v. Arm. strong, 54 Ala. 150, 25 Am. Rep. 671; McGehee v. Lindsay, 6 Ala. 16. “When no penalty is imposed, and the intention of the Legislature appears to he simply that the agreement is not to be enforced, then neither the agreements itself nor the performance of it is to be treated as unlawful for any other purpose.” — Chapman v. County of Douglass, 107 U. S. 848, 256, 2 Sup. Ct. 62, 69 (27 L. Ed. 378). Where an agreement violates a statute with respect only to the mere mode of its performance, the contract, its substance not being prohibited by law, is not unlaAvful — is not illegal. — Chapman v. County of Douglass, supra.

Consistent with these principles, it is evident that, while the agreement of sale and purchase of the articles in question was and is invalid, it was not illegal, as was the case in the Town of Cottonwood v. Austin, supra. The appellant was not concerned in the violation of any positive law in engaging as it did. It, therefore, may, if otherwise so entitled, recover its property so delivered, not under the contract, but according to the principle of primary justice to Avhich reference has been made.

In putting the inquiry of abstract right of the plaintiff to recover property delivered under this invalid contract, the state of the pleading here present was eliminated. It is necessary to now take account of it in disposing of this appeal.

The complaint pursued the usual form of detinue. To it the defendant, in addition to the general issue, answered, in substance, (a) that the contract was invalid as upon the ground before indicated; and, again, (b) that the property sued for had been affixed to the realty of the municipality and residents thereof, and had become realty, to remove Avhich Avould entail irreparable injury, and hence could not be recovered in an action of detinue; and, again, (c) that the materials had been affixed to the freehold by the authority and direction and with the full knowledge and consent of the plaintiff. Demurrers were interposed to these pleas, but no ruling of the court thereon appears from this transcript to have been had. In such state of the record, it will be presumed that the demurrers Avere withdrawn or not insisted upon. — Henderson v. Berry Co., 145 Ala. 404, 39 South. 662.

Plaintiff joined issue on defendant’s special pleas, and also replied specifically, in substance, that the contract under which the property Avas delivered to the officers of the defendant provided for the retention of title thereto until deferred payments Avere fully made, which had not been done, and that in said contract it Avas also provided that the purchaser would do all. acts necessary to perfect and maintain such retention of title by the plaintiff; and that the attaching of the property to the freehold was, in effect, alone under the aforesaid stipulation and reservation of the contract, and not otherwise, with plaintiff’s knoAvledge or consent. Other replications simply reasserted the contract stipulation and reservation, and alleged the non-payment of the price therefor; another only denied the averments of the special pleas that the property Avas converted into realty by the direction and authority and Avith the full knowledge and consent of the plaintiff, and that the material is a part of the realty; and another (the last) set up the reservation of title in the contract, denied the full payment of the purchase price, and further averred default in payment and demand, before suit commenced, for the property, which demand was refused by the defendant. By motions and demurrers, defendant assailed these special replications; but no ruling or action of the court in respect thereto is shown by the transcript. They must he treated as abandoned or withdrawn.— Henderson v. Berry Co., supra.

The issues, as this transcript shows them, were those made by the complaint, by the pleas, and by the replications; the only judgment in the transcript reciting that issue was thus joined.

The errors assigned relate only to rulings on the admission or rejection of evidence, and to excerpts from the charge of the court, and to the refusal of a written charge, which we, for convenience, letter “A.” It is objected by counsel for appellee that no sufficient exceptions to these several excerpts were taken for appellant. The bill of exceptions recites: “After the delivery of the charge, counsel for plaintiff excepted in the folloAving language: 'We Avould like to except to that part of your honor’s charge Avhich charges the jury that if they find that if the contract had not been ratified that it Avas void. We xvant to reserve (an) excep tion to that part; that is what I understood.’ The court said, I do not exactly remember the wording of it.’ ” While definite parts of the charge of the court are referred to in assignments of error, there appears to be no justification in the bill therefor. The exception (if such it is taken to be) is not so definite. A bill of exceptions cannot be supplemented by assignments of error. We do not think the exception (if so) was or is sufficiently definite to present for review any particular part of the charge. To give it point, this court must construe or interpret the charge with a view to ascertaining what parts of it coxxxe within the general description of matter against Avhich appellant would complain. Nothing can be left at large in reserving an exception. It must be definite to the last degree. Aside from this, it is by no means clear but that the plaintiff, according to the quoted recital, only expressed a desire or uneffected purpose to except, when the subject thereof could be or was ascertained. This, as is evident, does not suffice to bring any matter up for review.

Under the issues as they appear in this record, especially with reference to the replications, the opinion is entertained that charge “A” (so lettered for convenience) was erroneously refused to plaintiff. Notwithstanding the contract of sale of the articles was void, as asserted in the pleas, and with it fell the reservation of title till the property was paid for, yet, according to this record, the defendant joined issue on replications, asserting the protection of clauses of the invalid engagement with respect to the attachment of the material to the freehold. Under the issues raised by replications, the pertinent doctrine of Warren v. Liddell, 110 Ala. 232, 243, 20 South. 89, Adams Machine Co. v. Inter B. & L. Ass’n, 119 Ala. 97, 24 South. 857, was and is applicable. We do not consider it necessary at this time to enter upon the review of the errors predicated upon rulings on the admission or rejection of evidence. The attempted contract was void. The stipulated reservation of title did not survive it. There was no conditional sale; for the charter provision pronounced such an effort invalid. It is to be regretted that the state of the record forbids a more satisfactory consideration and adjudication of the appeal.

The judgment is reversed, and the cause is remanded.

Reversed and remanded.

All of the Justices concur, except Dowdell, C. J., not sitting.