Kansas City Hydraulic Press Brick Co. v. National Surety Co.

167 F. 496, 93 C.C.A. 132, 1909 U.S. App. LEXIS 4359
CourtCourt of Appeals for the Eighth Circuit
DecidedFebruary 13, 1909
DocketNo. 2,767
StatusPublished
Cited by22 cases

This text of 167 F. 496 (Kansas City Hydraulic Press Brick Co. v. National Surety Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kansas City Hydraulic Press Brick Co. v. National Surety Co., 167 F. 496, 93 C.C.A. 132, 1909 U.S. App. LEXIS 4359 (8th Cir. 1909).

Opinion

AMIDON, District Judge

(after stating the facts as above). The trial court based its ruling in the main upon section 747 of the General Statutes of Kansas of 1901, which requires that, when the estimated cost of a contemplated improvement amounts to $100—

“sealed proposals for the doing or making thereof shall be invited by advertisement published by the city clerk in the official paper of the city for at least three consecutive days, and the mayor and council shall let the work by contract to the lowest responsible bidder.”

The Supreme Court of Kansas, in the Case of National Surety Co. v. Kansas City Hydraulic Press Brick Company, 73 Kan. 196, 84 Pac. 1034, construed this statute, and held that, when the nature of the material to be used in a public improvement admitted of competitive bidding, such bidding was indispensable, and that the specification of a particular make of brick for paving, when the evidence showed that there were several makes equally well adapted for the purpose, was a violation of this statute, and rendered the proceedings and the contract based thereon illegal and void. This decision of the highest court of the state construing its statute, and defining the powers and duties of municipal bodies, is binding upon us; but the effect oí a violation of its provisions upon collateral and independent contracts is a matter of general law, as to which it is the duty 0? the federal courts to exercise an independent judgment. Giving effect to the statute as thus interpreted, the contracts between Atkins and the city for these several jobs of paving were illegal and void. No action could be based thereon, either for their enforcement or to recover damages for their violation. Any part}- affected thereby could maintain a suit to restrain the municipal authorities from entering into such contracts, and could successfully resist the collection of assessments based thereon. These contracts, however, are not directly before the court in the present suit. They have- been fully executed. The city has paid the agreed price for the paving, and the property owners are paying with[500]*500out objection their assessments to create a fund to discharge the bonds issued to raise money to pay Atkins.

Three grounds have been advanced in argument in support of the charge that the bonds sued upon are illegal: First, it is urged that they are a part of the illegal contracts between Atkins and the city. The statute provides:

“That whenever any public officer shall, under the laws of the state, enter into contract with any person for the purpose of making any public improvements, * * * such officer shall take from the party contracted with a bond with good and sufficient sureties to the state of Kansas, in a sum not less than the sum total in the contract, conditioned that such contractor shall pay all indebtedness incurred for labor or material furnished in making said public improvement.”

The defendant contends that under this statute the contracts between Atkins and the city were incomplete until the bonds in suit were executed, and hence that the latter are tainted with the illegality of the former. While the statute requires public officers to exact such bonds, their failure to do so would not render either the original contract for making the improvement, or collateral contracts for labor and material used therein, illegal or void. Though the bonds and the contracts bear the same date, they are not part of one entire contract. They are between different parties, rest upon distinct considerations, and require the doing of independent acts. The illegality of one contract does not extend to another unless the two are united either in consideration or promise. Hanover National Bank v. First National Bank, 109 Fed. 421, 48 C. C. A. 482. Such a union does not exist between the contracts in question. The bonds were not given to secure the performance of the contracts between Atkins and the city, but to secure independent contracts of materialmen and laborers. Even when a single contract embraces several agreements, some legal and others illegal, it is the duty of the court to 'separate the good from the bad, when that is possible. Choctaw, O. & G. R. Co. v. Bond, 160 Fed. 403, 87 C. C. A. 355; Lingle v. Snyder, 160 Fed. 627, 87 C. C. A. 529. This rule would be more readily applied when the agreements are contained in separate instruments. The plaintiff could have established its case without any aid from the illegal contracts. It is true that it pleaded those contracts in its complaint, and introduced them as part of its case upon the trial. This, however, was not necessary. The proof of the bonds, and the nonpayment of the purchase price of the brick used in constructing the improvements referred to in the bonds, would have made out a complete case in plaintiff’s favor. It is what is necessary to be shown, rather than what is in fact shown, that indicates whether the union between two contracts is such as to involve one in the illegality of the other. A suggestion is also-made in argument that Atkins was a mere figurehead, and that the real contractor with the city was the Diamond Brick & Tile Company. The evidence fails to support this charge. The only connection shown by the evidence between the corporation and Atkins was its request of him to submit bids for the doing of the work. There is no evidence whatever that the Diamond Brick & Tile Company supported him in the performance of his contract, or that he was in any way its agent. The purchase price of the brick was about three-eighths of the contract [501]*501price for the improvement, and there is no evidence that the brick company had anything to do with the other important features of the paving, or was concerned in supplying the brick, except to sell them at a stipulated price. We can find between the bonds sued upon, and the contracts between Atkins and the city, no such connection as would justify extending the illegality of the latter to the former.

Second, it is urged that because the plaintiff knew of the illegality of the contracts between Atkins and the city, and that the brick it supplied were to be used in the performance of those contracts, it became by reason of its knowledge a party to such illegality, so as to defeat its right to recover the purchase price of the brick. To so hold would be to extend unwisely the effect upon a contract of sale of the vendor’s knowledge of the use to which property is to he devoted. It is now the holding of American courts that the knowledge of a vendor that property is purchased to be sold or used in violation of law does not defeat his right to recover its price, except in the case of heinous crimes. Wald’s Pollock on Contracts (3d Ed.) 485. But here the use to which the bricks were to be devoted was not illegal. The utmost that can be contended is that they were to be used in the performance of illegal contracts. Even as to that, however, it should be noticed that the contracts were not illegal as to their object, but solely because they were entered into without competitive bidding. The paving of the street was, of course, a perfectly lawful enterprise. To hold that a sale of personal property is illegal because the vendor knows that the property is to be used in the performance of a contract, lawful in its object, but illegal because let in violation of law, would affix to a vendor’s knowledge vitiating results beyond anything required by judicial authority or sound public, policy.

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Bluebook (online)
167 F. 496, 93 C.C.A. 132, 1909 U.S. App. LEXIS 4359, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kansas-city-hydraulic-press-brick-co-v-national-surety-co-ca8-1909.