■Opinion of the court by
McAtee, J.:
Upon the various assignments of error it is contended, in the first place, that the plaintiff was damaged by the neglect and refusal of the defendant to comply with its contract of June 8, 1894. The evidence shows that the difference between the cost of performance and the contract price was the sum of three thousand dollars. The defense to this claim was that the laws of the United States, sec. 4, chapter 818, enacted July 30, 1886, being “An Act to Prohibit the Passage of Local or Special
Laws in the Territories of the United States, to Limit the Territorial Indebtedness, and for Other Purposes,” provided that:
“Sec. 4. That no political or municipal corporation, county, or other subdivision in any of the territories of the United States shall ever become indebted in any manner or for any purpose to any amount in the aggregate, including the existing indebtedness, exceeding four per centum of the value of the taxable property within said corporation, county or subdivision, to be ascertained by the last assesment for territorial and county taxes, previous to the incurring of such indebtedness; and all bonds or obligations in excess of such amount given by such corporation shall be void.”
The evidence in the case shows that at the time of the making of this contract, the last assessment upon property within the school district amounted to $1,916,000; that four per cent, thereon amounted to $76,640; and that the existing indebtedness was $30,133.19; and that only $45,640 in bonds could be lawfully issued under the limitation of four per cen/t. The decree of the district court in the injunction suit had so especially declared, and had refused to sanction or to issue $70,000 in bonds which had theretofore been voted by the people of the school district and which had been printed. The board of education was authorized under the law to incur a liability in behalf of the school district which represented, not exceeding the sum of $45,640.
Upon that date, June 8, 1894, the contract was made with the plaintiff company whereby the plaintiff in writing agreed to furnish to the board of education of the City of Oklahoma “warming, ventilating and dry closet apparatus for thirty-two or more school rooms, divided
into school buildings of such size as the board may choose and to be erected during the year 1894, as shown by the plans; materials to be furnished, and labor to be performed, more particularly described as follows:”
The defendant thereupon “agreed to pay to party of the first part the sum of $210 for each school room for heating and ventilating apparatus complete; and $450 for dry closets, etc., complete, in a four-room school; $520 for dry closets, etc., in an eight-room school; $840 for dry closets, etc., complete, in a ten or twelve-room high school.”
The issue of bonds to the extent of $45,500 had been provided for as early as June, 1894, and yet as late as October 24, 1894, the defendant notified the plaintiff to “set said apparatus, to-wit, your warming, ventilating and dry closet apparatus, and put the same into the said buildings as per your contract with said board of education bearing date of the 8th day of January, 1894,” thereby still standing upon the rights provided and stipulated for the defendant by the contract of that date. While thus standing upon all its legal rights under the contract, the defendant itself failed to keep its contract and provided the buildings requiring apparatus for sixteen rooms only'. This apparatus was furnished by the plaintiff in compliance with its contract. A settlement made after the completion of its work upon the sixteen rooms between the plaintiff and defendant shows that the amount due to the plaintiff for placing its apparatus in those sixteen rooms amounted to $4,400. According to the provisions of the contract of June 8,1894, the amount of indebtedness stipulated by the defendant to be incurred under its contract then made with the plaintiff
would not have exceeded tbe sum of $8,800, but the defendant bad at the time of the execution of that contract, a right to incur an indebtedness to the extent of $45,640 within the limitations imposed by the federal statute, and that statute cannot, therefore, be availed of as a defense to the rights stipulated for in behalf of the plaintiff, and claimed in this action.
It is contended by the defendant in its answer of March 14, 1895, that the obligations incurred in the contract with the plaintiff taken in connection with the obligations which the Board of Education of the city of Oklahoma City “proposed” to incur in the issuance of bonds and construction of • buildings, the total indebtedness thereby incurred against it would exceed the limit of four per cent, of the assessed valuation of the property of Oklahoma City. The plaintiff corporation suing here was not a party to a contract stipulating to incur liability upon the board of education, of an indebtedness exceeding four per cent, upon the last annual assessment upon its school district. We think the plaintiffs demurrer to this defense should have been sustained. The defendant had entered inte? a contract by which the plaintiff was bound, and its proposition cannot be sustained that, because it proposed thereafter to incur other and additional indebtedness to which the plaintiff was not a party, and that such other, later, and additional indebtedness would amount to a sum exceeding the four per cent, limit of the federal statute, that therefore its contract with the plaintiff was void. We think the court erred in this ruling, and that the demurrer should have been sustained.
It is, however, contended by the defendant that the plaintiff “abandoned” its original contract when it agreed
to negotiate tbe bonds issued witbin the limit of $45,500, and accepted payment for sixteen rooms for which the defendant permitted it to furnish supplies under the contract, instead of the thirty-two rooms which had been provided for by the contract and for which the plaintiff was bound.
The contract between the parties was in writing and it is expressly provided by sec. 870, p. 221, of the Statutes of Oklahoma, 1893, that: “A contract in writing may be altered by a contract in writing, or by an executed oral agreement, and not otherwise.”
It is not pretended that there was any recission by written contract, nor is there any evidence to support the contention that the contract in writing was altered by an “executed oral agreement,” except that which was furnished by the acceptance by the plaintiff of payment, so far as payments have been made, for the performance of one-half of its contract!
It was, indeed, shown by the defendant upon the testimony of the secretary and treasurer of the company that at the time of making the settlement heretofore referred 'to after the completion of the work which was actually done, that the president of the company, Mr. Peck, said that he “didn’t want us to understand that the matter was finally settled if we should build the other rooms,” and that the settlement at that time was “in payment for everything that was delivered to the school board up to that date,” and that Mr.
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■Opinion of the court by
McAtee, J.:
Upon the various assignments of error it is contended, in the first place, that the plaintiff was damaged by the neglect and refusal of the defendant to comply with its contract of June 8, 1894. The evidence shows that the difference between the cost of performance and the contract price was the sum of three thousand dollars. The defense to this claim was that the laws of the United States, sec. 4, chapter 818, enacted July 30, 1886, being “An Act to Prohibit the Passage of Local or Special
Laws in the Territories of the United States, to Limit the Territorial Indebtedness, and for Other Purposes,” provided that:
“Sec. 4. That no political or municipal corporation, county, or other subdivision in any of the territories of the United States shall ever become indebted in any manner or for any purpose to any amount in the aggregate, including the existing indebtedness, exceeding four per centum of the value of the taxable property within said corporation, county or subdivision, to be ascertained by the last assesment for territorial and county taxes, previous to the incurring of such indebtedness; and all bonds or obligations in excess of such amount given by such corporation shall be void.”
The evidence in the case shows that at the time of the making of this contract, the last assessment upon property within the school district amounted to $1,916,000; that four per cent, thereon amounted to $76,640; and that the existing indebtedness was $30,133.19; and that only $45,640 in bonds could be lawfully issued under the limitation of four per cen/t. The decree of the district court in the injunction suit had so especially declared, and had refused to sanction or to issue $70,000 in bonds which had theretofore been voted by the people of the school district and which had been printed. The board of education was authorized under the law to incur a liability in behalf of the school district which represented, not exceeding the sum of $45,640.
Upon that date, June 8, 1894, the contract was made with the plaintiff company whereby the plaintiff in writing agreed to furnish to the board of education of the City of Oklahoma “warming, ventilating and dry closet apparatus for thirty-two or more school rooms, divided
into school buildings of such size as the board may choose and to be erected during the year 1894, as shown by the plans; materials to be furnished, and labor to be performed, more particularly described as follows:”
The defendant thereupon “agreed to pay to party of the first part the sum of $210 for each school room for heating and ventilating apparatus complete; and $450 for dry closets, etc., complete, in a four-room school; $520 for dry closets, etc., in an eight-room school; $840 for dry closets, etc., complete, in a ten or twelve-room high school.”
The issue of bonds to the extent of $45,500 had been provided for as early as June, 1894, and yet as late as October 24, 1894, the defendant notified the plaintiff to “set said apparatus, to-wit, your warming, ventilating and dry closet apparatus, and put the same into the said buildings as per your contract with said board of education bearing date of the 8th day of January, 1894,” thereby still standing upon the rights provided and stipulated for the defendant by the contract of that date. While thus standing upon all its legal rights under the contract, the defendant itself failed to keep its contract and provided the buildings requiring apparatus for sixteen rooms only'. This apparatus was furnished by the plaintiff in compliance with its contract. A settlement made after the completion of its work upon the sixteen rooms between the plaintiff and defendant shows that the amount due to the plaintiff for placing its apparatus in those sixteen rooms amounted to $4,400. According to the provisions of the contract of June 8,1894, the amount of indebtedness stipulated by the defendant to be incurred under its contract then made with the plaintiff
would not have exceeded tbe sum of $8,800, but the defendant bad at the time of the execution of that contract, a right to incur an indebtedness to the extent of $45,640 within the limitations imposed by the federal statute, and that statute cannot, therefore, be availed of as a defense to the rights stipulated for in behalf of the plaintiff, and claimed in this action.
It is contended by the defendant in its answer of March 14, 1895, that the obligations incurred in the contract with the plaintiff taken in connection with the obligations which the Board of Education of the city of Oklahoma City “proposed” to incur in the issuance of bonds and construction of • buildings, the total indebtedness thereby incurred against it would exceed the limit of four per cent, of the assessed valuation of the property of Oklahoma City. The plaintiff corporation suing here was not a party to a contract stipulating to incur liability upon the board of education, of an indebtedness exceeding four per cent, upon the last annual assessment upon its school district. We think the plaintiffs demurrer to this defense should have been sustained. The defendant had entered inte? a contract by which the plaintiff was bound, and its proposition cannot be sustained that, because it proposed thereafter to incur other and additional indebtedness to which the plaintiff was not a party, and that such other, later, and additional indebtedness would amount to a sum exceeding the four per cent, limit of the federal statute, that therefore its contract with the plaintiff was void. We think the court erred in this ruling, and that the demurrer should have been sustained.
It is, however, contended by the defendant that the plaintiff “abandoned” its original contract when it agreed
to negotiate tbe bonds issued witbin the limit of $45,500, and accepted payment for sixteen rooms for which the defendant permitted it to furnish supplies under the contract, instead of the thirty-two rooms which had been provided for by the contract and for which the plaintiff was bound.
The contract between the parties was in writing and it is expressly provided by sec. 870, p. 221, of the Statutes of Oklahoma, 1893, that: “A contract in writing may be altered by a contract in writing, or by an executed oral agreement, and not otherwise.”
It is not pretended that there was any recission by written contract, nor is there any evidence to support the contention that the contract in writing was altered by an “executed oral agreement,” except that which was furnished by the acceptance by the plaintiff of payment, so far as payments have been made, for the performance of one-half of its contract!
It was, indeed, shown by the defendant upon the testimony of the secretary and treasurer of the company that at the time of making the settlement heretofore referred 'to after the completion of the work which was actually done, that the president of the company, Mr. Peck, said that he “didn’t want us to understand that the matter was finally settled if we should build the other rooms,” and that the settlement at that time was “in payment for everything that was delivered to the school board up to that date,” and that Mr. Peck, the president of the plaintiff corporation “didn’t exactly regard it as a final settlement, he agreed to the settlement up to that time. He expected to furnish apparatus and other supplies for other buildings that might be built.”
There is in this testimony no recission of the contract under the provisions of the statute and no “executed oral agreement,” except so far as above stated. The understanding of the plaintiff company by its president as expressed at the time of the settlement referred to having plainly been that under the provisions of his contract he was to be permitted to furnish apparatus for other buildings subsequently erected by the defendant.
Upon the contention of the plaintiff that the sum of $430 was due for the placing of apparatus in one of the buildings constructed, known as the North building, and that a balance for $430 for placing apparatus in the building known as the South building, which was found by the court as to each of these claims that the plaintiff had been paid, “by the payment to Peck and Williamson, who are shown to have been joint purchasers with the plaintiff of the bonds issued by the defendant,” it is disclosed in the record that the “proposition and contract for the purchase of school bonds was made between- George Peck and A. W. Williamson, as individuals, and the Bennett and Peck Heating and Ventilating company, a corporation organized under the laws of Ohio, by its president and secretary, all as party of the first part, whereby they propose to purchase of the board of education of the school district of the city of Oklahoma City, party of the second part, $70,000 in bonds,” etc.; that by said contract the party of the first part was “to be allowed a commission of four per cent, on the whole amount, payable in bonds along with the first delivery of bonds,” and that on or by June 25, 1894, out of the total sum of $2,800 which would have been the amount of commission upon $70,000 at the rate of four per cent, the sum
of $2,680.50 had been paid; that in the first instance a portion of this latter amount of commissions had been remitted to the plaintiff corporation. It was also in evidence, and undisputed, that the plaintiff corporation had refused to receive the remittance and that immediately thereafter the' amount of the remittance thus refused had been made by Mr. Avey, the secretary of the defendant board of education, directly to Messrs. Peck and Williamson, as individuals, and that they had appropriated the money and had not paid any portion of it to the plaintiff corporation. It was in evidence, and undisputed, that the plaintiff corporation was incorporated for the purpose of “manufacturing and selling heating and ventilating apparatusand that the plaintiff corporation had never in any manner authorized the making of the said contract, but on the contrary, had repudiated it and taken no part in it. It is true that Messrs. Peck and Williamson were the officers of the corporation, but a corporation ■ which has been chartered “for the purpose of manufacturing and selling heating and ventilating apparatus,” and for no other purpose, had no authority to undertake to become a negotiator or broker of bonds upon a commission, and in dealing with the corporation the board of education must be held to have been charged with notice of the contents of the charter of the corporation with which it was dealing.
It is further contended by the defendant that Messrs. Peck and Williamson were entitled to no more than four per cent, upon the amount of bonds, $45,500, which they actually purchased and sold for the defendant company, to-wit, $1,820, and that the difference between the latter sum and the sum $2,680.50, which the board of education
liad remitted by way of commissions to Messrs. Peck and Williamson, should have been credited to the defendant-corporation and that the balance, $S60, should be appropriated by the order of the court as an off-set to the claims respectively upon the two balances of $430 each. The contract for the purchase of the bonds was, as to the plaintiff corporation,
ultra vires,
and if Messrs. Peck and Williamson were over paid by a mistake of the defendant company such over-payment cannot be credited to the defendant corporation, the board of education, as against the amounts here referred to admitted upon the pleadings and in the evidence to have been actually due under the first contract for services rendered by the plaintiff corporation. While Messrs. Peck and Williamson were the officers of the company and undertook to use the name of the plaintiff corporation as one of the parties to the contract for the purchase of bonds, they had no power to bind the plaintiff corporation and the limitations of their authority was expressly contained in that provision of its charter which specifies the purpose of its being, and imposed limitations within which its officers, when at all authorized to act, should undertake to bind it, and we cannot agree with the conclusion of the district court that the amount of the over payment referred to could be applied as an off-set against the amount due to the plaintiff corporation upon the contract.
(N. Y. Ice Co, v. Parker,
8 Bos. 688; 21 How. Prac. Rep. 302;
Marginthan v. King,
24 Pac. 1049, [Col.;]
Robberts v. Donovan,
9 Pac. Rep. 180.)
' It is expressly provided by sec. 3973, p. 779, Statutes of Oklahoma, 1893, that:.
“A counter-claim must be one existing in favor of de
fendant and against a plaintiff between whom a several judgment might be had in the action and arising out of the contract or transaction set forth in the petition as the foundation of the plaintiff’s claim, or connected with the subject of the action.”
And even if the plaintiff corporation had been bound by the contract for the purchase of bonds and had been a party to the receipt of the amount of $860 claimed to have been unearned commisions, yet such unearned commissions could not have been made the subject of a counter-claim or set-off in an action between the plaintiff corporation and the defendant corporation, to which Messrs. Peck and Williamson are not parties..
But it is claimed that after the apparatus was furnished for the sixteen rooms and the work completed and the $45,500 of bonds had been purchased and sold by the plaintiff corporation, that a settlement had been made between the defendant corporation and the plaintiff corporation acting through its president, Mr. Peck.
The testimony of Mr. Avey, the secretary of the defendant corporation, upon this subject, is that such a settle ment was made of which a transcript is furnished and in • eluded in the record, and that while Mr. Peck “didn’t exactly regard it as a final settlement,” yet, he “agreed to the settlement up to that time,” and that “he — Mr. Avey — had accepted Mr. Peck’s own statements in his letters as to the amount of commissions which was due upon the bonds,” and that Mr. Peck had “stated that so much was due for commissions on the bonds and so much for heating apparatus. I took him at his word and just simply sent the amount he asked for and did not discover the mistake until that letter was written;” that he had
afterward corrected the mistake in the books of the board of education and that this correction by which he had erroneously credited Mesrs. Feck and Williamson with the sum of $860 excess paid to them as commissions and had charged the sum to the account of the plaintiff corporation upon its heating apparatus, thus showing that the correct amounts of the commissions at four per cent, upon $45,500 on bonds purchased, to-wit, $1,820, had been paid to Messrs. Peck and Williamson, and that the two balances of $430 each due to the plaintiff corporation for the apparatus furnished in the North and South buildings had thus been paid and discharged by the excess of $860 which was charged by the settlement then made against Peck and Williamson, and that “this was accepted in the settlement” and was considered “by him as a settlement in that respect” and was “agreed to by him.” This testimony was confirmed by Mr. Wheeler, the treasurer of the defendant board of education, who testified that the settlement above referred to included the transaction concerning the over payment of $860 to Messrs. Peck and Williamson and the charging back of the said sum to the plaintiff corporation was “in payment for everything they had delivered to the school board up to that date.”
This testimony is uncontradicted. It is an “executed oral agreement” and, as Mr. Peck was acting at the time for both himself, as an individual, and as president and agent of the plaintiff corporation, he had the power to make the remittance in the one case on behalf of Mr. Williamson and himself, with whom he was a joint partner in the contract for the negotiation of the bonds, and
to admit as against the plaintiff corporation the charging of $860 which had been erroneously paid to himself, for himself and Mr. Williamson.
And while we differ, therefore, somewhat from the district court as to the grounds of its decision in the case, we think that its judgment should be affirmed for the reasons here expressed.
All the Justices concurring except Keaton, J., who concurs in the conclusion reached but not in all the reasoning in support thereof.