Newbery v. Fox

The only point presented by the appellant for decision is as to whether a contract, entered into in 1885, between the town council of the municipal corporation the town of Taylor’s Falls and the defendant Fox, for the opening and grading of certain streets by Fox, was ultra vires, and whether the municipality should be *143heard to interpose that defence to an action by the other party to recover upon the contract after it had been performed. The corporation was empowered by its charter (Sp. Laws 1873, c. 2, and Sp. Laws 1881, (Ex. Sess.) c. 44) to levy special assessments for such improvements upon the real estate in front of or adjacent to which the same should be made. The act of 1881 repealed certain sections -of the prior act providing for the assessing of the cost of such improvements in the first instance upon the property deemed to be benefited thereby; and by section 10 of the later act it was provided that the town council should “order said improvements to be made by the owners, of real estate, or occupants of such real estate, in front •or adjacent to where said improvements are so ordered.” Section 12 provides that such owners or occupants “shall make, or cause to be made, said improvements at their own cost and charges;” and further provides that, in case of their default, the council may cause the improvement to be made, and assess the expense upon the property. It is not controverted that the statute required that an order should have been made for the adjacent proprietors to make the improvement, and opportunity given them to do so, before the council could rightfully let a contract for the doing of it, and it is admitted that this was not done. Not only was the party entering into this ■contract legally chargeable with notice that by the public charter the authority of the council was thus restricted, (McDonald v. Mayor, 68 N. Y. 23; Schumm v. Seymour, 24 N. J. Eq. 143,) but the allegation in the complaint that the plaintiff warned the defendant that the •contract was void before he commenced to perform it, is admitted by the answer.

The doctrine of ultra vires has, with good reason, been applied with greater strictness to municipal bodies than to private corporations, .and, in general, a municipality is not estopped from denying the validity of a contract made by its officers, when there has been no authority for making such a contract. Mayor v. Ray, 19 Wall. 468; Brady v. Mayor of New York, 20 N. Y. 312; Hague v. City of Philadelphia, 48 Pa. St. 527; 1 Dill. Mun. Corp. 457; Nash v. City of St. Paul, 8 Minn. 143, (172.) A different rule of law would, in effect, ■vastly enlarge the power of public agents to bind a municipality by *144contracts, not only unauthorized, but prohibited, by the law. It-would tend to nullify the limitations and restrictions imposed with respect to the powers of such agents, and to a dangerous extent expose the public to the very evils and abuses which such limitations are designed to prevent. In the case here presented it is not to be denied that the town council had no authority to make this contract;, that the charter set forth the conditions which would authorize such a contract to be made; that those prescribed conditions had not been fulfilled, nor did the defendant believe that they had been. The most that appears in his favor is that, without being misled or mistaken as to the fact, but being warned that the contract was void, he-nevertheless judged that it was legally valid; and, being also so advised by the members of the council, he took the risk of performing it. The contract, being thus unauthorized, was not effectual as a contract, and the defendant does not appear in a position entitling-him to invoke the doctrine of estoppel to aid him in enforcing his-claim, as though the contract were obligatory upon the town. No-other reason is urged in support of the answer demurred to than that which we have considered, and, deeming this insufficient, the order-sustaining the demurrer is affirmed.