Opinion
No. 34005.
Filed April 19, 1957.
1. Appeal and Error. In an action at law where a jury has been waived it is not within the province of this court to revolve conflicts or to weigh evidence. If there is a conflict in the evidence this court in reviewing the judgment rendered will presume that controverted facts were decided by the trial court in favor of the successful party and the findings will not be disturbed unless clearly wrong. 2. Counties: Work and Labor. Where a statute prohibits a county from making a contract, and avoids the obligation of the contract for so doing, a recovery quantum meruit cannot be had. 3. ___: ___. Where a contract has been entered into in good faith with a county, which contract is within the power of the county to make but is void for the reason that statutory requirements were not complied with, an action in quantum meruit for the service performed or material furnished may be maintained. 4. ___: ___. The right to recover in quantum meruit for service performed or material furnished under a void contract with a county exists up to the limit of, and not beyond, that which would have been recoverable under a valid contract covering the same subject matter. 5. Counties. Under the provisions of section 23-336, R.R.S. 1943, the obligation of a contract is void where the contract is contrary to a statutory limitation, or where there are no funds legally available at the time with which to pay the obligation, or in the absence of a statute expressly authorizing such contract. It has no application where the county has general authority to make the contract but the power has been irregularly exercised.
APPEAL from the district court for Saunders County: HARRY D. LANDIS, JUDGE. Affirmed.
Myrl D. Edstrom, for appellant.
Howard V. Kanouff, Woods, Aitken Aitken, and George W. Haessler, for appellees.
Heard before SIMMONS, C.J., CARTER, MESSMORE, YEAGER, CHAPPELL, WENKE, and BOSLAUGH, JJ.
This is an appeal from a judgment for the plaintiff against the county of Saunders for $4,832 for bridge lumber sold to the county. The appeal was taken by a taxpayer who alleges that the lumber was delivered as the result of two orders each of which was in excess of $500 and therefore contrary to the provisions of section 39-810, R.R.S. 1943, which requires purchases in excess of $500 to be let to the lowest responsible bidder.
The amended petition of the plaintiff sets forth 11 causes of action, each based on a separate order for bridge lumber. Each cause of action is similar except for the order date and the amount claimed as the fair and reasonable value of the lumber furnished. The dates and amounts set out in the 11 causes of action are as follows: May 27, 1943, $483.60; June 4, 1954, $485.69; June 7, 1954, $496.01; June 11, 1954, $489.60; June 14, 1954, $464.10; June 18, 1954, $497.76; June 21, 1954, $448.80; June 25, 1954, $485.34; June 28, 1954, $328.32; June 30, 1954, $326.39; and July 2, 1954, $326.39. The plaintiff prayed for judgment in the amount of $4,832 with interest and costs.
The answer filed by the taxpayer alleges that the board of supervisors did not enter into a contract to purchase the bridge lumber for the value of which suit was brought. It alleges further that the lumber was purchased by William Stewart, the highway commissioner of Saunders County, without the knowledge, consent, authority, or direction of the board of supervisors. The taxpayer further alleges that if lumber was delivered to the county it was pursuant to two orders made by Stewart, each of which was in excess of the amount that could be purchased without advertising for the lowest responsible bidder, and that plaintiff and Stewart deliberately and intentionally represented to the defendant that the 2 orders were 11 separate and distinct purchases to show that such purchases were each in a sum less than $500.
The reply of the plaintiff alleges that Stewart was authorized by the county supervisors to purchase lumber when required or needed in amounts less than $500. Plaintiff further alleges that plaintiff's agent and salesman had been present at regular meetings of the board when Stewart was authorized to make purchases of lumber, that the board of supervisors had paid previous claims for lumber ordered by Stewart, and that the county was estopped to deny liability because of a want of authority on the part of Stewart. Plaintiff alleges also that the amount claimed is less than the reasonable value of the lumber delivered.
Upon the issues thus made, the case was tried by the court, a jury trial having been waived by the parties. The trial court found for the plaintiff in the amount of $4,832 with interest at six percent per annum from September 12, 1954, a total sum of $5,141.50 on the day of judgment.
The action is one at law in which a jury was waived and a trial had to the court. Under such circumstances the findings of the trial court are equivalent to the verdict of a jury. The evidence must therefore be considered in the light most favorable to the successful party, that is, every controverted fact must be resolved in plaintiff's favor and it should have the benefit of every inference that can reasonably be deduced therefrom. Wallace v. Insurance Co. of North America, 162 Neb. 172, 75 N.W.2d 549; Barnes v. Davitt, 160 Neb. 595, 71 N.W.2d 107.
The evidence sustains the following findings of fact: From May 27, 1954, to July 2, 1954, the plaintiff received 11 separate orders for bridge lumber on 11 different days as hereinbefore recited. The orders were signed by Stewart, the highway commissioner for Saunders County, who was orally instructed by the board of supervisors to make purchases for bridge lumber required, but not in excess of $500 at any one time. The evidence shows without dispute that the lumber in question was delivered, retained, and used by the county. All budgetary requirements had been complied with by the board of supervisors and the county had adequate funds on hand and available to pay for the lumber for which the suit was brought.
The basis of the contention of the taxpayer that there were but two orders each in excess of $500 is grounded upon the following factual situation: The first eight invoices bear plaintiff's order No. 1244, and the last three invoices bear plaintiff's order No. 1227. The president of the plaintiff company testifies that it is the bookkeeping practice of the company to give all the orders received from a customer the same order number until all ordered materials have been delivered. After the delivery of all materials on all past orders has been made, the next order received is given a new order number. The method of bookkeeping was fully explained and is shown to be a bookkeeping practice having no relation to the question as to whether or not the customer's orders were in fact one or more separate transactions. The trial court found in effect that there were 11 orders and not 2 under the evidence. Since we are required to give the evidence its most favorable import, the finding of the trial court on this question is conclusive upon this court on appeal.
It is contended that the circumstances surrounding the transactions support a conclusive finding that the orders were made in amounts less than $500 for the fraudulent purpose of circumventing the statute. The evidence does show notations made on orders previously received by the plaintiff from which it might be inferred that some connivance may have existed between the plaintiff and Stewart, the highway commissioner, to avoid the requirements of the statute. These notations, however, were explained in detail by the president of the plaintiff company as informational data for the benefit of plaintiff's clerical employees. The highway commissioner testifies that the county had a continuing need for bridge lumber, that it was hard to get in large quantities because of a threatened strike in the lumber-producing industry, that the price was exceedingly high because of this fact, that the board of supervisors thought it an inopportune time to purchase any considerable quantity of lumber, and that he was directed to buy the lumber as needed in small lots of less than $500 until the market became stabilized and conditions became more normal. He testifies further that he never ordered more than $500 worth of lumber at any one time and that the orders given to plaintiff were for lumber presently needed. He states further that at no time did he ever advise the plaintiff to split orders to keep them under $500 because he never placed an order in excess of that amount. The president of the plaintiff company positively denies that any orders received were in excess of $500 or that any orders were split to make them less than $500. Upon this evidence the trial court found for the plaintiff. We are concluded by the finding of the trial court in favor of the plaintiff on the conflicting evidence as to plaintiff's intent to fraudulently circumvent the statute.
We conclude that the findings of fact made by the trial court which were necessary to sustain a judgment for the plaintiff are sustained by evidence and conclusive upon this court on appeal. It is contended, however, that the evidence is sufficient as a matter of law to show a violation of section 39-810, R.R.S. 1943, and that a recovery of a judgment by the plaintiff is barred for that reason.
The applicable statute states: "The county board of each county has the power to erect and repair all bridges and approaches thereto and build all culverts and make improvements on roads, the cost and expense of which shall in no instance exceed five hundred dollars. All contracts for the erection or repair of bridges and approaches thereto, for the building of culverts and improvements on roads, the cost and expense of which shall exceed five hundred dollars, shall be let by the county board to the lowest and best bidder. All contracts for materials for repairing, erecting, and constructing bridges and approaches thereto, the cost and expenses of which exceed five hundred dollars, shall be let to the lowest responsible bidder, but the board may reject any and all bids submitted for such materials. Upon rejection of any bid or bids by the board, such board shall have power and authority to purchase materials to repair, erect or construct the bridges of the county, and approaches thereto. * * *." 39-810, R. R. S. 1943. It is the contention of the appellant that the giving of 11 orders amounting to $4,832 from May 27 through July 2, 1954, by the highway commissioner and their acceptance by the plaintiff is in itself evidence that the county needed lumber in excess of the value of $500 and that, under such circumstances, the statute requires that its purchase should be let to the lowest responsible bidder.
We point out that this statute gives the county board the general power to erect and repair bridges and approaches thereto, build culverts, and make improvements on roads. It is clear therefore that the county board had general authority to purchase bridge lumber for the erection and repair of bridges.
This court has denied recovery in cases where the applicable statute prohibits the making of a contract and avoids the obligation thereof. Village of Bellevue v. Sterba, 140 Neb. 744, 1 N.W.2d 820; Neisius v. Henry, 142 Neb. 29, 5 N.W.2d 291; City of Lincoln v. First Nat. Bank, 146 Neb. 221, 19 N.W.2d 156; Warren v. County of Stanton, 147 Neb. 32, 22 N.W.2d 287; Heese v. Wenke, 161 Neb. 311, 73 N.W.2d 223. In Neisius v. Henry, supra, we said: "There is much distinction between a contract with a city which is the result of an illegal exercise of an authorized power and one which is illegal because of a statutory disqualification to make a contract, or to create liability. The former may be ratified or a suit quantum meruit maintained. But where one is prohibited by statute from entering into a contract, and the obligation of the contract avoided for so doing, an action quantum meruit cannot be maintained." This is; a correct statement of the law to which we adhere.
But in the present case the statute does not avoid the obligation of a contract made in a manner contrary to the provisions of the statute. In such a situation the rule in this state is: Where a contract has been entered into in good faith by a county, which contract was within the power of the county to make but was void for failure to comply with statutory requirements, an action in quantum meruit for the service performed or the material furnished may be maintained.
In such case the party loses the benefit of his contract and his recovery is limited to the reasonable value of the services performed or the material furnished. O'Neill v. City of South Omaha, 102 Neb. 836, 170 N.W. 174; Stickel Lumber Co. v. City of Kearney, 103 Neb. 636, 173 N.W. 595; Omaha Road Equipment Co. v. Thurston County, 122 Neb. 35, 238 N.W. 919; Western Chemical Co. v. Board of County Commissioners, 130 Neb. 550, 264 N.W. 699; Warren v. County of Stanton, supra. We conclude therefore, assuming the correctness of the taxpayer's theory that the statute was not complied with, that the trial court having found that the orders were made in good faith, the failure to advertise for bids renders the contracts void. It is not, however, a bar to an action quantum meruit since the county board has the general power to purchase lumber for the erection and repair of its bridges. It is not questioned that the county accepted, retained, and used the lumber for the benefit of the county.
The evidence is not disputed that the fair market value of the lumber purchased by the county of Saunders was in excess of the amount claimed by the plaintiff. The plaintiff may not, however, recover in quantum meruit an amount in excess of the contract price even though the contract is void. Warren v. County of Stanton, supra. The judgment of the trial court is in accord with this rule.
It is contended that the contracts in the present case were not only void but that the obligation thereof is voided by virtue of sections 23-336, 23-337, and 23-338, R.R.S. 1943. We point out that these sections of the statute relate to contracts which contravene statutory limitations and are outside the scope of the powers delegated to a county. They do not relate to the illegal use of a granted power. In the present case the money to pay for the lumber purchased was on hand, having been properly assessed, levied, and collected. The general power to purchase lumber for the erection and repair of bridges is delegated to the county board, consequently the irregular exercise of the power does not defeat the right to recover quantum meruit for services and material furnished where the transaction was made in good faith. This court has so construed these statutes in Bartlett v. Dahlsten, 104 Neb. 738, 178 N.W. 636. With reference to section 1104, Rev. St. 1913, now section 23-336, R.R.S. 1943, the court in that case said: "It was not the intention of this statute that counties should be denied the exercise of those powers which are found to be necessary to carry into effect a power specially granted. If that were the intention it would in many instances effect a repeal of those very provisions of the statute expressly granting the power, for to take away the means of performance is to destroy the power itself. Such would be the result in this case. The provision of the statute referred to, we take it, was intended to prevent counties from entering into those contracts, express or implied, and was intended to declare such contracts unlawful, where no statutory authority is to be found justifying the making of such a contract." We concur in the view that sections 23-336, 23-337, and 23-338, R.R.S. 1943, void the obligation of the illegal contract only where the contract is contrary to a statutory limitation, or where there are no funds legally available at the time with which to pay the obligation, or in the absence of a statute expressly authorizing such contract. It has no application where the county has general authority to make the contract but the power has been irregularly exercised.
The findings of fact, which have the effect of a jury verdict, are supported by the evidence. Under the law of this state, as herein stated, plaintiff is entitled to recover quantum meruit, not in excess of the contract price. The judgment of the district court, being in conformity with the foregoing pronouncements, must be affirmed.
AFFIRMED.