Opinion
No. 21894
Decided March 19, 1930.
Municipal corporations — Board of public affairs — Contracts executed without authorization of council or competitive bids — Impose no valid obligation upon village, when — Sections 4328 and 4361, General Code — Action against village for conversion and money judgment does not lie.
1. Where the board of public affairs of a village has contracted for the delivery to such village of supplies or material, without authorization and direction by ordinance of council and without advertising for bids as required under Sections 4328 and 4361, General Code, such contract imposes no valid obligation upon the village. ( Ludwig Hommel Co. v. Incorporated Village of Woodsfield, 115 Ohio St. 675, 155 N.E. 386, approved and followed.)
2. In such case, an action for conversion of such supplies and material, praying for a money judgment, cannot be maintained against the village. ( Frisbie Co. v. City of East Cleveland, 98 Ohio St. 266, 120 N.E. 309, approved and followed.)
ERROR to the Court of Appeals of Monroe county.
This case arises as an error proceeding to the judgment of the Court of Appeals of Monroe county, Ohio, which affirmed the judgment of the court of common pleas of that county. The plaintiff, Ludwig Hommel Co., filed a petition which reads substantially as follows:
"Now comes the plaintiff, and for a cause of action in this case against the defendant says, that at all of the times hereinafter mentioned the plaintiff was a corporation, with its principal office at Pittsburgh, Pennsylvania; and that the defendant was an incorporated village under the laws of the state of Ohio.
"That on the eighth day of November, 1924, plaintiff was the owner and entitled to the immediate possession of the following property, to wit: * * * [169 meters of the value of $3089.57.]
"On said date the defendant being in possession of said property, unlawfully converted and disposed of the same to its own use.
"Wherefore, the plaintiff was damaged in the sum of $3089.57, with interest at the rate of 6% from the eighth day of November, 1924, for which it prays judgment against the defendant, and for all proper orders and relief, to which it may be entitled."
The defendant, the Incorporated Village of Woodsfield, filed the following answer:
"First Defense: Now comes the defendant and for answer to the petition, and for a first defense thereto, admits that plaintiff is a corporation with its principal office in Pittsburgh, Pennsylvania, and that the defendant is an incorporated village under the laws of Ohio.
"For further answer to said petition defendant denies each and every allegation therein contained and says the same are not true.
"Second Defense: For a second defense this answering defendant alleges that in the month of March, 1923, it being then engaged in the building of an electric light plant in said village, which electric light plant was being built under the control and management of the board of public affairs of said village, plaintiff and said board of public affairs attempted to enter into a contract whereby said plaintiff would sell to defendant herein certain meters and purchase from the village certain old meters that the village then owned.
"Defendant alleges that said attempted contract, so entered into between plaintiff and said board of public affairs, was illegal and void for the reason that the amount involved in said contract was in excess of $500.00, and that said contract was not entered into between plaintiff and said board of public affairs after first advertising for competitive bids and for the reason that no authority had been procured by said board of public affairs from the council of defendant village for the expenditure of said sum of money.
"Defendant further avers that said contract was void for the further reason that said meters so owned by the village, at said time, and which were then the property of defendant village, were not sold by said board of public affairs at public auction and to the highest bidder after first advertising for such bids as provided by law.
"This answering defendant further avers that after said attempted illegal contract was entered into by and between plaintiff and said board of public affairs said plaintiff shipped to defendant certain meters of the character and kind set out in plaintiff's petition but that the same were not of the value of $3089.50, but were of a much less value, in truth and in fact they were worth less than $1,500.00; that said board of public affairs, before the illegality of said contract came to the knowledge of this answering defendant, paid to said plaintiff the sum of $800.00 in cash thereon and turned over to said plaintiff one hundred and sixty-four electric meters which were worth more than $656.00.
"This answering defendant further avers that the amount of cash paid, plus the value of the meters so taken by plaintiff, is in an amount in excess of the fair cash value of the meters so furnished by plaintiff to defendant.
"That in addition to the amount paid in cash by defendant to plaintiff for the value of said meters, defendant was entitled to a credit of $86.70 as a discount which was provided for in said illegal contract.
"Third Defense: For a third defense this answering defendant avers that the meters set forth and described in plaintiff's petition, which it claims were converted by defendant for its own use and for which it asks to recover the value thereof in this action, are the same meters for the value of which this plaintiff brought its suit against this defendant, seeking to recover from the defendant the balance due it for said meters, which suit was entitled: Ludwig Hommel Company, plaintiff v. Incorporated Village of Woodsfield, Ohio, defendant, and being numbered 9492 on the docket of this court, and which suit was duly heard in this court and the issues therein raised were decided in favor of this defendant and a verdict was accordingly returned by the jury, in said cause, in favor of this defendant, on which verdict judgment was rendered accordingly.
"Defendant having fully answered prays to go hence with its costs."
The plaintiff filed no reply, but demurred to the second defense in the defendant's answer, for the reason that the same does not state facts sufficient to constitute a defense to plaintiff's petition. Plaintiff also demurred to the third defense in the defendant's answer, for the reason that the same does not state facts sufficient to constitute a defense to plaintiff's petition, and for the further reason that the same is not sufficient as a plea of res judicata.
Upon hearing upon the demurrer, the court found that the demurrer was well taken as to plaintiff's petition, and sustained it, and thereupon dismissed the petition. This judgment being affirmed by the Court of Appeals of Monroe county, motion to certify the record was allowed by this court.
Messrs. Moore, Devaul Moore, for plaintiff in error.
Messrs. Matz Matz, for defendant in error.
The plaintiff in error herein will be referred to as the plaintiff, and the defendant in error as the defendant, throughout this opinion.
The petition is in short form, and claims to state a cause of action for conversion. Since the demurrer to the second and third defenses in the answer searches the record, the sufficiency of the petition is also challenged, and is here considered.
The action is a continuation of litigation between the same parties and over the same subject-matter involved in the case of Ludwig Hommel Co. v. Incorporated Village of Woodsfield, 115 Ohio St. 675, 155 N.E. 386. That action was instituted by Ludwig Hommel Co. to recover from the village of Woodsfield for electric meters furnished by the company to the village upon orders of the board of public affairs of the village. This court denied recovery in that case, holding as follows in the syllabus:
"1. Under Sections 4328 and 4361 of the General Code, the board of public affairs of a village may not make any contract or purchase of supplies or material for any work under the supervision of the board of public affairs involving more than $500 unless such expenditure is first authorized and directed by ordinance of council, and unless after such authorization and direction the board of public affairs of the village has made a written contract with the lowest and best bidder after advertisement for not less than two or more than four consecutive weeks in a newspaper of general circulation within the village.
"2. When either the requirement of authorization and direction by ordinance of council or of advertisement for bids has been omitted, such contract imposes no valid obligation upon the village."
The court, however, indicated in that decision, which was concurred in unanimously, that the title to and right of possession of the meters still remained in the company; and the company now seeks to recover for conversion of the meters, praying for a money judgment therefor.
It is to be observed that the plaintiff company is not suing here for restitution or return of the physical property. It explains its action by the statement that in order to replevin each individual meter it would have to bring innumerable actions, and, furthermore, locate these meters in individual homes in the village, without means of knowing where each meter had been placed. However, this explanation relates to the difficulty of the remedy, and does not change the law.
Taking into consideration the decision in the former case, and bearing in mind the prayer for money judgment herein, we are compelled to view the present action as being virtually a second effort to collect upon the contract. The plaintiff in fact concedes that in order to effect a recovery, this court would have to overrule, or at least substantially modify, its judgment in the cases of Frisbie Co. v. City of East Cleveland, 98 Ohio St. 266, 120 N.E. 309; Buchanan Bridge Co. v. Campbell et al., Commrs., 60 Ohio St. 406, 54 N.E. 372, and similar decisions. It was specifically held in the fourth paragraph of the syllabus in the Frisbie case, that, where no valid obligation is imposed upon a municipality by a contract entered into without compliance with the statutes, an action in damages for conversion could not be maintained against such municipality.
The statutes limiting the powers of public boards to contract or purchase supplies and materials without public and competitive bidding are enacted for the benefit of the public, to protect the funds derived from public taxation from the possible extravagance and carelessness of those entrusted with supervision of such funds. This court will not relax the protection which such statutes throw around the public treasury. It is true that a modification in the strictness of this doctrine was made in State, ex rel. Hunt, Pros. Atty., v. Fronizer, 77 Ohio St. 7, 82 N.E. 518. In that case, it was held that there could be no recovery back of money paid upon a county commissioners' bridge contract, fully executed, but rendered void because of the lack of the necessary statutory certificate by the county auditor, where there was no claim of unfairness, fraud, or extortion, and no claim of effort to put the contractor in statu quo by return of the bridge, or otherwise. The court said that this rule rested upon the principle of common honesty, and that the county should not be permitted to retain both the consideration and the bridge. However, the Fronizer case, which is still the law in this state, cannot be extended beyond the specific doctrine which it announces. It is not authority for the theory that there can be a money judgment or recovery for articles delivered to a municipality under a void contract. Moreover, the doctrine indicated in the opinion in the former case of Hommel Co. v. Incorporated Village of Woodsfield, supra, cannot be extended beyond its terms. Neither the Frisbie case nor the statement in the opinion in the former Hommel case is authority for the proposition that the Hommel Company may, under the guise of an action for conversion, compel the recovery of the money judgment which was refused in the preceding action. The prayer herein is certainly tantamount to a prayer for such recovery. In other words, the Hommel Company here asks for the same kind of relief denied in the preceding action.
Upon the authority of Frisbie Co. v. City of East Cleveland, supra, we conclude that the petition in the instant case does not state a cause of action, and that the judgments of the lower courts must therefore be affirmed.
Judgment affirmed.
MARSHALL, C.J., KINKADE, ROBINSON, JONES, MATTHIAS and DAY, JJ., concur.