Panhandle Const. Co. v. City of Spearman , 89 S.W.2d 1053 ( 1935 )

HALL, Chief Justice.

The city of Spearman sued the appellant, Construction Company, to recover the value of 7,880 yards of caliche alleged to be of the value of 10 cents per cubic yard, which the* city claimed had been removed from land which it owned by the appellant without the knowledge and consent of the city.

The appellant answered that if it entered upon the lands belonging to the oity it was with the knowledge and consent of said city, under an agreement that appellant should have the caliche free of charge; that the city was endeavoring to let paving contracts for the improvement of certain of its streets, and defendant was a prospective bidder; that the city caused defendant to be informed that the caliche (a necessary material in the performance of the work), would be furnished free, of cost, and that defendant need not consider the value of the caliche in making its estimate. That acting upon this information, the defendant reduced its bid by the cost of such item, and used the caliche with plaintiff’s knowledge and consent; that plaintiff accepted and received the benefit of the reduced bid, and knew that defendant was using such material without any expectation of paying therefor. That the plans and specifications provided that the city engineer in charge of the work 'should allocate the accounts between the parties, which was done, and that the engineer charged nothing to the defendant on account of the use of such material. That there was no appeal from the decision of the oity engineer, and therefore the city could not maintain the suit successfully. The fact that the caliche was taken by the defendant with the knowledge and consent of the city, and upon the solicitation of the city, acting through its duly authorized officers and- agents, was pleaded in estoppel of the city’s right to recover in this action.

The defendant further alleged that if the contract did not provide that it should have the caliche free of charge, that such provision was omitted therefrom by mutual mistake, and that to permit the plaintiff to recover herein would be unjust, un-equitable, and amount to a fraud upon defendant.

The case was tried to the court without the intervention of a jury.

The court filed findings of fact and conclusions of law, and rendered judgment in favor of the city for the sum of $349, with interest thereon at 6 per cent, per annum from September 1, 1931.

The defendant offered in evidence the deposition of Julian Montgomery, who testified that his firm had been selected as engineers by the city of Spearman to prepare plans and specifications and supervise the. work for the paving project involved: that he was shown caliche beds near the city by one of its officers before the contract was let and was present when the contract was let by the city; that he discussed with the officers of the city whether or not caliche would be furnished free of oost from the city’s beds to be used in doing the work; that this discussion was with the city manager when the mayor was present; that he had informed the bidders previous to th'e filing of their bids that the city would make no charge for caliche used from its beds in doing the work. In answer to one interrogatory, he testified: “On the afternoon of March 9, 1931, in the City Hall in Spearman, Mr. Sampson, City Manager, discussed with me the matter of allowing contractors to use caliche from the city bed free of charge. I do not remember Mr. Sampson’s words exactly, but he stated in substance the following: ‘That the City desired to obtain the pavement as cheaply as possible to the property owners, and for me to notify, the contractors that the City would be willing for them to obtain caliche from the City’s beds free of charge.’ My recollection is that Mr. Sampson and Mr. Cooke (the Mayor) were both present at this conversation. I do not remember that Mr. Cooke had anything to add to Mr. Sampson’s statement.” He was further asked whether there was any discussion by the city officers respecting the use of the caliche when the bids were opened, and he said, “Yes, but I do not recollect clearly the details of the discussion, but it was in substance that the successful bidder could use the City’s caliche from the City’s beds free of charge. This was generally discussed by the City officials who were present at the time the bids were opened.”

R. D. Moxley testified that he filed the defendant’s bid upon which the contract was awarded, and did not figure any cost for the caliche because the city engineer had told him the city would furnish it free of cost.

The defendant also offered the testimony óf L. J. Von Tungeln who testified that he was the man on the ground representing defendant, and was told by Mayor Cooke and by Sampson, the city manager, to get caliche from the city’s pit, and that nothing was ever said to him about paying for it.-

Under the allegation that this agreement was omitted by mutual mistake from the written .contract subsequently entered into, this testimony was clearly admissible, and because the court excluded it, we must assume that he did not consider it for any purpose. 17 Tex.Jur. 838, par. 380; Texas Pacific Coal & Oil Co. v. Crabb (Tex.Com.App.) 249 S.W. 835; Middleton v. Brawley (Tex.Civ.App.) 12 S.W.(2d) 257; City of Mission v. Eureka Fire Hose Mfg. Co. (Tex.Civ.App.) 67 S.W.(2d) 455.

The rule is established that a municipality which has entered into a contract that it could not lawfully make cannot be held liable for its breach upon the ground of estoppel, but it is equally well established that a city may be estopped to deny the validity of a contract which it had authority to make, but which was executed by an officer without authority, was entered into without the required formalities, and even where the records of the city do not show that such a contract was ever entered into. If the city accepts performance from the other party and enjoys the benefits accruing to it therefrom, it is bound to perform the obligations imposed upon it by the contract, and where the contract has been executed, an action will not lie to recover compensation paid to the contractor. City of Corpus Christi v. Johnson (Tex.Civ.App.) 54 S.W.(2d) 865; McKenzie Const. Co. v. City of San Antonio (Tex.Civ.App) 50 S.W.(2d) 349; City of Port Arthur v. Young (Tex.Civ.App.) 37 S.W.(2d) 385; Sluder v. Citv of San Antonio (Tex.Com.App.) 2 S.W.(2d) 841; City of Texarkana v. Keeney (Tex.Civ.App.) 50 S.W.

In view of another trial, it is not proper for us to discuss the weight of the testimony upon the issues as to the number of yards of caliche used and the value thereof. There seems to have been a conflict in the evidence upon those issues, which it is the prerogative of the jury to settle without any suggestion from this court.

The tenth proposition, by which it is insisted because the contract provides that the engineer in charge shall adjust the accounts between the city and the contractor, and that the engineer did adjust such accounts and failed to find anything in favor of the city for the value of the caliche used, that the contention was concluded by the terms of the written contract, and the trial court erred in holding otherwise is an insistence not supported by the record.

For the errors pointed out, the judgment is reversed, and the cause is remanded.