ARGENTI v. CITY OF SAN FRANCISCO

This case was decided some weeks ago, and I concurred in the judgment then rendered. Since the petition for a rehearing has been pending before the Court, I have carefully reconsidered the case, and as I differ from the views expressed by Mr. Justice Cope, as to the grounds of the liability of the city, I will proceed to state the reasons upon which I rest my concurrence. The action is brought to recover for services rendered and materials furnished in grading and planking certain streets, and in the construction of certain sewers in San Francisco, under alleged contracts with the city, and for moneys alleged to have been received by the city for the use of the plaintiff and for the amount of certain warrants drawn upon the Treasurer by the Controller, and countersigned by the Mayor of the city. The greater number of these warrants were issued and delivered to the plaintiff, for the work performed and materials furnished under the alleged contracts. The balance of the war276rants were not issued to the plaintiff, and are held by him by assignment, without a transfer of the claims for which they were drawn. The judgment rendered by the Court below, covered the entire amount demanded. This judgment was reversed, this Court holding that the right of the plaintiff to recover was limited to the amount specified in the contracts. The warrants by themselves furnish no ground of recovery. They are neither bills of exchange nor promissory notes; they are drawn against a particular fund, and are not payable absolutely, but only in case the designated fund is sufficient to meet them. Besides this, a large number of the warrants do not comply, in their form, with the requirements of the charter in force at the time. The eighth section of the third article of that charter provides, that “ every warrant upon the treasury, shall be signed by the Controller, and countersigned by the Mayor; and shall specify the appropriation under which it is issued, and the date of the ordinance making the same. It shall also state for what purpose the amount specified is to be paid.” Many of the warrants neither specify the appropriations under which they were issued, or the date of the ordinances making the same. They would not, therefore, constitute any authority to the Treasurer to pay them, even if there were funds in the treasury specially appropriated for their payment. The warrants must, therefore, be laid out of consideration in determining the case, and the right of the plaintiff to recover must turn upon the sufficiency of the claim, arising from the alleged contracts with the city, or for the moneys alleged to have been received by the city for his use.

It may be observed here, before proceeding to consider these contracts, that the opinion rendered in Seale v. The City of San Francisco, at the July term, 1858, to which reference is made, never became authority. A rehearing was granted in that case, and no one is better aware than the learned counsel for the defendant, that when a rehearing is granted, the opinion previously delivered falls, unless reaffirmed after the reargument. Until such reaffirmance, the opinion never acquires the force of an adjudication, and is entitled to no more consideration than the briefs of counsel. The opinion subsequent to the reargument constitutes the exposition of the law applicable to the facts of the case, and the only one to which the attention of the Court can be directed. In the Seale case, the opinion referred to has never been reaffirmed since the reargument, but, on the contrary, the case still remains before the Court undetermined.

The facts of this case, as disclosed by the record, are briefly these: 277 On the twenty-first of July, 1853, the Common Council passed the following ordinance: “The People of the city of San Francisco do ordain as follows: Section 1. That the Street Commissioner be, and he is hereby authorized to advertise for ten days, in a daily newspaper, for proposals to grade, plank and sewer Mission street, from the center of First to the center of Third street; the same to be paid for by the property holders adjacent; the grade to conform to the new grade established by ordinance ; and the proposals to be opened and awarded by the Street Commissioner, with the Committee on Streets from both Boards of Aldermen.” This ordinance was published for ten days successively, in a daily newspaper of the city, and the advertisement required was made in like manner, for the same period. Proposals, based upon certain specifications, were received under the ordinance, and opened by the Committee of the two Boards and the Commissioner, and the work awarded by them to one William A. Barton. On the fifth of August following, the instrument embraced in the z-ecord was signed by the Street Commissioner, puz-porting to act in the name of the city of the one part, and the contractor of the other part. This instrument sets forth, that the city has accepted the bid or proposal of Barton, and agreed to pay him for the work according to certain designated rates; and in consideration of the sums “ so agreed to be paid ” by the city, Barton, on his part, agrees to proceed immediately and perform the work according to the specifications, in reference to which his bid or proposal was accepted—the whole to be done to the satisfaction of the city and the Street Commissioner. Barton commenced the work, and continued upon the same until the thirty-first of the month, when he transferred his contract and his interest therein to the plaintiff, who proceeded and completed the work. And it is expressly found by the Court, that the work was done “in the very best manner, and to the satisfaction of the Street Commissioner and of the defendant.”

On the fifth of August, 1853, the Common Council also passed the following ordinance: “ The People of the city of San Francisco do ordain as follows : Section 1. That the Street Commissioner be, and he is instructed to advertise, according to law, that it is the intention of the city to grade, sewer and plank Mission street, from the center of First to Main street; the expense of the same to be paid by the property along the line of said street.” This ordinance was published, and the required advertisement was made in like manner and for the same period as the other ordinance and advertisement; and proposals there278under, accompanied with certain specifications, were received from one William Swain, and were accepted “by the defendant.” On the fifteenth of September following, an instrument, purporting to be a contract, was signed by the Street Commissioner, assuming to act on the part of the city, with Swain, corresponding substantially in its form with the instrument executed by him and Barton, already mentioned. Upon its execution, Swain commenced the work for which he contracted, and continued the same until the seventh of October, when he made a transfer of his interest to the plaintiff, similar to the one made by Barton; and the plaintiff proceeded and completed the work in the very best manner, as found by the Court, and to the like satisfaction of the Street Commissioner and of the defendant.

■ The work under the two contracts was measured, as it progressed, by the Engineer of the city, and the accounts for the same were duly certified by him. These accounts were duly audited, and upon them the warrants in the complaint, which are payable to the plaintiff, were drawn by the Controller. It is found by the Court, that the warrants were issued and delivered to the plaintiff by the authority of the city, at the time they respectively bear date; that they were presented to the Treasurer, and payment demanded; that the payment was refused, on the ground that there were no funds in the treasury applicable to them; that previous to the demand, assessments had been duly levied by the city upon the property adjacent to the improvements, for the purpose of meeting their expenses, and that these assessments had been collected by the collector of street assessments, and by him paid into the city treasury.

Upon these facts the plaintiff claims a right to recover, either upon the express contracts, or upon the warrants, or upon implied contracts, for the services rendered and materials furnished, or for money received by the defendant to his use. There are several counts in the complaint sufficient to cover the demand of the plaintiff in all of these forms.

The thirteenth section of article three of the Charter of 1851, under which the ordinances in question were passed, vests in the Common Council the authority to pass all proper and necessary laws for opening and repairing streets, and for the construction of sewers in the city. The second section of article five provides that whenever the Common Council shall think it expedient to improve any street, notice thereof shall be given by publication for ten days in some daily paper, and 279 that, should one-third of all the owners of the adjacent property protest against the proposed improvement, it shall not be made; but if no such protest be made, the Common Council shall proceed with the improvement, and that at least two-thirds of the expense shall be borne by the property adjacent. The third section of the same article provides that the assessment for the improvement shall be made by the Commissioners of Assessment; and by the first section, the Mayor, Street Commissioner and Assessor are constituted such Commissioners. The seventh section of article six declares that all contracts for work, or supplies, shall be let to the lowest bidder, after notice given through the public newspapers. The eleventh section of article four authorizes the Common Council to prescribe the duties of all officers, where these are not defined in the charter, or by any other law of the State. The duties of the Street Commissioner not being thus defined, the Common Council, by a general ordinance, passed in November, 1852, cotistituted him the chief officer of the street department, and enacted that the department should “ embrace in its authority the opening, constructing, regulating, improving and repairing of all public streets, yards, lanes, alleys, sewers, lands, places, wharves, docks, piers, and basins, and the care, supervision and control thereof.”

It will be thus seen that the charter vests in the Common Council the authority to order the improvements in question, and directs the mode in which the intention to make the same shall be indicated, the conditions upon which the work shall proceed, and the parties to whom the contract shall be awarded; and the general ordinance of November, 1852, designates the officer under whose supervision, on behalf of the city, the work shall be done. In the present case, the ordinance of July 21st, 1853, sufficiently indicates the intention of the Common Council to make the improvements ; it states the work to be done, and the character of the grade; it calls for proposals and directs the award of the work; and the charter determines the party to whom the award shall be made. The ordinance was duly published, the advertisement duly made, the proposals received, and the work awarded. The contract was thus complete on both sides, and no protest having been interposed, it only remained to carry the same into execution. It is, therefore, of no moment, in my judgment, whether or not the Street Commissioner had authority to bind the city by the particular written instrument embraced in the record. The parties were mutually bound by the proceedings previously taken—the contractor in accordance with 280 his bid and accompanying specifications, which were accepted—the city to pay him either directly, or to collect the amount by assessment upon the property, and transfer it to him. The drawing up of a formal contract, specifying its terms, is the usual proceeding upon the acceptance of a bid for a contemplated improvement; and, for many reasons, should be insisted upon, especially to avoid dispute as to the extent and details of the work. This can, however, only be a matter of moment, when it is attempted to enforce the contract against the contractor, or to hold him responsible for its imperfect fulfillment. It is of no consequence, where there is no complaint on the part of the city as to the performance of the contract. In the present case, it is expressly found by the Court below, that the work was completed to the satisfaction of the Commissioners and of the city. The record does not disclose in what manner the satisfaction of the city was expressed, but it must be presumed, under the finding, to have been in a legal and authorized manner. I leave, therefore, out of consideration the instrument drawn up between the Street Commissioner and the contractor, and pass by the question whether the Commissioner had authority to execute it. This instrument does not purport to impose any additional duties upon the contractor beyond what devolved upon him from the acceptance of his proposals. It does, however, purport to bind the city for the payment of the work, and it is this feature which is the point of objection.

The second ordinance, passed on the fifth of August, 1853, differs materially from the first ordinance. It does not call for proposals, or authorize the acceptance of any. It simply indicates the intention of the Common Council to make certain improvements. Further action was requisite on the part of the Common Council, to authorize the' work designated. Such further action, it appears, was taken; for it is found by the Court below that proposals for the work were made to the city by Swain, and were accepted by the city. The record does not disclose the manner in which the acceptance was made, but the presumption follows, from the finding, that it was in a legal and authorized form. With their acceptance, the contract was complete, and to it the same observations are applicable which have been made in relation to the contract with Barton. The work was performed, and according to the finding of the Court, as we have already stated, in the very best manner, to the satisfaction of the Street Commissioner and of the city.

It follows, from the views I have expressed, that the acceptance of 281 the proposals of Barton by the Street Commissioner and the committees of the two Boards, under the direction of the ordinance of July 21st, 1853, and those of Swain by the city in proper form, converted what were previously mere propositions of the city into contracts, perfect in all their parts, binding alike upon the city and the contractors. The inquiry then arises as to the extent of the obligation assumed by the city.

The first ordinance, it will be seen, provides that the expenses of the improvement proposed should be paid for by the property holders adjacent; and the second ordinance, by the property along the line of the street. The counsel of the plaintiff contends that the city is primarily liable, and is to look to the property for reimbursement, and the counsel of the defendant contends that the city is the simple agent by whom the property is to be assessed, and the money collected and paid over to the contractors. It is to be observed that the language of the two ordinances is different; in the first, the expense is to be paid by the property holders; in the second, by the property. I am of opinion that the city is primarily Bable; and that she, and not the contractors, must look to the property or the property holders for meeting the necessary expenses, and for various reasons. The improvements are to be made by the city, and the contracts are with the city. To the contracts there are but two parties, the parties bidding and the city accepting. The property holders are not parties to the contracts. There is no privity between them and the contractors, or between the property and the contractors. The city is to levy the assessments and enforce the payment. Over her acts the contractors can exercise no control, and her acts cannot properly enter into any consideration with them. They cannot assert any claim against the property or its holders. They must look alone to the city. They do not possess any Ben, even, upon the property. It is the duty of the city—of her government— to make the assessment and collect the same, and the contractors are mere strangers to the proceedings, as much so as any officer who draws a salary from the State is to any proceedings to enforce the revenue laws. The clauses in the ordinances constitute only a designation of the sources upon which the city intends to rely to pay for the improvements, and subserve the double purpose of informing the owners of the property of what they may expect in case they interpose no protest to the improvement, and of imparting assurance to the contractors of their obtaining payment for the work, independent of any question as to the 282 amount of her general indebtedness. In the assessment for the improvements, which are the subject of consideration in the present case, the city has acted upon the assumption that she was primarily liable, and not that she was a mere agent of the contractors. She has authorized the payment of the assessments upon the property, levied to meet the expenses of the improvements, to be made in her outstanding warrants, and in this way the entire assessments have been discharged.

The question is thus rendered’of little practical moment in the present case, for the city, having collected the amount of the assessments, would be liable to the plaintiff, even if not so primarily. She would be liable as for moneys received. It matters not that she took in lieu of the money outstanding warrants, or evidences of debt. She took that which she deemed equivalent to money, and discharged the assessments ; and if, as contended by counsel, it was simply her duty to collect for the plaintiff the money, she could be compelled to account to him for that which she took as such; and in this view a recovery could be sustained upon the count for money received to his use.

But I place my concurrence in the judgment heretofore rendered in this case upon the validity of the contracts with the city, which were completed by the acceptance of the proposals of the contractors, and the primary liability of the city for the work performed thereunder. I have been thus explicit, because I do not consider that, independent of such contracts, any liability would attach to the city for the improvement of the streets. A municipal corporation can only act in the cases and in the mode prescribed by its charter, and for street improvements of a heal nature, express contracts, authorized by ordinance, are necessary to create a liability. The doctrine of liability, as upon implied contracts, has no application to cases of this character. That doctrine applies to cases where money or other^ property of a party is received under such circumstances that the general law, independent of express contract, imposes the obligation upon the city to do justice with respect to the same. If the city obtain the money of another by mistake, or without authority of law, it is her duty to refund it—not from any contract entered into by her on the subject, but from the general obligation to do justice which binds all persons, whether natural or artificial. If the city obtain other property which does not belong to her, it is her duty to restore it; or if used by her, to render an equivalent to the true owner, from the like general obligation. In these cases she does not, in fact, make any promise on the subject, but the law, which always 283 intends justice, implies one; and her liability thus arising is said to be a liability upon an implied contract, and it is no answer to a claim resting upon a contract of this nature, to say that no ordinance has been passed on the subject, or that the liability of the city is void when it exceeds the limitation of $50,000 prescribed by the charter. The obligation-resting upon her is imposed by the general law, and is independent of any ordinance, and the restraining clauses of the charter; It would be, indeed, a reproach to the law, if the city could retain another’s property because of the want of an ordinance, or withhold another’s money because of her own excessive indebtedness.

In reference to money, or other property, it is not difficult to determine, in any particular case, whether a liability with respect to the same has attached to the city. The money must have gone into her treasury, or been appropriated by her, and when it is property other than money,' it must have been used by her, or be under her control. But in reference to services rendered, the case is different. Their acceptance must be evidenced by ordinance to that effect. Their acceptance by the city, with the consequent obligation to pay for them, cannot be asserted in any other way. If not originally authorized, no liability can attach upon any ground of implied contract. The acceptance, upon which alone the obligation to pay could arise, would be wanting.

The improvements for which the claim is brought in the present case, were local in them character, and though, to some extent, of general benefit, yet were chiefly for the benefit and advantage of the immediate neighborhood. It is for this reason that assessments for such improvements are generally levied upon adjacent property. The advantages resulting from them do not constitute that kind of general advantage to the city, from the existence of which any liability to pay for the same can be inferred. The general rule, that when one takes a benefit which is the result of another’s labor, he is bound to pay for the same, does not apply to cases of this kind. The benefit is immediately to the adjacent property holders, and only indirectly to the city at large.

I admit that there are numerous authorities which conflict with these views. Indeed, upon the general subject of the extent of the liability of a municipal corporation, the authorities are a tangled web of contradictions, and it is difficult to assert any proposition with respect to the same for which adjudications on both sides may not be cited. As a general rule, undoubtedly, the city is only liable upon express con284tracts, authorized by ordinance. The exceptions relate to liabilities from the use of money, or other property, which does not belong to her, and to liabilities springing from neglect of duties imposed by the charter,- from which injuries to parties are produced. There are limitations even to these exceptions in many instances, as where the property or money is received in disregard of positive prohibitions; as for' example, she would not be liable for moneys received upon the issuance of bills of credit, as this would be in effect to support a proceeding in direct contravention of the inhibition of the charter. Other limitations may exist, but it is unnecessary to pursue the matter any ■ further.

The former judgment must stand, reversing the judgment of the Court below, with directions to strike out so much of the demand as rests upon the warrants alone, and to enter judgment only for the amount due upon the contracts.

Rehearing denied.