306 -ARK: STATE HWY.-C- 0Mv-V; KEATON.— [187 4t .ARKANSAS STATE - HiGHWAY :.00MMISSION•: V. KEATON. • i . • • • • : .. -;• • :•.:••• •;.. • • y[ :4.. -Opinion -delivered APril '24, •• IGHWAYS—ALLOWANCE OF dLAIM—EXCHANGE FOR .BOND.-L-Where, 'before r paSsage of Ants 1933, NO. 167; relating to' the issUarice Of 'bonds 'fiir maintenance' . Of the highway 'system, judgment agairiSt - the-High*ay.Commission for value 'of labor and materials uSed in construction of bridges was Tendered by a competent court, .which ..• judgment .was .affirmed .by • the Supreme Court, , the Refunding , Board had only the ministerial duty to perform of certifying the clann for , allOwance for' exchange for 4 State bond. 2. CONTRACT s ' =iivi4muiry , .—the' cOurts will not aid the enforcement of contractS whiéli "are- immoral, illegal, or prohibited by law or public policy, or which are in excess of the power of parties • to :make, regardless of .whether the consideration has passed or not. H , IGHWAYS INVALID *CONTRACT 7 — QUANTTJM , NipritryT. One furnish7 ing labor. and materials for . construction . of bridges under, a contract whiCh was invalid meiely because not let in manner ' and 'form PrOVided by him hdd entitled to "recOver the' fair value 'tbereof up:311'a qicev;itu4n, . . • Appeal . from Pulaski Chancery Court; Frank H: Dodge, Chaiicellori: affirmed: ?,-. ..i4 Hal: L.-Norwood, Attorney General-, and Walter L. Pope,: Assistant; for -appellant. • :. • • • • , Lee,c and Colein'am,• & Riddià4 for. appellee. ' • Marvin:B: Norfleet., amieus..ouriae. ''' • SMITH, J. Appellee brought' this suit in the Pulasi6 Chancery Court against the State Highway Commission to recover the 'value of certain labor performed -and . materials furnished in the conStructioni of , three • bridges on State •Highway NO .-.! 1, MOre- partichlarly described as Job -No: -1-1059-S, • and from a . decree hi: his 'favor , is tbis appeal. • • -• : • • • The contract- is similar -in all- essential: respeets to the One' sued on in--the recent • Casecof Leonard v: State' ex rel. Attorney General; 185 'Ark:, 998, 50 •S—W . (2(1). 598, and;: like • the ContraCt there 'involved; IS . unenforceable as such, for the reason that it was not let in the manner and form prescribed by law. We said, in the Leonard case, supra, that the only question involved in that appeal, and the only question which we decided, was
ARIL] ARK. STATE ENVY: ` GO1N. i. /). KEAT01■T. 307 that of the :validity •of the contract sued' on, and We held that it was not enforceable as a contract, for the reason thafthe statute had ; not been complied with In 'letting it. • In , :the' later case O 'f Arkiiii'sas State Highway Com-TAis .sioii v. Dodge, 186. Ark:640, 55. 8. W..(2d)"71, snit Was broiight ur3on another siMilar . cOntraCt'tol.i-eCoVer.(. /ita41`- tuot merwit for the' aitie O'flabor ariclthaterial's furnishecl bY . the Plaintiff . ' in the ` *COnStinction of 'Pertions of the State'highWay sYSteni. A Writ -dtii6hihitien was •Airayea ai kainkt * the 'chancellor prOSidini; upOil :the' .grOuncrthat bik Court . was. withont jtiriSdiaidn , to hear and . determine the case. "The wHt was dethed fer . the' . reason there" stated '''thaf the' conrt beloW has jurisdiction to hear anil deterMine the cinestion'of liability of' the Connnission,. and ifs' extent,. for the werk , and material of .whiCh . it has received the • benefit." It will be Observed that the direction to the, court below was' not to aSsess' damages for the breach o . f a contract, -forAbere was no . Contract ,enforce-. able as' &la; but to deterMine the value ,of the . work an& material of 'which the COMiniksfOn had received': the benefit: . • • • • . _ In the case last • , cited .we,reviewed . the conflicting views . of : 'the . .in.enihers , 1Of ;the:court which:resulted:in Composite oPinion authorizing suits.against the. Highway, Commission, and, injhat,connection, will he seen . that, out . of . the, c,onflicting,yies . of a majority of the several members of the court, a . very, definite result has been 'reached, that in a proper case the Highway Commission . may be sued ,when authority for the bring-. ing* Of the , suit may , be- found in , the statiite. Since this is the effect of , the holding in:both the .Podge . and -Baer • cases, supra,.we . think itjmore irnportant . that this question be definitely ,.settled,. than 4„' too: firm insistence -be: held , to our in dividual,yiews, -and we now hold: that, in all : cases . where the . statute' authorizes . a suit; •it , may'he maintained . , against the:Highway Commission, • whether it be , thought to , be a juristic .person or..whether: Of article 5 (of the Constitution) -be- merely, declaratory of - the general doctrine .that-the 'State • may 'not 'be sued in her courts unless' she bas consented thereto.'" The oPinion
308 ARK. STATE _Hwy . Com._.v. KEATON. [187 then cited the legislative acts under which this authority-has been conferred. At the time of the rendition of the opinion from which we have just quoted, it was a mooted qUestion whether § 17 of act 15 of the Special Session of 1932 was valid legislation as being within the purview of the Gov- ernor's call convening the extraordinary session of the General Assembly at which act 15 had been passed. Acts of extraordinary, session, 1932, , page 34. Without deciding the validity of this section of act 15 we there said: "The question of the validity of this act is now pending, but, whether valid or not, it is an indication of the legislative will, but without it the authority sufficiently appears, and, if the act be upheld, it of itself makes absolute that intention." This opinion was delivered on November 28, 1932, and on December 5, 1932, the opinion in the case of State Note Board v. State ex rel. Attorney General, 186 Ark. 605, 54 S. W. (2d) 696, was delivered in which it was expressly held that § 17 of, act 15 was authorized by the proclamation of tbe Governor convening the extraordinary session of the General As- sembly which passed the act. This § 17 recognized that there were outstanding many claims against the Highway Commission which had not been adjudicated or paid, and authorized the State Note Board to issue notes in payment, with the proviso, however, that "* * this act shall not validate any claim; voucher, or warrant or other evidence of indebtedness issued under or pursuant to an illegal contract, and provided further that no note or notes shall be issued in lieu of any such claim in excess of $150 where such claim is based on a cost plus contract or a contract not let on competitive bidding until such claim is approved and the issuance of such notes are authorized by the State Highway Audit Commission, or until the validity of such claim is finally a-djudicated and determined by a court of competent jurisdiction." We are aware of no legislation which has repealed § 17, supra, either expressly or by necessary implication, 'although the provisions of that section with respect to the manner of payment of these claims appear to have been changed by the provisions of act 167 of the Acts of
ARK.] ARK. STATE Hw y. COM. V. KEATON. 309 the 1933 Session of the General Assembly, which was approved March 28, 1933, and, having an emergency clause, became a law on that date.. The decree from which this appeal comes was rendered February 21, 1933, and directed the Highway Commission to issue a voucher to the plaintiff for the amount adjudged to be due him. The subsequent act 167 requires a modification of the decree . in this respect, as the provisions of that act must be followed. Section 1 of act 167 reads as follows : "The issuance of Arkansas State Bonds, hereinafter called State bonds, is hereby authorized in a total sum equal to the aggregate of the entire outstanding. indebtedness of the State on account of the construction and maintenance of the State Highway system, including all State Highway notes or bonds, toll bridge bonds, revenue bonds, valid outstanding road district bonds on which the State has been paying interest under act No. 11 of the Acts of 1927 and act No. 65 of the Acts of 1929, hereinafter called road district bonds, certificates of indebtedness issued or authorized under act No. 8, approved October 3, 1928, and act No. 85 of 1931, short term notes issued under act No. 15, approved April 14, 1932, all valid claims against the State Highway Commission and all warrants and vouchers issued by the State Highway Commission prior, to February 1, 1933, together with the interest on the respective obligations and claims. Such bonds shall be the direct obligation of the State, for the payment of which, principal and interest, the full faith and credit of the State and all its resources are hereby pledged. They shall be dated May 1, 1933, shall be payable in twentY-five years, and shall bear interest' at the rate of three per cent, per annum, the interest to he payable semi-annually, and to be evidenced by attached interest coupons." Section 5 of act 167 reads as follows : " The bolder of any State Highway note or bond, toll bridge bond, revenue bond, valid road district bond or short term note issued under act No. 15 may deposit the same with the State Treasurer for exchange for a State bond of equal face value. All other obligations and claims mentioned in § 1 shall be presented to and examined by. the' State
31O--ARK. (j187 Refunding Bar1'áiid,if allowed; may 'be preseited'to the State Treasurer, iith the certificate of allowance, and exchanged for a State bond'of- the face value of -'the amount allowed by the board. " ' The claim here uéd on; being' ethbraced in the provisions of § 5, .upra, will 'be presented to' the State Re: fuiding' Boad, but, as its validity has been app-rqved by a'colirt of 'competent' jurisdiction; tior"tO the passage of act 167 and that deciee -is affirm'dd by t, foI the rca-sons hereinafter- statd, th Refundi'ng"Board will, as to this particulr claim, have only the miñitrial duty to perform of certifying the. claith for allowance, for exchange for a Sta.te'bon& ': . We have construed this act 167 because it relates to the manner of enforcing the decree from which- this ap peal comes, although the Att'oiiiey General says in his excellent brief that "The o1ily 'question involved in this case is whether the State is under a liability to the appel-lee Keaton for n'iaterials' furnished and services- rendered under an invalid • 'contract, 'oh" what may be ore properly termed, ro contctat all."The'question i• otherwise stated in"thi brief to 'be whether there-is liability fOr the-value of' lboi perforrned-ád-atërials furnished ofw'hich the Higha-Commission-'has -had--the benefit, which cannot' be returned Orrétofed under' the doctrine of q'udntu'n meruit - " ''- ' - ' ' - Through- the diligence of' counsel many cases have been cited and discussed on -this' subject. 'We do not review these cases, as the law of thesubject appears to have' been definitely and frequently-decided, and the only difficulty ' is in the. application' -of settled 'legal principles to particular' facts. ' :' - - - : ' ' ---- In the'instant case it is not contended that there was any fraud or corruptioñ'in the attempt of the parties tO make a binding contract. Nor 'is the contract an immoral one; 'nor was it prohibited by law or public policy; -nor was it in exces àf the power of the Highway Commission to' make. ' The contention is that the contract was not made i'n themanner and form provided by law and' was therefore void, and, this being true,,no enforceable rights can arise out of it.
ARK.] ARK. S'ATEV HWY. Cdk. v. KEAT014. 311 • • hi ! the' class of contract's :first mentiened,%vhichlare inamoral Or illegal . , , br Which. are' prohibited by law' dr puiN lie policy, or which are in excess :of :the, Power . ; of,the Parties to make, .it .is' immaterial . whdth'er 'the. contract has beeh partially or-wholly performed, or whether, the consideration' has pasSed,onnot. The colirts. lend ho:!aid to the enforcement -Of such 'cOntraetS. liThis stibject was reviewed . somewhat 'extensively in . the-case :of Carfer , v. Bradlej COtj KciadJmp,-Dist:s. Nos:,1:aind 2, 155 Ark. 288,:246- S: W. . 9, where ! recovery on.a!Dittntum.7 1neruit Was denied:for the reaSoh :that the- plaintiff th(establiSli: his case, was compelled to: prove arid rbly-on.a contraêt pro'- hibited by law: ; . ' : The instant . case arises ! out. of an:attempt:on the part of the Highway. Cohimission . to. cOntract With the plaintiff for the conStruction, of bridges' as a Part:of the: State highway system. The law empowering the. commission to make and let the contract was not : complied with,: and for this reason only the cOurts wili not enfOrde The agree.: ment of the *parties in relation theretoccorcling tb its ternis. . The . Highway. ComMission had the ;poiVer :ail& was under the dutY to! havethe ,bridges. built." The. law Toni ferred expresS power . upon . the ..CoMmisSion.. i The bridge§ were buil-Wand the questithi iS whether:the value thereof shall be paid:.. . The case of ClarkW. United' State,4, 95 539;waS one in which officers-of the.Unifed States Were'Lahthorized to enter into Tentracts . 1.113oif ! behalf' of ; the ! gOvernment, but the statilte eonferrinethaf lautherit'Y .required that such contracts, be, 'reduced' tj t writing and-be' sighed :by., the contracting' Parties; .l ivbich7 statutewas there' Con:.-• strued to be_ mandatory and in effect to prohibit and to. render: uhlaWf any other Mode : Of Makingithe''contract ; ketr the government haVihk-receiVedthe benefitS of the contract,' it . was Atiot6 , a • -lieddilotcii % that. case; that: "Where; hOWever; aparbl-eohtracf or partly exeeuted 'oh one' side* . , thd! partY perfOrniiiiki Will' - be . thititled to reCoVe'r 'the' Nat* '17:fe'of his proPertf-bri Services: as' lipori an implied : :contract f`or' meiwit." See also 13:iavion'''C'cif'''Co. Co:, 171 IT: S: 138, 5:' Ct.' 808 ; Mdsh'i/. Fulti C :; O M' 9, Tr
-312, . ARK.- STATE HWY..-,COM. V. KEATON. .[187 10 Wall. 676, 77 U. S. 676 ; Louisiana v. W ood, 102 U. S. 294 ; City of New Y ork v. Davis, Director General of Railroads, 7 Fed. (2d) 566. The case of Forrest City v. Orgill, 87 Ark. 389, 112 S. W. 891, was one in which the city purchased and installed a machine to be operated in connection with its waterworks system..The opinion in that case recited that : " This contract was not authorized by any ordinance, resolution or order of the city council wherein the yeas and nays were called and recorded, as required by § 5473 of Kirby's Digest, nor wa g it ratified by any formal action of the city council. The contract was therefore void. Cutler v. Russellville, 40 Ark. 105." But, immediately following this statement of fact, the court proceeded to say : "A different principle prevails, however, where a contract, which is within the power of the municipality to make, is made without authority, but passes from an executory state, as it was in Cutler v. Russellville, supra, to an ,executed one, where the benefit is retained by the municipality. Then it is held .that the municipality cannot retain the property which might properly have been purchased for it in proper Manner and defeat a recovery for the price thereof, or recover back the price if paid. Frick v. Brinkley, 61 Ark. 397, 83 S. W. 527 ; Springfield Furniture Co. v. School Dist., 67 Ark. 236, 54 S. W. 217 ; Book v. -Polk, 81 Ark. 244, 98 S. W. 1049 ; Texarkana v. Friedell, 82 Ark. 531, 102 `8. W. 374; School Dist. v. Good-win, 81 Ark. 143, 98 S. W. 696; Luxora v. Jonesboro, L. C. (6 E. Rd. Co., 83 Ark. 275, 103 S. W. 605." Numerous , other cases to the sanie effect are cited in the brief of counsel for appellee and in the brief filed by amicus curiae. • We conclude therefore that, a benefit -having been received which cannot be returned, which was derived from an agreement between parties having power to make it, which was neither illegal nor immoral, nor . in violation of public policy, but which agreement cannot be enforced according to its terms because not made in manner and form provided by law, a recovery was. properly permitted. The decree, modified in the respect hereinabove indicated, must therefore be affirmed, and it is so ordered. KIRBY, J., dissents.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.