• 460 MCCRORY v. RICHLAND TWP. RD. IMP. DIST. [171 • MCCRORY v. RICHLAND TOWNSHIP ROAD IMPROVEMENT DISTRICT. Opinion delivered June 14, 1926. HIGHWAYS—IMPROVEMENT DISTRICT—PROSPECTIVE PROFITS.—In a suit by -subcontractors against a road improvement district, organized under a special act of extraordinary session of 1920, fot profits which they would have made if permitted to perform the contract, which the district claimed wa§ so improvident as to be invalid, testimony as to what performance would have cost is . admissible to show the reasonable cost, though the profit as • between contractor and subcontractor does not concern the dis-triet. 2. HIGHWAYS—IMPROVEMENT DISTRICT—VALIDITY OF CONTRACT.—A road improvement district is not bound by a contract signed, at different times and places, by two of the three commissioners; such signatures . not having been .obtained as a result of the action of the board of commissioners at a meeting at which all of the members were either present or had notice. 3. HIGHWAYS—IMPROVEMENT DISTRICTS—POWER TO CONTRACT.—The authority of commissioners of . road improvement districts to make contracth is not absolute and unlimited, for ' they do not contract -a individuals, -but as representatives- of the public dnterest. 4. HIGHWAYS—IMPROVEMENT DISTRICTS—POWER OF COURTS TO :REVIEW CONTRACTS.—While the courts will not review contracts made by the commissioners of a road improvement district when there is involved-merely a question of judgment, the courts have a right to interfere where it is made to appear that a contract made by them is so recklessly improvident as to indicate a conscious or reckless indifference to the interests of the district. Appeal from Monroe Chancery Court ; John 111. Elliott, Chancellor ; affirmed. 'Bogle & Sharp, for appellant. Boss Mathis and Lee & Moore, for appellee. SMITH, J. Richland Road Improvement District was organized by an act of the General Assembly passed at an extraordinary session in 1920, and it is the contention of appellants that the district entered into a contract with appellant Ran McGregor to do certain construction work, and that McGregor, with the consent of the district, sublet the work to McCrory and Mitchell, but the district
ARK.] MCCRORY V. RICHLAND TWP. RD. 1MP. DIST. 461 wrongfully refused to permit appellants to perform their contract, and this' suit was brought to recover damages resulting. from this breach. • s - The court found that there was no valid contract, and '.dismissed the 'complaint. Appellee road ithprovement district' insists' that the testimony supports the finding made, and' further insists :that the contraCt Was so •grosly • improvident as' to be - beyond the power of the commissioners to. make: As we haVe concluded that appellee is correct in the second proposition, we do not 'consider the first. • 'By the terms of the contract the district agreed to ; pay" McGregor for unloading, hauling, spreading and rolling gravel .$1.481/2 cents per yard for the first mile and 54. cents extra for each. additional mile. • • McGregor - iMmediately : sublet the contraet to-McCrory end:Mitchell fory$1.25t for the first mile_ and .40 cents extra for eaCh ladditional mile. -. The contract contemplated the spreading of something, Over 70,000' yards, and the • profit to McGregor would. therefore : have been, according to the figures of the engineer of the district $16,860.44. -The subcontractors made proof that they could have laid . down and spread the gravel for- 50 cents for the first mile , and 25 cents for each additional mile. . • " The subcontractors'were parties plaintiff, And-sought to: recover from 'the district' the profits they: would have made had they been . permitted to •perform their sUbcon-: tract, and_in. suppdrt 'of their suit they offered testimony showing , what the _ actual performance of - the • contract would.: have cost. - The. district was, ,of course, not concerned about the. Profits in the cOntract between the principal contradtor , and-. the stbcontractors, but : this testi-- molly is competent. to shoW what the reasonable- cost -of the -work was, and, -according to -the testimony of the plaintiffs themselveS, 'the district had _ agreed to pay 1$1.48y2 Tor the first mile and 54 cents- for each additional , mile, • whereas .the actual-cost of 'doing the Work was -50 cents for the 'first mile, with . 25 cents added for each .additional mile.
462 MCCRORY V. RICHLAND TWP.. RD. IMP. DIST. [171 We do not set out the testimony showing the circumstances under which the contract was executed which led the court below to the conclusion that no valid scontract • had in fact been made. It suffices-to say that -the Signatures of two of the commissioners were secured at dif-. lerent timeS and places, and neither , read the , contract before signing it. UnquestionablY the contract did not -become a valid one, notwithstanding these two signatures, - because they were hat obtaihed as a result of any-action -Of the Ward of commissioners had at a . meeting at whith 'all Were 'present or af-which all had notice.< - The theory of appellants is that tile' contract was ratified at a meeting . Of the cominissioners of which all • ; had . - 'notice and at • which the; commiSsioners were present. We 'do not Pass upon this question of ratifiCation ' because, in Our opinion, the contract *as one which the ` • distriet had no right to make, and, as no work waS- done i 'under , it, -the district 'is not liable-fOr its breach. -At the meeting 'at which the • contract wasàid to -have been ratified; the conunissioner wha did not sign and- whd protested- against -its ratification, painted' out assOciateS the reckles . s improvidence of the' can-. tract,.•and'it does not appear: to )3e questioned that this-commissioner named a reSpOnsible contractOr Who stood ready to enter into a wHting with the districtto do the' Work required-by the . contract- at ! a 'price' s$18,000 leisthanthe aihount the . cohtract With IteGregorrequired • - the district to pay:: It Will' be remembered that appellee district is - qUite a small one, cOmparatively speaking. .We s have in a number of l caSeS considered the-poWer of commissioners to make .. contraets of this kihd;'among 'the earliest- of whieh are- the- cases . of Seitz V. I llieriwe-' s ther, 114 Ark. 289, and Sain v. Bogle, 122 Ark 14. In the case of BayeAtll I eta Drdinage District v. Chap-143 Ark. 446, it was- Said: "The' commi.ssieners, as public agents under the statute, as we have seeny are-not clothed with arbitrary power in the matter of fixing 'fees of-attorneys. They-are acting as trustees for the public,
ARK.] MCCRORY v. RICHLAND TWP. RD. IMP. DIST. 463 and must have an eye to the interests of those whom they serve—the prOperty owners who pay all the expenses incident° to ; the improvement. They must be guided, in entering into the, contract of employment with attorneys and fixing their compensation, by what would be . 4 reasonable compensation for seryices which the attoxneys are Actually . to :render. It was not the purpos,e„of the statute.to , confer upon the commissioners absolute power to :contract with .the attorneys for fees, that . would. exorbitant and unreasonable for. the services rendered the district. -NA:T hile the- presumption. is that these public agents' will conscientiously discharge their duties, yet ;it is not.impossible, and indeed is , entirely within the.,range of probability,.that unreasonable , and ,unconscionable,fees may occasionally be agreed upon between the attorneys and commissioners. A statute giving the commissiolieTs absolute . power . in. the , premises to thus squander the money of the t4payers, leyied for ,the purposes of mak- . ing.the improyement, would be contrary to pUblic policy. ? ' In the ;case of ; Sike,s v. Douglas, 147 Ark. 469, we said: ' , Appellee, as a taxpayer, has a right of action to prevent the performance of such a . contract.if it be found to he grossly excessiye and unreasonable. . Seitz v. Meri-Wether, 114 Ark. 289. 'The conimissioners had f no authority to , enter into a contract for, payment of an unreasonable fee to an engineer. Sain v. Bogle, 122 Ark. 14 ; Bayou Meto Drainage Dist. v. Chapline, 143 Ark. 446." In the case of Bowman?, Engineering Co. v. Arkan-sas & Mo. Highway Dist., 151 Ark. 47, we said: " • We have said that' contracts made by the 6oinniissioners with the assessor for the amount of fee must be reasonable in order to be valid and • binding. The commissioners have power to make contracts; but they are trustees of the property-owners, and can only Make reasonable ones. The owners of the property have a right to challenge the validity of such contracts by shoWing Mat they are uhrea-sónable. Of course, in testing the validity , of suCh contracts, the court should not substitute its own judgment primarily for that of the commissioners, the authority
464 [171 to-make the contract being •.odged by the lawmakers in the commissioners, but the inquiry of the court is to determine whether or not the contract is so improvident as to ' demonstrate its unreasonableness." These cases -were all reviewed and reaffirmed in the case 'of Vaughan v. Woodruff-Prairie Road Dist. No. 6, 158 Ark: 236. • , The result of all these cases is that the authority of commissioners of-road improvement districts to make contracts is not absolute and unlimited. They do not-con-- tract as' individuals, but as representatives of the public • interest. - The courts will 'not undertake to review mere questions of discretion, for the power of the commissioners to act is fully recognized, and the courts twill' not therefore substitute their judgment for that of the commissioners of the district when there is' involved merely a question of judgment. But when it is made to appear ihat there was a conscious or reckless indifference to the ' interests of the district, which•the commissioners are sup-, 'poeed: to represent, the courts have the right to inter-' fere upon the ground that the commissioners have exceeded the power . conferred upon them by law. - We think- this showing- was made here, as the con- tract , Was so recklessly improvident as to indicate no ' intention or purpose to protect the public interest. The decree of the court below, which dismissed the complai _ nt asbeing without equity,is therefore affirmed.
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.