Rice v. Bd. of Trs. of Haywards

Van Fleet, J. By this action the plaintiffs sought to have canceled and annulled a certain contract entered into between said defendant board and the defendant McMullin for the construction of a sewer system for the town of Haywards, and an injunction to restrain the execution and carrying out of the provisions of said contract.

Judgment went for defendants denying the relief sought, from which, and an order refusing a new trial, the plaintiffs appeal.

1. The objection that the action of the defendant board in letting the contract is void as being in contravention of section 865 of “An act to provide for the organization, incorporation, and government of municipal corporations” (Stats. 1883, p. 93), is without force. That section, it is true, forbids the board of trustees of a city or town to “ create, audit, allow, or permit to accrue any debt or liability in excess of the available money in the treasury that may be legally appropriated for such purposes”; but that section has no application to the facts of this case. Here the authorities of the town were providing for a public improvement, requiring an expenditure in excess of the amount allowed for such improvement by the annual tax levy of the town, and the proceedings of the board were taken under and in pursuance-of the act commonly known as the “Municipal Indebtedness Act.” (Stats. 1889, p. 309.) That act is a general act, and makes provision for just such contingencies as that confronting the authorities of the town of Haywards in this instance. Its purpose is declared in [401]the initial section which provides: “ Any city, town, or municipal corporation, incorporated under the laws of this state, may, as hereinafter provided, incur indebtedness to pay the cost of any municipal improvement, or for any purpose whatever requiring an expenditure greater than the amount allowed for such improvement by the annual tax levy.” The subsequent sections provide a method of procedure for accomplishing the purpose desired, with which the acts of the defendant board in this instance would seem to have been strictly in accord. And in the cases provided for therein the act is controlling. (In re Wetmore, 99 Cal. 149.)

2. Nor was there any such irregularity in the manner of letting or awarding the contract as to affect its validity.

The board was justified in rejecting, or refusing to consider, the two bids which it threw out. The findings, which are fully supported by the evidence, show that the one bid was put in by a town official, who could not lawfully take the contract; and the other was clearly a collusive and fraudulent bid. It was not requisite for the board, in making a record of its action on rejecting these bids, to also make an entry of their reasons for so doing, and the fact that the minutes of the board contained a statement of what purported to be their reason in the premises did not preclude the latter from showing at the trial what in fact occasioned their act. The action of the court, therefore, in admitting evidence as to that fact, was not erroneous.