Appeal by plaintiffs from the Circuit Court of Edgar county;
the Hon. BEN F. ANDERSON, Judge, presiding. Heard in this court
at the October term, 1951. Reversed and remanded with directions.
Opinion filed November 6, 1951. Released for publication December
MR. PRESIDING JUSTICE O'CONNOR DELIVERED THE OPINION OF THE COURT.
On April 15, 1940 the plaintiffs, a law firm at Decatur, Illinois, entered into a contract with the City of Paris, Illinois, to do certain designated legal work as special counsel in connection with a municipal utility proposed to be constructed by the City. Under the terms of the contract plaintiffs were to receive 3% of the cost of the project for their services, payable out of the proceeds of the sale of public utility certificates to be issued.
In the spring of 1940 the cost for the plant was estimated to be $820,000.
An ordinance was passed on August 26, 1940 which contained provisions that the bonds to pay for the construction of the utility were to mature in blocks beginning December 1, 1945. A second ordinance was passed calling an election to submit the matter to the electors for their approval or rejection. The ordinance was approved by vote of the electors. Considerable litigation followed, including two appeals to the Supreme Court, all of which was conducted by the plaintiffs. Finally, on September 21, 1942 the litigation was concluded, but at that time, due to the scarcity of materials and labor, work could not proceed without government priority orders. The City was not able to secure the priorities.
By the summer of 1945 the war was over, and an estimate was made by the engineers that the plant and distribution system could be built within the original estimate. However, it was doubted that the bonds which were to mature December 1, 1945 could be sold within such a short time prior to their maturity. Therefore, the old ordinance was amended changing the dates of maturities of the bonds.
The amendatory ordinance was submitted to a referendum held in December 1945. The amendment was not approved.
In January of 1947 the engineers made a new estimate and due to rising costs, determined that the plant and distribution system would cost $1,400,000, instead of $820,000 as originally estimated.
In April 1947, one of the commissioners was elected mayor and four new commissioners were elected who had never served before.
In September 1947, a conference was held with the plaintiffs and the members of the council. The mayor and one commissioner stated they would like to go ahead with the project if it could be built as originally planned and at the original cost. One commissioner stated that he was opposed to the project. Two other commissioners thought that the project had been voted down by the people at the election of 1945.
In May 1948, plaintiffs had a conference with the city attorneys and presented their bill for services. After the City had failed to do anything for a year, plaintiffs filed suit on May 27, 1949.
The matter was heard before a jury in the circuit court of Edgar county which returned a verdict finding the defendant not guilty. Plaintiffs filed a motion for judgment notwithstanding the verdict and for new trial, both of which were overruled. Judgment was entered on the verdict. Plaintiffs appeal from those rulings.
There does not appear to be any dispute about the general proposition of law that if a municipality undertakes a public work to be paid for not out of its general fund, but out of the revenue of the public work when completed or revenue securities to be issued, and in the prosecution of that undertaking employs attorneys or engineers to be paid out of such special fund only, and before its completion the municipality abandons such public work, it becomes liable to pay for the services rendered by such attorneys or engineers out of its general funds, and such attorneys or engineers are not required to look for payment to the special fund which may be nonexistent. Plaintiffs have cited the following cases in support of this proposition: DeLeuw, Cather & Co. v. City of Joliet, 327 Ill. App. 453; DeLeuw & Co. v. City of Charleston, 298 Ill. App. 403; Gray v. City of Joliet, 287 Ill. 280; Woods v. Village of LaGrange Park, 298 Ill. App. 595, 617; Murrie v. Harper, 249 Ill. App. 586; Markman v. Calumet City, 297 Ill. App. 531; Chalstran v. Board of Education, Dist. 13, 244 Ill. 470; Bunge v. Downers Grove Sanitary Dist., 356 Ill. 531; Maher v. City of Chicago, 38 Ill. 266.
We have examined these cases and they sustain the proposition for which they are cited. The defendant has not even questioned the proposition or attempted to distinguish the cases. The defendant contends that it is not liable because of the terms of the contract which it made with the plaintiffs and calls attention particularly to section 6 thereof, which is as follows:
"6. It is mutually agreed that (a) if the acquisition and operation of said public utility shall not be approved by the electors of City, (b) if the issuance of said public utility certificates shall not be approved by the electors of City, or (c) if subsequent to elections approving the acquisition and operation of such public utility and the issuance of said public utility certificates, City shall be required to abandon or desist from the acquisition and/or operation of said public utility by final judgment, order or decree of any court of competent jurisdiction in a proper proceeding, and City, in compliance with such judgment, order or decree, shall abandon or desist from the acquisition and/or operation of said public utility, City shall not be obligated nor liable, out of its general funds, to pay any compensation to Special Counsel for services theretofore rendered by them and required of them by the terms of this agreement, but nothing herein contained shall be held or construed to release City from its liability to compensate Special Counsel for services performed by them under this agreement, if after the approval of the acquisition and operation of said public utility ...