Appeal from the Circuit Court of Cook County, County
Department; the Hon. SIGMUND J. STEFANOWICZ, Judge, presiding.
MR. JUSTICE MCCORMICK DELIVERED THE OPINION OF THE COURT.
The Village of Forest View appeals from a judgment entered in the Circuit Court of Cook County against it and in favor of the plaintiff in the sum of $67,292.40. On the original hearing the defendant raised only two questions:
1) Was there a valid contract between plaintiff and defendant;
2) Did defendant abandon the Water Works Improvements and Sewer System for which the plaintiff had drawn plans which were given to and used by the defendant?
From the record it appears that on November 10, 1959, the plaintiff filed a complaint in two counts against the Village of Forest View, a municipal corporation. The Village filed an answer, and a reply to the answer was filed by plaintiff. Count I was based on an oral contract allegedly entered into between the plaintiff and the Village in "the early part of November 1955." This allegation was denied by the defendant. The second count was based on the allegation of plaintiff that a subsequent contract was entered into on April 22, 1957, reducing to writing the verbal agreement which allegedly had been entered into between plaintiff and the Village. The defendant admits that there was such a written agreement but denies that the agreement was legally entered into, and further denies that the written instrument was a reduction to writing of the previous verbal agreement between the plaintiff and the defendant.
From an inspection of the pleadings it appears it was admitted by the Village that the plaintiff, Walter D. Wilson, a resident of Chicago, Illinois, was a duly licensed civil engineer engaged in the practice of that profession, specializing as a consultant and mechanical engineer, having been so engaged for the past 25 years; that the Village, in accordance with the law, proposed certain local improvements to be made in the said Village, which improvements involved the construction of certain water mains, reservoirs, and a pumping station and supply line, hereafter referred to as the Water Works Improvements; and for the construction of the combined sanitary and storm sewer system, which will hereafter be referred to as the Sewer System; that in section 5 of his complaint the plaintiff alleges that "pursuant to [his] employment" he prepared all the necessary plans, specifications, etc. In its answer the Village states, "Defendant admits the allegations contained in Paragraph 5 of Count I of Plaintiff's complaint."
The total estimate of costs for the Water Works Improvements aggregated $942,193, which included the sum of $65,953 for the costs of engineering services for planning and supervision of construction, or a total of $819,708, excluding costs of engineering services and making, levying and collecting the special assessments. The total estimate of costs for the Sewer System aggregated the sum of $997,228, which included the sum of $74,792 for the costs of engineering services for planning and supervision of construction, or a total sum of $862,602, excluding the costs of engineering services and the costs of making, levying and collecting special assessments. Ordinances for the Water Works Improvements and Sewer System were presented to the President and Board of Trustees of the defendant Village, together with the recommendations of the Board of Local Improvement for such improvements. On December 19, 1956, the said ordinances were adopted and approved by the President and Board of Trustees of the Village. On January 11, 1957, plans, specifications and estimates of costs prepared by the plaintiff and approved by the Village were filed in the County Court of Cook County, pursuant to Local Improvements Act (Ill Rev Stats 1955, ch 24, art 84), and identified as Special Assessments Nos. 5 and 6 of the Village of Forest View, for the construction of the Water Works Improvements and the Sewer System.
An important question to be discussed is whether or not a contract entered into by the Village with an engineer (requiring that he prepare certain plans, specifications, etc., as a preliminary step to the processing of certain improvements which were to be paid subsequently by a special assessment) was a valid contract. Ill Rev Stats 1965 ch 24, § 8-1-7, provides:
"No contract shall be made by the corporate authorities, or by any committee or member thereof, and no expense shall be incurred by any of the officers or departments of any municipality, whether the object of the expenditure has been ordered by the corporate authorities or not, unless an appropriation has been previously made concerning that contract or expense. Any contract made, or any expense otherwise incurred, in violation of the provisions of this section shall be null and void as to the municipality, and no money belonging thereto shall be paid on account thereof. . . ."
In the Supreme and Appellate Court cases interpreting this statute we find some contradiction.
The defendant relies upon DeKam v. City of Streator, 316 Ill. 123, 146 N.E. 550 (1925). In that case sixteen taxpayers of the City filed an action to enjoin the City and its officials from paying any further sums to an engineer pursuant to certain contracts between him and the City, under which he had undertaken to design a sewer system. The contract, entered into in February 1919, recited that no prior appropriation had been made but stated that an emergency condition existed as a result of certain sanitary problems. The following May the annual appropriation ordinance was passed which included an item in the amount of $5,000 for the new sewer system. Subsequently, a supplemental agreement was executed which purported to ratify and affirm the prior contract. The engineer completed his work by March 1920, and submitted his plans and specifications together with his bill for $34,263. In May 1920, an appropriation ordinance for the next fiscal year was passed which included a similar item and amount for the new sewer system. From the two appropriations the engineer was paid a total of $8,000, and prior to plaintiffs' filing their action the City Council passed a resolution authorizing the payment of the balance of the bill as soon as it could legally be done. The Supreme Court held the contract void as prohibited by law, holding that a contract expressly prohibited by a valid statute is void, and the prohibition of the legislature cannot be disregarded by the courts. The court was relying on the statute then in force. The case is based flatly on the theory that since no appropriation of money had been made the contract of February 14, 1919 was void and consequently could not be ratified, nor was the City estopped to question the legality of the contract since a city cannot be estopped where a contract is ultra vires.
In Simpson v. City of Highwood, 372 Ill. 212, 23 N.E.2d 62 (1939), a case which involved the validity of proceedings by the City of Highwood to provide facilities for a water supply to be connected from Lake Michigan to the existing system, the plaintiffs filed a representative suit in the Circuit Court against the City, its officers, the engineer, contractors, et al. The relief prayed was that the ordinance providing for the project and bond issue and all contracts thereunder be declared null and void. The proceedings provided for establishing a pumping and purification plant, etc., to be financed by a federal grant and water revenue bonds payable solely from the income of the completed project. Among other things the plaintiff contended that the expenditures of the proceeds of the bonds, and the contracts for such expenditures were unlawful because there was no prior appropriation for the expense of construction, engineering services or purchase of ground. Defendants claimed that an appropriation was not necessary. The statute we have referred to above was cited and the court held that these provisions were mandatory as to contracts and expenses payable from the general fund; that the proceedings were valid; that it was not claimed that the contracts were to be payable out of general funds, but only out of the special fund derived from the sale of the bonds. The court discussed DeKam v. City of Streator, supra, and stated:
". . . At the time the DeKam contract was made the Local Improvement act made no provision for including engineering services in the cost of the improvement, and they could be paid only out of the general funds of the city. Subsequently the statute was amended and now permits the expense of engineering services to be included as a part of the improvement to be defrayed by special assessment or special tax. We have never held that contracts for or the expenses of constructing the portion of a local improvement which are not to be paid from general funds of a municipality must be preceded by an appropriation. The DeKam case is not controlling here. The contracts and expenditures in this case are in many respects analogous to those under a local improvement proceeding."
People ex rel. Anderson v. Village of Bradley, 367 Ill. 301, 11 N.E.2d 415 (1937), was a mandamus suit brought to compel the Village to pay certain judgments obtained against it. The Village had entered into a contract with one Connors for the construction of a sewer. The sewer was built, accepted, and the acceptance duly confirmed. A subcontractor filed a proceeding to establish a lien. The Village filed a cross-petition and brought into the proceeding the contractor and all the subcontractors and interested parties. Some contractors filed intervening petitions to establish their liens. An account was taken and the Circuit Court entered a decree which found that there was a balance due the contractor in the sum of $41,577.10. It was further found in the decree that the Village had wrongfully diverted over $25,000 from the special assessment fund. Judgment was entered against the Village in favor of the subcontractors and the administratrix of Connors, who was the contractor, and the court found certain various amounts to be due each. The defendants contended that the relators had a claim only against the funds to be derived from the special assessments to be collected from the territory specially taxed for the local improvement, and that the effect of the judgment would be to compel the taxpayers of the city, generally, to pay the several judgments when no such liability existed originally. The Supreme Court stated:
". . . As the situation existed at the inception of the contracts between the contractor, subcontractors and the village, the liability was limited to the funds collected from the special assessment levied. The change in the positions of the parties has been brought about by the default and misfeasance, if not malfeasance, of the village, acting through its governmental officials. The ...