Dunlap v. Erie Water Commissioners, 151 Pa. 477 (Pa. 1892)

Opinion by

Mr. Justice McCollum,

On the 13th of June, 1884, the Water Commissioners of the city of Erie entered into a contract with J. Louis Linn of said city to furnish the material and do all the work necessary to

construct, complete and place in position according to tbe specifications attached thereto, a wooden inlet pipe to be located at the water works, Erie, Pa., and for which they agreed to pay Linn the sum of $3,625. The parties, having afterwards ascertained that the space between the piers or lower cribs, in which the wooden tube was to be located, was insufficient to allow the insertion of a tube of the size required by the specifications, agreed, on the 30th of June, 1884, that the size of the tube should be reduced to four feet three inches inside diameter. It appeal’s that John Dunlap was a partner of Linn and jointly interested with him in this work. It also appears that the parties entered into the contract in a mutual misapprehension of the condition of the space between the piers. They supposed that it was free from obstructions but on removing the roof it was found to be filled with clay, sand, sticks, and other substances which had been forced into it and had become compact and difficult to excavate. When this condition was discovered the contractors refused to proceed with the work unless the commissioners would agree to compensate them for excavating and removing the material so accumulated. It was readily recognized by both parties as a condition at variance with their former understanding of the situation, and for which no provision was made in their contract. The commissioners then directed the contractors to proceed with the work and agreed to pay them for the additional labor made necessary by this unexpected condition. The original contract as modified by the agreement of June 30fch respecting the size of the tube, was completed and the extra work was done, to the satisfaction of the commissioners. The claim of the contractors for extra work is now resisted on the ground that the action of the commissioners with reference to it was informal, and was not entered by their secretary upon the books of the water department. It is conceded by the learned counsel for the appellants that the fourteen specifications of error really raise but one question, and that is whether the agreement in respect to compensation for extra work is binding upon the corporation.

It is settled by the verdict that the parties were mutually mistaken as to the condition of the space between the piers and that upon the discovery of their mistake it was agreed between them that the excavation and removal of the material accumu

lated there should be regarded as extra work for which the contractors should be compensated, and further, that the agreement to pay for this work was by the commissioners as a board and not as individuals. It is not denied that the commissioners had power to make an agreement of this kind, on which the corporation would be liable, but it is contended that the power should be exercised at their office in the presence of their secretary and that their official action should appear in the minutes kept by him of their proceedings. We agree that the practice suggested by this contention is desirable and that a departure from, or failure to adopt it is likely to result in confusion and litigation, but we cannot assent to the proposition that an agreement which the commissioners were authorized to make, and the benefits of which the corporation has enjoyed can be invalidated as a corporate obligation by their neglect to reduce it to writing or to cause a proper minute thereof to be entered in their books. A corporation is like an individual in its capacity to contract, appoint agents, and incur ordinary liabilities : Am. & Eng. Ency. of Law, vol. 4, page 242, and cases there cited; Ins. Co. v. Shaw, 94 U. S. 574. It is true that it must exercise the powers conferred by its charter in the manner prescribed therein or by statute, but in the absence of a regulation defining the mode in which it may incur contractual liability it is free, within the scope of its charter powers, to enter into engagements in any form which the law recognizes as valid between individuals. In this ease the power to make contracts for'the erection and completion of the water works and to provide for the repair and maintenance of the same is lodged by the act of April 4, 1867, with the commissioners. The agreement to pay for the extra work is an exercise of this power and there is nothing in it, either of substance or form, which is violative of any provision of the statute. The cases cited by the appellants do not sustain their contention. In Cooper and Grove v. Lampeter Township, 8 Watts, 125, the point decided was that one supervisor cannot bind the township for the erection of wing-walls to a county bridge. In Allegheny County Workhouse v. Moore, 95 Pa. 408, the plaintiff “ utterly failed to show that any corporate action was taken by the board by virtue of which he was employed or by which the power to employ him was delegated to any member of the

board or to the superintendent,” while in this case the commissioners as a board agreed to pay for the extra work.

We have carefully read and considered the instructions and testimony and our conclusion is that the case was correctly •decided in the court below.

The specifications of error are overruled.

Judgment affirmed.