Rittenhouse v. Mayor of Baltimore

Bartol, J., delivered the opinion of this Court. The bill of exceptions in this case presents the question of the liability of the appellee, upon a contract made with the appellant, for brick-mason’s work and materials to be done and furnished in the erection of an alms-house. The contract ivas made under an ordinance of the city, approved April 28th, 1860, which provided for the purchase of a site and the erection of a new alms-house. After the buildings had been commenced and some work done by the contractors, an ordinance ivas passed and approved on the 5th of April, 1861, reciting that a farm had been purchased from A. W. Goldsboro ugh for the site of anew ³⁴⁶ alms-house-, which is now ascertained not to he suitable or adapted for the purpose, because it is unhealthy; and declaring that the public good required the building to he discontinued, and the site to he abandoned, and another more suitable to be selected.

It repealed the ordinance of 1860, and directed the committee having charge of the work to settle with the contractors, as far as it could be done, uj>on fair and equitable terms. No settlement having been made with the appellant, he brought this action to recover damages for a breach of the contract made with him by the appellee. By the hill of particulars filed he claimed: 1st. His actual outlays in the preliminary steps for executing the contract, $500.00. 2nd.

An indemnity against his liabilities towards those with whom he had contracted, to enable him to fulfil his contract with the city, $7,500.00. 3rd. Damages equivalent to the profits which he would have realized on said contract with the city if he had been permitted to execute the same, $20,000.00. In considering the rights, powers and liabilities of public municipal corporations, in respect to contracts made by them, regard must he had to the subject matter to which such contracts relate, and the character in which the municipal body acts in making them. "Where the corporation appears in the character of a mere property holder, and enters into a contract with reference to such property as any private citizen or other proprietor might do; or where it engages in an-enterprise, not necessarily connected with or growing out of its public capacity, as a part of the local government; there-all its rights and liabilities are-to he measured and determined by the same rules as govern mere individual persons, or private corporations; and it cannot claim exemption or immunity from the legal liabilities growing out of its contracts- ³⁴⁷ by reason of its public municipal character.

The cases of Bailey vs. The Mayor, &c., of New York, 3 Hill, 531 . Masterton vs. The Mayor, &c., of Brooklyn, 7 Hill, 61 , and The Western Saving Fund Society vs. The City of Phila., 31 Pa., (7 Casey,) 175 & 185, are illustrations of this principle. See, also, Moodalay vs. The East India Company, 1 Brown's Ch. R., 469.

The same cases recognize a distinction between the rights and liabilities of municipal corporations growing out of contracts made by them, in their private capacity, as property holders, and those which arise out of the exercise of powers entrusted to them in their municipal character exclusively for public purposes, with regard, to which Courts have no power to review or control their acts, unless they transcend the limits of their delegated powers. In the case of The Presbyterian Church vs. The Mayor, &c., of New York, 5 Cowen, 538, which was an action by the church against the city upon a covenant for quiet enjoyment, the corporation had conveyed lands to the plaintiff for the purpose of a church and cemetery, with a covenant for quiet enjoyment; afterwards the corporation, in the exercise of a pow'er delegated to it by an Act of the Legislature, passed a by-law prohibiting the use of the lands as a cemetery. It was held that this was not a breach of the covenant which entitled the plaintiff to damages, but was a repeal of the covenant. It was held that a municipal corporation cannot, by contract, abridge its legislative power.

The ground of the decision was, that while the liability of “the defendants upon the covenant was the same as if it had been entered into by an individual, the effect of the by-law upon it was the same as if this had been an Act of the State Legislature.” The rule as stated in 3 Salk., 193, was applied, viz: “If H. covenants to do a thing which is lawful, and an Act of Parliament