Beh Co. v. Des Moines , 228 Iowa 895 ( 1940 )

As I read this record, there is no question but what Will Heywood, an employee of the city of Des Moines, who was at the time assisting as a clerk for the city solicitor, represented that the general taxes on the property covered by the certificates had all been paid.

The city was engaged in settling a lawsuit then pending against it. It was exercising proprietary powers rather than governmental ones, and in conducting proprietary functions the city is to be treated as if it were a private corporation and is subject to the general rules of agency and estoppel. Having ratified the contract of settlement made in its behalf, in my judgment the city of Des Moines should be estopped to deny the authority of the agents who made the contract, the same as any private principal would be.

As stated by this court in First National Bank of Red Oak v. Emmetsburg, 157 Iowa 555, 568, 138 N.W. 451, 456, I quote:

"There is, in our opinion, no legal reason, and there certainly is no moral one, whereby a municipal corporation should be permitted to reap the benefit of a fully completed contract and escape liability therefor under the plea of ultra vires, where the power exists to contract, but the same has been exercised in a negligent manner and even so irregularly as to release noncontracting parties from liability. That a city may be estopped under such circumstances is well settled by our own decisions."

I would affirm the trial court.

I am authorized to state that OLIVER, J., joins in this dissent.