Stigall v. City of Taft

In Stigall v. City of Taft (1962) 58 Cal.2d 565, a city council member participated in preliminary matters leading to the adoption of a contract, then resigned before the formal award of the contract. (Stigall, supra, 58 Cal.2d at p. 567.) The council member claimed that, because he had resigned before the contract was "made" in the strict contract sense, he was no longer in the class of persons who could not enter into a proper contract with the city at the time when the rights and duties of the parties came into being pursuant to the city's acceptance. (Id. at p. 569.) The Supreme Court disagreed, noting that in enacting the conflict of interest provisions, the Legislature was not concerned with the technical terms and rules applicable to the making of contracts, but instead sought to establish rules governing the conduct of government officials. (Id. at p. 569.) The court stated the object of the conflict-of-interest statutes "is to remove or limit the possibility of any personal influence, either directly or indirectly which might bear on an official's decision, as well as to void contracts which are actually obtained through fraud or dishonest conduct." (Ibid.) Accordingly, the court refused to construe the word "made" in a narrow and technical sense, holding that it encompassed the planning, preliminary discussions, compromises, drawing of plans and specifications, and solicitation of bids that led up to the formal making of the contract. (Id. at pp. 569, 571.) In Stigall v. City of Taft (1962) a member of the city council (Black) was also in charge of the city's building committee, which supervised the drawing of plans and specifications and call for bids for the construction of a civic center. Black was also the owner of a plumbing company that submitted the low bid for the plumbing work on the project. When objections were made to Black's possible conflict of interest, the city rejected all bids and reopened the bidding process. Black's company was again the low bidder. This time, Black resigned from the city council just before it awarded the construction contract to the company that was using Black's bid. The issue then was whether Black could be said to have "made" the contract within the meaning of section 1090. The Supreme Court acknowledged that a contract had not been made, in a legal sense, until the city council accepted the construction company's offer, which in this case did not occur until after Black's resignation. But the court then went on to say that "if we were to hold that the purpose sought to be accomplished by the enactment of the statutory conflict-of-interest provisions could, by such strict construction, be so easily frustrated, we would necessarily close our eyes to the clear legislative intent." (Stigall v. City of Taft, supra, 58 Cal. 2d at p. 569.) It therefore concluded: "the negotiations, discussions, reasoning, planning and give and take which goes beforehand in the making of the decision to commit oneself must all be deemed to be a part of the making of an agreement in the broad sense. The instant statutes are concerned with any interest, other than perhaps a remote or minimal interest, which would prevent the officials involved from exercising absolute loyalty and undivided allegiance to the best interests of the city." (Ibid.) It is these preliminary discussions and negotiations, the court pointed out, that give the resulting contract "its substance and meaning." (Stigall, 58 Cal. 2d at p. 570.)