Angel v. Murray

Facts

Maher had provided the city of Newport with a refuse-collection service under a series of five-year contracts beginning in 1946. On March 12, 1964, Maher and the city entered into another such contract. It ran from July 1, 1964, to June 30, 1969, and paid Maher $137,000 per year to collect and remove all combustible and noncombustible waste generated within the city. The city awarded that contract after full compliance with the bidding provisions of its charter. In June of 1967 Maher asked the city council for an additional $10,000 per year. He said collection costs had risen substantially because of an unexpected increase of 400 new dwelling units. His uncontradicted testimony was that the 1964 contract rested on an average increase of 20 to 25 new units per year since 1946. After a public meeting where Maher explained his reasons and council members questioned him, the council agreed to pay an additional $10,000 for the year ending June 30, 1968. In June of 1968 Maher made a similar request for the same reasons. The council again agreed to pay an additional $10,000, this time for the year ending June 30, 1969. The city manager had not recommended either payment in writing. Angel and others then sued to make Maher repay the $20,000.

Issues

1. Does the Newport charter provision allowing contract alterations when authorized by the council on the city manager's written recommendation bar the council from amending a contract without that recommendation?
2. Is a promise to pay extra compensation for work the contractor was already bound to do enforceable without new consideration, when the parties voluntarily modified an unfinished contract after unanticipated circumstances arose?

Holding

The charter did not stop the city council from amending the contract without the city manager's written recommendation. The $10,000 payments were enforceable modifications despite the preexisting duty rule, because the council agreed voluntarily, the contract was unfinished, the 400-unit increase was unanticipated, and the court could not say the payments were not fair and equitable.