June 5, 2006
Dear Alderperson:
The most recent question that has arisen in connection with the additional salaries
illegally paid to certain city council members during their terms of office in lieu of insurance,
which payments were recently ruled illegal by a trial court, is: Can the city council ratify the
illegal payments, thereby making such payments to those city council members legal?
The answer is no. A city council cannot ratify the illegal payments of money. It is said in
4 McQuillin, Municipal Corporations, ' 12.217, that “Ratification or legalization by the
municipal council or governing legislative body of wrongful disbursements of public funds has
not been permitted.” It is also said in 4 McQuillin, Municipal Corporations, '13.47, that
“Generally, a governmental body may effectively ratify what it could previously have lawfully
authorized...There can be no legal confirmation or ratification of ultra vires acts, nor of acts
under a void law....”
That is also the law in Tennessee. In City of Lebanon v. Baird, 756 S.W.2d 236 (Tenn.
1988), the Tennessee Supreme Court discussed at length the effect of ultra vires contracts. It
pointed to two kinds of ultra vires contracts: (1) Contracts wholly outside the scope of the city’s
authority under its charter or a statute; and (2) Contracts not undertaken consistent with the
mandatory provisions of its charter or a statute. It declares that in the latter kind of ultra vires
actions, the court will weigh the equities to determine if the action should be voided, including
the equity of whether the contract is executory.
Although Baird was speaking of ultra vires contracts, that case clearly points to the
proposition that ultra vires payment of money that are illegal are payments of the first kind; that
is, they are outside the scope of the city’s authority. Baird makes it clear that where the charter
or statute (and, obviously. the Tennessee Constitution) does not authorize the action in question,
the action is ultra vires and void or voidable, and that is the end of the inquiry. For that reason,
equity will not intervene to permit the ratification of that illegal act.
Sincerely,
Sidney D. Hemsley
Senior Law Consultant
SDH/