Waterman, Hays and Anderson, Circuit Judges.
In this action the plaintiffs are seeking the specific performance of a contract entered into by them with the Bristol Redevelopment Agency, acting as agent for the City of Bristol, Connecticut, for the sale by the plaintiffs and the purchase by the Redevelopment Agency of real property in Bristol. On the basis of certain admissions by the defendants in their pleadings and on the strength of three affidavits, the plaintiffs moved for summary judgment. This motion was denied by the trial court, first, on the ground that the authority of the assistant director of the Agency to make a particular statement in a letter which was a part of the writings evidencing the contract, presented a genuine issue of material fact and, second, on the ground that there appeared to be a question, not briefed or argued by counsel, relating to the authority of the Agency, itself, to bind the City of Bristol because of the applicability of § 7-348 of the General Statutes, State of Connecticut, Revision of 1958, as amended.*fn1
Shortly after the hearing on plaintiffs' motion, the defendants filed a motion for summary judgment and the parties were given an opportunity to file additional depositions, affidavits and other evidential material. The trial court granted the defendants' motion and dismissed the plaintiffs' action. It is from this judgment that the plaintiffs appeal. We reverse the judgment and remand the case for trial on the merits.
For the purpose of this appeal the plaintiffs, as non-mover appellants, are entitled to have the evidential material presented by them and the reasonable inferences to be drawn therefrom taken to be true. Jobson v. Henne, 355 F.2d 129 (2 Cir. 1966). So regarded the facts of the case appear to be substantially as follows:
The three appellants, known as Entin Associates, were, during the period with which this case is concerned, the owners of a tract of land, with factory buildings on it, in the City of Bristol. They had purchased the property from the Ingraham Company in 1960 and immediately leased the premises back to the grantor. Ingraham employed over a thousand people in Bristol and was a major taxpayer. By 1962 it became known that Entin Associates had constructed a new factory on their property in Farmington pursuant to an agreement with Ingraham to move its operations there and occupy and use the new factory under a long term lease. The loss of so substantial an employer and taxpayer caused considerable concern in Bristol and the then Mayor, Walter J. Murphy, Jr., other officials and civil groups developed a plan to keep Ingraham in Bristol. In essence the plan called for the acquisition by the Bristol Redevelopment Agency of the property of Entin Associates for an urban renewal project and the application for a loan for that purpose by the Bristol Redevelopment Agency, of which Mayor Murphy was chairman, to the Federal Housing and Home Finance Agency (HHFA). The plan also called for the construction of a new factory for Ingraham on another site in Bristol. Essential to the making of these arrangements was the release by the plaintiffs-appellants of Ingraham's obligations under the Farmington lease.
On March 9, 1962 the Agency filed its application for a loan for early land acquisition with the Regional Director of HHFA for the area, Charles J. Horan, who, after making a study of the project recommended to the Washington headquarters of HHFA that the sum of $2,367,670, including $2,232,836 for real estate acquisition be reserved for the purpose. On October 25, 1962 HHFA in Washington approved the recommendation and allocated the stated sum as capital grant funds for the project.
Meanwhile, in early 1963 the City negotiated with Entin Associates to release Ingraham from its commitment to lease the Farmington factory property. Entin Associates agreed to release Ingraham in consideration of the promise of the City to purchase the Entin Associates' Bristol property at its fair market value to be determined by qualified appraisers, provided the City accelerated the purchase of the property by early land acquisition procedures with the HHFA. To this the City agreed and Ingraham was released from its obligations relative to the Farmington property. The Agency, on behalf of the City had made two appraisals of the property of Entin Associates: one was by appraiser Adams on January 4, 1963 who reported that the fair market value of the property, including machinery, was $1,461,600; the other on January 25, 1963, was by appraiser Marsele, who stated that the value of the same property, also including the machinery, was $1,513,000.
On March 19, 1963 the City Council of Bristol voted to approve the early land acquisition for the purposes mentioned and agreed to assume certain contingent costs in connection therewith. On April 3, 1963 the Agency filed with HHFA a formal application for early land acquisition in which it sought a loan of $2,258,000 of which $1,934,000 was estimated to be the cost of the purchases of real estate, including that of Entin Associates. Thereafter the HHFA reviewed all of the circumstances of the application and made field surveys. On May 24, 1963 the Urban Renewal Commissioner of HHFA gave Regional Director Horan written authority to proceed with early land acquisition and advised him that $2,190,530 had been allocated as a temporary loan and approved for expenditure. On May 31, 1963 Director Horan by letter advised the Agency of the authority to proceed and of the allocation of funds in accordance with the approved project expenditures budget to cover six months of early land acquisition activities. It empowered the Agency to incur costs in conformity with the budget in advance of the execution of a formal loan contract. He advised the Agency that the contract would require full data concerning property being acquired, submission of the second appraisal and HHFA's approval of maximum prices to be paid.
On June 17, 1963 the Agency recommended that HHFA approve $1,461,600, the lower of the two appraisals, as a fair maximum purchase price for the property of Entin Associates. Thereafter Brennan, Chief of HHFA's land acquisition staff, and Fantozzi, an HHFA land appraiser, examined the property in question for the purpose of determining whether or not the sum of $1,461,600 was a fair maximum acquisition price. They decided that it was and recommended it to the HHFA, which notified the Agency on July 18, 1963 that it was authorized to purchase the property of Entin Associates for that amount or less.
The Agency thereupon commenced final negotiations with Entin Associates and a purchase price of $1,315,000 was agreed upon. The appellants on July 22, 1963 made a written offer of the sale of the property to the Agency at the agreed price and on July 23, 1963 the Agency, by unanimous vote of its members, accepted the offer and, as specified in the offer itself, endorsed its acceptance thereon. On July 24, 1963 it also gave written notice of the acceptance through a letter to Entin Associates from the Agency's assistant director.
On June 27, 1963 a temporary loan contract, drafted by HHFA, had been sent to the Agency for signing. The Agency signed and returned it to HHFA for countersigning. At about the same time the parties were informed of Executive Order # 11114, issued by the President on June 25, 1963, requiring that such contracts include certain nondiscrimination provisions. The written contract was accordingly amended, and resubmitted to the Agency on August 30, 1963. As amended it was executed by the Agency and submitted to HHFA, which countersigned it on September 24, 1963, thus making available the funds necessary for the project. The trial court stated, and it does not appear to be questioned, that this loan contract is still in effect. On October 7, 1963 the Agency requested that it be sent the proceeds of the loan. Thereafter, however, no payment or tender of payment of the agreed sum was ever made by the Agency for the purchase of the Entin Associates' property, and the present action was brought to secure specific performance.
The trial court, in effect, held that it was compelled to grant the defendants' motion for summary judgment and to dismiss the plaintiffs' action because the Bristol Redevelopment Agency had no authority under the circumstances to purchase the plaintiffs' property. Its line of reasoning was that no official or agency of a municipal corporation, such as the City of Bristol, could enter into a contract which would make the City liable for a sum in excess of the uncommitted balance of the appropriation for the department to which the official belonged or of which the agency was a part, because of the prohibiting provisions of § 7-348 of the Connecticut General Statutes. The trial court was of the opinion, however, that in the present case it would not be necessary that the City technically appropriate money to cover the purchase in question if the funds were made available through another source, i.e. the HHFA, which would take the place of such an appropriation and afford the safeguard to the taxpayers of the City which the statute was intended to provide. It then addressed itself to the question whether or not such funds had been made available to the Agency and decided that they had not been because it was undisputed that HHFA had refused to pay over the money. Therefore, there being neither an appropriation nor its equivalent from another source, the Agency was without authority to contract for the purchase of the property.
While we do not say that § 7-348 could not under any circumstances apply to a redevelopment agency or an officer of such agency, we are of the opinion that § 7-348 has no application to the present case. The Bristol urban renewal project was initiated and carried forward under Chapter 130 of the Connecticut General Statutes. It was unanimously approved by the Council, the legislative body of the City, acting on the basis of a cost estimate which had been submitted to it and with the understanding that the project was to be financed through a loan from HHFA. This approval, in effect, provided the safeguard against the act of a town or city official in committing the municipal corporation to expenditures beyond the unpledged balance of an appropriation. Once the project was approved by the City Council, the Agency, within the bounds of the project, had ...