City of Detroit v. Michigan Paving Co.

36 Mich. 335 | Mich. | 1877

Campbell, J:

The provisions in the charter of Detroit forbidding the execution of public works, except under contract with the lowest bidder, were intended to prevent any action whatever, whereby contractors could make private arrangements with the council for payment for work done or to be done in such cases. If the letting of a contract is only required as a preliminary form, and if, as soon as it is broken, the council and the contractors may make any arrangement they choose in regard to payment for work done, it is evident that there will be yery little safety against such mischief as was meant to be guarded against. No suit can be brought until the council has been given an opportunity to settle without suit, and if there is power to settle at all, the power is plenary. The question is not whether frauds are likely or not. The legislature has seen fit to provide against arrangements not open to competition, by requiring all contracts to be let* impartially, and it is for bidders to determine the risks themselves.

There is no difficulty in bringing actions for quantum meruit against corporations any more than against individuals, so far as they are not guarded by charter against them. Where the city has had money or property belonging to others, it may doubtless be compelled to answer; but the law has not left this corporation to enter into contracts generally, or without restrictions never imposed on private parties. Individuals are held liable outside the terms of a contract which has been broken, for work done for their benefit, because a contract is implied, and because they are capable of entering upon implied contracts as far as they choose without resorting to express and formal agreements.

But this city has no such power in regard to' public improvements. Its contracts must not only be express, but conformed to certain conditions and let under certain supervision. Work done in paving a street, or the like, without any contract, would not in any case be a charge against the city under the law. And work partially done under a broken contract, which cannot as a written contract be enforced by suit, stands as. if there were no contract, so far as any action is concerned. Unless the contract itself provides some remedy in such a case, the case seems to be without remedy.

The city has no power to prevent such difficulties, and is not responsible for them. If contractors tear up a street and fail to pave it properly, or to complete their work, as they have agreed, they have not put the city in the wrong for not paying them. The corporation would be guilty of misconduct in making express contracts for bad work, or for work intended to be left unfinished. It is impossible to tell what contracts they might have obtained if bids were received on such offers. If liable at all when the work is left undone, the liability arises at once, aud without reference to any future contract they may be enabled to make for the completion according to the original plan. There is no possible standard for determining the amount,' unless by disregarding the chartered conditions.

The doctrine of implied assumpsit in favor of a defaulting contractor is comparatively modern; and while it is generally equitable, it is in some cases very unjust, as a person is sometimes compelled to put up with such work as he would not have been willing to accept on any terms, because it has some pecuniary value, and cannot well be undone or removed from his land. It is a very easy matter for any contractor to make such terms as will entitle him to installments of compensation as his work progresses, and to make special terms for all accidents and innocent failures. It is a very difficult thing for a public corporation to watch over its contractors and their doings, as a private party would; and for this reason it needs special safeguards. The charter is intended to provide these, and it has done so.

The city could not be expected or required to detach from the freehold the worlc not paid for, even if it could be identified, which would be impossible, inasmuch as it was an undistinguishable proportion of an entire job. The material not incorporated in the pavement, stands on a different footing. It did not belong to the city, and its proceeds, therefore, were not properly receivable or retainable. For these there is a liability arising out of a wrong, and not out of contract; and the form of the remedy in assumpsit, waiving the tort, does not prevent the maintenance of the action based on the facts.

The judgment should be reversed, with costs, and a new trial awarded.

Marston and Graves, JJ., concurred. Cooley, Ch. J:

This action is brought to recover the value of labor done and materials made use of in the grading and paving of a portion of St. Antoine street in the city of Detroit. The work was begun by the defendant in error under a contract with the city, bearing date June. 23, 1874, by the terms of which the work was to be completed on or before the 15th day of September, 1874. The clause in the contract regarding compensation is as follows: “And it is further mutually agreed that the common council will cause a special assessment to be levied upon all lands or lots fronting or abutting upon said St. Antoine street, lying between Adams avenue and Division street, in consideration of the materials to be furnished and the labor to be performed, by said parties of the second part; and it is further agreed by the said party of ' the first part that party of the first part will pay over to said parties of the second part the avails of all special assessments levied and collected on lands liable by law, which shall be paid into the treasury of said city for or on account of such special assessments: Provided, That the party of the first part shall have the option to pay to said parties of the second part any portion, not1 to exceed three-quarters of the contract price of said work and materials, in street paving bonds, in accordance with the charter and ordinances, in lieu of such assessments or moneys to be collected therefrom. But the said city of Detroit, party of the first part, shall not be liable for any part or portion of said special assessments until the same shall have been actually paid into the treasury of the said city.”

The bill of exceptions recites that evidence was introduced “showing that the plaintiff proceeded to perform said contract and finished a portion thereof, which was accepted and paid for; that the plaintiff also did certain grading, set curbstones and furnished a quantity of sand, all of which was of the value to the defendant of sixteen hundred thirty-eight and sixty-five one-hundredths dollars, said amount not exceeding the contract prices; that it was impossible for the plaintiff to fully perform said contract by the fifteenth of September, 1874, the time limited therefor, and the same was not performed on that day; that thereupon the board of public works of said defendant, with the direction of the common council, given on the evening of that day, declared said contract forfeited by the plaintiff, the party of the second part thereto.

“That afterwards the common council entered into a contract with another party to complete the work, using the grading, sand and curbstones therein, furnished by the plaintiff; that the defendant did not suffer any damages by reason of the non-performance of said contract by plaintiff, and is not entitled to any deductions for any such damages from the reasonable worth of the labor and materials furnished by the plaintiff as aforesaid.

“It appeared upon the trial of said cause that at the time of the commencement of this suit, the plaintiff had not presented to the common council of the defendant for audit or allowance the claim aforesaid, sought to be recovered in this case, as required by section 25 of chapter 4= of the charter of the city of Detroit; that said claim was duly and regularly presented by the plaintiff to the common council on the 29th day of December, 1874, but the common council has ever since neglected and refused to audit and allow the same or to provide for its payment.

“That the above is all the evidence introduced, material to the merits of the case.

“Thereupon the court charged the jury that the plaintiff was entitled to recover said sum of sixteen hundred and thirty-eight dollars and sixty-five cents, and to render their ■verdict for the same; to which the defendant excepted.”

I. The first objection made to this recovery is, that under the contract and under the city charter the city cannot be made liable in an action at law, and that the only remedy of the contractor, if -it has any, is through the special assessment. On this point Goodrich v. Detroit, 12 Mich., 279, is thought to be an authority. In that case it was decided that the city could not be liable generally for the contract price of an improvement which by the charter was required to be paid only from a special assessment. It was also decided that no action at law would lie. on the facts of that case. But the facts were, that the amount of the demand was liquidated, and nothing remained but to enforce payment by means of an assessment. We have repeatedly held that under such circumstances mandamus was the proper remedy, and not a suit at law.—Marathon v. Oregon, 8 Mich., 372; Dayton v. Rounds, 27 Mich., 82; Peterson v. Manistee, 36 Mich., 8. But we also held that on the facts of this case mandamus was not the appropriate remedy, the amount not being liquidated, and the city having a right to a trial of its liability in the usual mode.—People v. Common Council of Detroit, 34 Mich., 201. A suit at law is therefore the only remedy. But this suit does not determine that the city is liable generally; it only fixes the amount, and this amount must be collected in the manner provided by the contract.

II. It is also insisted that there can be no implied ■".assumpsit where the charter requires all such work to be let -on public notice to the - lowest bidder. This is probably firme as a rule, though there must be some exceptions. There -is no complaint here that the first contract was not properly det, and it is conceded that every thing done by the defendant in error was done under it. It is also shown that in lletting the contract to a second party, all that had been done by the defendant in error, and its materials on the -ground, were taken into account, and a contract let in due :form on the basis that the benefit of these were to be had by the contractor. There is consequently no claim here for work done or materials furnished outside the contract. The lettings have been public and in due form, and by means of the second letting the city has turned over to another party that which had been done and furnished for it under the first letting. So far as the materials were concerned, the city strictly had no right to do this against the will of the first contractor, who still owned them, notwithstanding the default; but if the contractor does not object, there is nothing in the action of the city in taking them which is opposed to either the spirit or the letter of the law requiring public lettings. The city has the benefit of the law when it lets the contract publicly, with reference to an existing state of facts and to giving to the new contractor the benefit of that which his predecessor has done and furnished. The value of the work and materials is thus taken into account and covered by the new lettings.

Had the contract not been relet, it is conceded that the city would not be liable for work done of which it did not avail itself. An unfinished work cannot be forced upon the city and payment demanded for it. But where the city immediately proceeds to complete the work, and to appropriate the benefit of all that has been done, there is no justice in resisting a claim to payment.

Natural persons are undoubtedly liable under such circumstances.—Allen v. McKibbin, 5 Mich., 449; Lomax v. Bailey, 7 Blackf., 599; Epperly v. Bailey, 3 Ind., 72; Coe v. Smith, 4 Ind., 79; Fenton v. Clark, 11 Vt., 557; Powell v. Howard, 109 Mass., 192; Britton v. Turner, 6 N. H., 481; Clark v. Manchester, 51 N. H., 594; McClay v. Hedge, 18 Iowa, 66; Mather v. Butler County, 28 Iowa, 253; and the same reasons of natural justice apply against municipal corporations with equal force. They are not exempt from an action on a quantum meruit in general: Kinne v. New Haven, 32 Conn., 210; Howard v. Oshkosh, 37 Wis., 242; Clark v. Manchester, supra; and they ought not to be in any case, unless some positive provision ■of law or some principle of public policy is violated or disturbed thereby. In the present case nothing of the kind appears.

III. The objection that the claim was not presented to the council before suit was brought, was not made by the pleadings and cannot he considered. The judgment should therefore be affirmed. But the form of the judgment entry .should be so modified as to show that the right of the city to make payment according to the terms of the contract is not precluded.