City of Detroit v. Michigan Paving Co.

• Decision Date: 24 April 1877
• Citation: 36 Mich. 335
• Court: Michigan Supreme Court
• Parties: The City of Detroit v. The Michigan Paving Company

36 Mich. 335

The City of Detroit v. The Michigan Paving Company

Supreme Court of Michigan

April 24, 1877

Heard January 11, 1877 [Syllabus Material] [Syllabus Material]

Error to Superior Court of Detroit.

Judgment reversed, with costs, and a new trial awarded.

D. C. Holbrook, for plaintiff in error, argued that the city was not liable on an implied assumpsit created in this manner; that the contract providing expressly that the city should not be liable for any portion of the special assessments until the same should have been paid into the city treasury and that the contractor should depend entirely upon the special assessments, and the charter providing that no such public work should be paid for or contracted to be paid for except out of the proceeds of the tax or assessment levied to pay for the work, and there being no evidence that any such tax or assessment was levied or collected, the city cannot be held liable on the common counts in assumpsit.--Goodrich v. Detroit, 12 Mich. 279; that the difficulty in the plaintiff's case is, that according to the charter the city cannot become directly liable to pay the money without having taken certain statutory proceedings, and the collection of the money or funds, or the neglect of the city to take such proceedings; and the declaration consisting of the common counts only, cannot apply to either of such cases; that whatever may be the law as to apportionment of contracts between individuals, there can be no such thing here as to the city, a municipal corporation, acting as an agent between property owners and contractors; that the charter requires an assessment for the whole work before it is commenced, and the contract is, to pay plaintiff for the whole work when completed, and not before, and the difficulty here is, that there is no authority to collect or pay any apportionment of the work, and if there is no authority to collect it, there can be no liability to pay; that the city is a mere agent between the contractor and the public, and can only be liable in an action on the case for neglect to assess the value of the work done; that the property owners are entitled to a faithful performance of the contract.--Dillon on Corp., § 648. The city contends that it could not and did not accept this work and materials, and the fact that it was used, makes no difference. The law of the case and the charter prohibit the city from purchasing these materials without going through the form of advertising and receiving bids, and a contractor cannot force it on the city in this way, as the city could not impliedly accept or purchase in this way, when it could not by its own act. A proceeding of this kind prevents the city paying three-fourths of this amount in street paving bonds. The claim was not presented to the council for audit and allowance as required by the charter. All claims being required to be so presented, this is a fact to be shown by plaintiff, and this defense is open under the general issue.

Baker & Thompson, for defendant in error.

There is nothing in the provision of the contract as to forfeiture which would forfeit, as stipulated damages or otherwise, the work, labor and materials that was done or furnished in part performance of the agreement. While it may make time the essence of the contract, it is clear that it does not prevent the paving company from recovering on a quantum meruit. It merely compelled the company to stop work on receiving the notice, which would place the company in much the same position it would have been in had it voluntarily abandoned the job.

The city is liable upon a quantum meruit. (1) The work performed by the paving company was reasonably worth, not exceeding the contract prices, the sum of one thousand six hundred and thirty-eight dollars and sixty-five cents, and was of that value to the city; (2) The city sustained no damages which would reduce that sum by reason of the company's failure to fully perform the contract; (3) In completing the work the city used the grading, sand and curbstones, furnished by the company.

The city's liability on a quantum meruit is the same as that of a private person under like circumstances.-- Gas Co. v. San Francisco, 9 Cal. 453; Detroit v. Redfield, 19 Mich. 376; People v. Flagg, 17 N. Y., 586; Gas Co. v. New York, 33 N. Y., 309; Peterson v. Mayor of New York, 17 N. Y., 449; DeGrave v. Monmouth, 19 Eng. C. L., 300; 1 Dillon on Mun. Corp., §§ 383-8.

The original contract with the plaintiff was within the corporate powers, and it was no violation of the charter for the city, in making the contract to complete the work, to use, accept and appropriate the work done and the materials furnished by the plaintiff.--People v. Swift, 31 Cal. 26; Keyser v. School District, 35 N. H., 477; Hoyt v. Thompson, 19 N. Y., 207; Abbott v. Hermon, 7 Greenl. 96; Hayden v. Madison, 7 Id. 76.

It is only where the original contract is absolutely void, and incapable of ratification, that the contractor cannot recover for work actually done and accepted.--Brady v. Mayor of New York, 20 N. Y., 312; S. C., 2 Bosw. 173.

Under the city charter the cost and expense of street pavements, except crosswalks and of the work at the intersection of cross streets, is assessed upon the abutting property.--2 S. L. 1873, p. 1283.

And in the contract in question the city agrees to levy and collect a special assessment upon the property fronting on St. Antoine street, and to pay over the avails thereof to the paving company. A provision was also inserted requiring the company to rely upon such special assessments for payment. But these provisions do not prevent a recovery in this action.-- (1) The city can collect the amount of the judgment by a further assessment.--City Charter, p. 77, § 106; 2 S. L. 1867, p. 1111; Whitely v. Lansing, 27 Mich. 131; (2) This action is necessary to ascertain the amount due and to give the city the benefit of a jury trial.--Mich. Paving Co. v. Common Council of Detroit, 34 Mich.; (3) There is nothing in the city charter which prevents the payment of the plaintiff or prohibits the common council from making the necessary assessment to collect the requisite amount from the abutters.--City Charter, p. 122, §§ 206-7; 3 S. L. 1869, pp. 1723-5, §§ 38, 40, 42; Goodrich v. Detroit, 12 Mich. 279; Brevoort v. Detroit, 24 Mich. 322; (4) No execution can issue against the city. The judgment below can only be enforced by compelling the common council to levy a further special assessment.

The provisions of section 25, chap. 4 of the city charter, do not prevent a recovery in this case: (1) It was a special matter of defense, and notice thereof should have been given.--2 C. L., § 5794; it is analogous to a defense under the statute of limitations; (2) It is sufficient to present the claim to the council after suit is commenced (if it is then rejected), as the only object of the provision is to save the city the costs of suit.

Campbell, J. Marston and Graves, JJ., concurred. Cooley, Ch. J. dissenting.

OPINION

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 very 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 was 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...