Kutsche v. Ford

• Decision Date: 23 March 1923
• Docket Number: No. 20.,20.
• Citation: 222 Mich. 442,192 N.W. 714
• Parties: KUTSCHE v. FORD et al.
• Court: Michigan Supreme Court

222 Mich. 442

192 N.W. 714

KUTSCHE

v.FORD et al.

No. 20.

Supreme Court of Michigan.

March 23, 1923.

Appeal from Circuit Court, Wayne County, in Chancery; Howard Weist, Special Judge.

Suit by Arthur W. Kutsche against John Ford and others. Decree for plaintiff, and defendants appeal. Affirmed.

Argued before FELLOWS, McDONALD, BIRD, SHARPE, MOORE, and STEERE, JJ. Frederick J. B. Sevald, of Detroit (Chas. E. Duffy, of Detroit, of counsel), for appellants.

Ralph M. Tate, of Detroit, for appellee.

PER CURIAM.

The trial judge filed an opinion which we adopt:

‘School district No. 5, Springwells township, Wayne county, wanting a new school building erected, according to plans and specifications prepared by architects, the school board advertised for competitive bids. Each bidder was required to deposit a certified check equal to 5 per cent. of the bid made, to be forfeited in case of acceptance of the bid and refusal of contract by the bidder.

‘Plaintiff is a contractor and bidder residing in Detroit, and, after examination of the plans and specifications, prepared his estimates and on the day appointed for opening the bids filed his bid, proposing to furnish the necessary labor and material to complete the school building for the sum of $63,660. At the request of plaintiff the opening of bids was deferred an hour or so, in order that he might finish the preparation of his bid.

‘Upon receiving plaintiff's bid, the school board, at the offices of the architects, proceeded to open all the bids filed, some nine or ten in number, and, finding plaintiff's bid the lowest, awarded him the contract and directed the architects to prepare the necessary contract and bond forms and to notify plaintiff of the acceptance and of the fact that the board would meet the next Saturday to approve his bond and execute the contract. The bids were opened on Saturday and on Monday the architects mailed a letter to plaintiff by depositing the same in the mail box in the Union Trust Building, notifying him that he had been awarded the contract, and that the bond forms were ready for signature, and the school board would meet the next Saturday to execute the contract.

‘The next day after filing his bid, and after it had been accepted by the school board, but before plaintiff knew that he had been awarded the contract, he went over his figures and discovered that he had left out of his estimate the cost for plastering the building, amounting to the sum $6,400, according to an estimate that had been furnished him by a plasterer. Upon making this discovery he telephoned one of the architects and informed him of the mistake and said that he did not want the job at the price he had bid, and on Monday following the opening of the bids on Saturday, and before he actually received the letter notifying him that he had been awarded the contract, he prepared a letter, addressed to Mr. Haggerty, clerk of the school board, as follows: ‘This is to inform you that we did not include the plastering in the new school building to be erected on Lois avenue, south of Michigan avenue, in our proposal to you of February 23. This will amount to sixty-four hundred dollars, in addition to our figure submitted. We regret very much that this error was made and withdraw our former figure and ask that you return our certified check amounting to thirty-two hundred dollars.’

‘Having prepared the letter, plaintiff went to the residence of Mr. Haggerty the same day, and being there informed that Mr. Haggerty was not at home, he left the letter with a lady he supposed to be Mrs. Haggerty. Mr. Haggerty has never been married and on the day in question had a housekeeper, who is now dead, and he never received the letter.

‘On Saturday the school board met to execute the contract and for the first time learned of plaintiff's mistake and that he would not enter into contract according to his bid, and thereupon the school board caused the check, given by plaintiff, to be cashed and the money is now on deposit to the credit of the school district. New bids were advertised for and the contracts let, a little over two weeks later, for the sum of $69,440, the plaintiff making no bid.

‘Plaintiff files the bill herein to have his bid canceled and to save his deposit from forfeiture, and asks that the school board be decreed to refund him the $3,200. The school board acted in good faith and without any knowledge or suspicion of the mistake made by plaintiff, and claim that plaintiff, by refusing to execute the contract, has made the school building cost the district $5,780 more than his bid, and insist that plaintiff should not be granted relief. Under the evidence it is clear that plaintiff inadvertently omitted from his estimate the cost of plastering. The refusal of plaintiff to execute the contract made new bids necessary as the board could not go back to the old bids and award the contract to the next lowest bidder. Twiss v. City of Port Huron, 63 Mich. 528, 30 N. W. 177. All the parties have acted in good faith.

‘Upon this record can plaintiff be granted relief? I am satisfied that his remedy, if any, is to have rescission or cancellation of his offer or bid decreed. The point has been made that, upon acceptance of his bid and notice thereof by depositing the same in the mail, he could not withdraw his offer. Conceding such to be the law, it does not follow that the court may not grant rescission. It is undoubtedly true that, filing a bid, as plaintiff did, upon invitation, was an offer intended of itself, if accepted, to create legal relations beyond the power of one party to sever without liability, because no future negotiations were contemplated and nothing remained to be done beyond reducing the same to form strictly in accord with the accepted offer. But this does not put the matter beyond the power of the court of equity to relieve the plaintiff from the ruinous consequences of his mistake, provided the school district can be said to be left thereby in statu quo. It is also true that no contract relation existed until notice of acceptance of the bid was given plaintiff.

‘Plaintiff contends that the notice, to be sufficient, had to be received by him in fact, and he is not to be held to have had notice of acceptance from the time the letter giving it was placed in the mail for transmission, and therefore his letter withdrawing his bid precluded contract relations. This position cannot be maintained. His letter of withdrawal was never received by Mr. Haggerty. Revocation, to warrant release, must be shown to have been received by the other party. The question of whether the notice of acceptance of the bid dates from the mailing of the letter, is interesting, and, while not of decisive importance in this case, the matter having been argued, I shall express an opinion thereon.

‘No particular method of notification of acceptance having been designated by plaintiff, the school board had a right to make the service by mail. Wilcox v. Cline, 70 Mich. 517, 38 N. W. 555. ‘One who makes an offer, knowing that it is to be accepted when the offerer is not in personal communication with the offerer, contemplates acceptance by mail or telegraph with the corresponding legal consequences.’ Page on Contracts (2d Ed.) § 211.

‘The great weight of modern authority is to the effect that the acceptance is operative, if made by mail, from the moment that its transmission begins. Patrick v. Bowman, 149 U. S. 411, 13 Sup. Ct. 811, 866,37 L. Ed. 790;Brauer v. Shaw, 168 Mass. 198, 46 N. E. 617,60 Am. St. Rep. 387. Depositing the letter in the mail box instead...