Skutt v. City of Grand Rapids

• Decision Date: 06 April 1936
• Docket Number: No. 125.,125.
• Citation: 275 Mich. 258,266 N.W. 344
• Parties: SKUTT et ux. v. CITY OF GRAND RAPIDS et al.
• Court: Michigan Supreme Court

275 Mich. 258

266 N.W. 344

SKUTT et ux.

v.CITY OF GRAND RAPIDS et al.

No. 125.

Supreme Court of Michigan.

April 6, 1936.

Suit by Roger Skutt and wife against the City of Grand Rapids and others. From a decree of dismissal, plaintiffs appeal.

Affirmed.

FEAD and POTTER, JJ., dissenting.

Appeal from Superior Court of Grand Rapids, in Chancery; Thaddeus B. Taylor, Judge.

Argued before the Entire Bench.

Linsey, Shivel & Phelps, of Grand Rapids (John H. Vander Wal, of Grand Rapids, of counsel), for appellants.

Ganson Taggart, of Grand Rapids, for appellees City of Grand Rapids et al.

BUSHNELL, Justice.

This is an appeal from an order dismissing plaintiffs' bill of complaint. June 21, 1934, the city commission of Grand Rapids passed a resolution authorizing the employment of taxpayers who were delinquent in their 1929 and 1930 tax. This work was conducted under the supervision of the city manager and Louis Boynton, his assistant, was put in charge of the problem. A rate of $:387 per hour was fixed for this labor, but only as a credit upon delinquent taxes.

Plaintiff performed sufficient labor to offset his unpaid 1930 tax and received therefor a quitclaim deed from the city in satisfaction of this tax on his Duiker avenue property. He also owned property on Fourth street upon which defendant State Savings Association held a defaulted mortgage and the association was the owner of other properties upon which the 1930 tax was unpaid.

Plaintiff conceived the idea, that by working out some of the association's unpaid taxes, he could secure substantial credits from it upon his past-due mortgage. It is his claim that these facts were disclosed to Boynton, who suggested that the association make application to the city for such purpose, and that such an arrangement was entered into by the parties hereto.

The record shows that plaintiff then employed men to do this work for him; the association received credit therefor upon its unpaid taxes and in turn credited Skutt in the same amount upon his mortgage indebtedness. These men were paid by plaintiff at the rate of about $9 per week, $3 in cash and $6 in trade allowance at his secondhand store. The labor consisted of trimming trees, mowing lawns, and other work for the city's park department, the city's allowance upon unpaid taxes for the work of one man for an entire week amounting to $18.55.

An injury to one of the workmen so employed raised the question of the liability of the city and the necessity of indemnification. The city attorney participated in this discussion and subsequently the city manager directed his assistant to ‘stop the men that were working out their taxes.’

The testimony is in dispute as to whether the entire facts pertaining to this unusual arrangement were fully disclosed to the proper city officials before their approval of the plan. For the purpose of this appeal, however, we must assume the allegations of the bill and the testimony of plaintiff to be true.

Skutt claims that there is still due him the sum of $1,030.58, and he prays that a decree be entered requiring the city to allow this credit to the association upon its unpaid taxes and that defendant association be required to give plaintiff credit in an equal amount on his mortgage.

The trial judge was of the opinion that the case involved a question of public policy and embodied his conclusions in these words in the decree:

‘It appearing to this court that the alleged arrangement made by plaintiff with one Louis Boynton, was not authorized by the city commission of the city of Grand Rapids; that no authority was delegated to said Boynton to make the arrangement, and that the same was contrary to action theretofore had by the city commission, and the charter of said city, and it appearing further that said Skutt had no contractual relations with said city, and further that the carrying out of said arrangement with said Skutt would be an appropriation of public money for the benefit of said Skutt and contrary to public policy.

‘And it further appearing that plaintiffs have not made out a case against the said defendant, or any of them, now therefore,’ etc.

The decree dismissed the bill of complaint.

The quitclaim deeds from the city were given in the following manner: The city comptroller issued a request to the city commission in this form:

‘This department respectfully recommends that quit-claim deeds be issued to the following parties, who are owners of the properties hereinafter described, which were sold for taxes as specified. The full amount of taxes, including interest and penalties in each case has been paid.’

The commission then voted on the question and when its affirmative action was properly authenticated by the city clerk, the deed issued.

The relief sought by plaintiff is confined to amounts which he claims are due from the city because of work performed by the men whom he employed. No questions as to plaintiff's own services are involved. He has been paid for his work or has received credits therefor.

We might dispose of the matter by merely concurring in the observation of the trial judge that ‘even if Mr. Boynton did advise plaintiff that he could hire men to work out taxes, no such authority was delegated to Mr. Boynton or to the city manager by the city commission and the assumption of such power conferred no legal rights upon the plaintiff.’

Municipal corporations “have no inherent jurisdiction to make laws or adopt regulations of government; they are governments of enumerated powers, acting by a delegated authority; so that, while the state Legislature may exercise such powers of government coming within a proper designation of Legislative power as are not expressly or impliedly prohibited, the local authorities can exercise those only which are expressly or impliedly conferred, and subject to such regulations or restrictions as are annexed to the grant.' Cooley's Constitutional Limitations (7th Ed.) pp. 163, 264, et seq.' City of Kalamazoo v. Titus, 208 Mich. 252, 262, 175 N.W. 480, 483.

We neither find any statutory authority for the arrangement in question, nor does the city of Grand Rapids claim that its lawmaking body possesses authority to make or perform such a contract.

Appellant says, however, that: ‘The trial court bases its conclusion solely upon the fact that the arrangement made was contrary to public policy and that public funds could not be used to carry out this purpose because the plaintiff would be enriched at the expense of the taxpayers.’

We have considered the arguments in support of appellants' statement that ‘this holding on the part of the court is ridiculous and entirely unfounded.’

The rule of public policy as enunciated by Mr. Justice Story was adopted by this court in McNamara v. Gargett, 68 Mich. 454, 36 N.W. 218, 221,13 Am.St. Rep. 355. He said:

‘Public policy is in its nature so uncertain and fluctuating, varying with the habits and fashions of the day, with the growth of commerce, and the usages of trade, that it is difficult to determine its limits with any degree of exactness. It has never been defined by the courts, but has been left loose and free from definition in the same manner as fraud. This rule may, however, be safely laid down, that wherever any contract conflicts with the morals of the time, and contravenes any established interest in society, it is void, as being against public policy.’ Story, Cont. § 675.

‘The principle that contracts in contravention of public policy are not enforceable should be applied with caution and only in cases plainly within the reasons on which that doctrine rests.’ Twin City Pipe Line Co. v. Harding Glass Co., 283 U.S. 353, 51 S.Ct. 476, 477, 75 L.Ed. 1112, 83 A.L.R. 1168; 6 R.C.L. 710.

We adopt as did the trial judge the following from Pittsburgh, C., C. & St. L. R. Co. v. Kinney, 95 Ohio St. 64, 115 N.E. 505, 506, L.R.A.1917D, 641, 643, Ann.Cas.1918B, 286:

‘What is the meaning of ‘public policy?’ A correct definition, at once concise and comprehensive, of the words ‘public policy,’ has not yet been formulated by our courts. Indeed, the term is as difficult to define with accuracy as the word ‘fraud’ or the term ‘public welfare.’ In substance, it may be said to be the community common sense and common conscience, extended and applied throughout the state to matters of public morals, public health, public safety, public welfare, and the like. It is that general and well-settled public opinion relating to man's plain palpable duty to his fellow men, having due regard to all the circumstances of each particular relation and situation.

‘Sometimes such public policy is declared by Constitution; sometimes by statute; sometimes by judicial decision. More often, however, it abides only in the customs and conventions of the people-in their clear consciousness and conviction of what is naturally and inherently just and right between man and man. It regards the primary principles of equity and justice and is sometimes expressed under the title of social and industrial justice, as it is conceived by our body politic. When a course of conduct is cruel or shocking to the average man's conception of justice, such course of conduct must be held to be obviously contrary to public policy, though such policy has never been so written in the bond, whether it be Constitution, statute, or decree of court. It has frequently been said that such public policy, is a composite of constitutional provisions, statutes, and judicial decisions, and some courts have gone so far as to hold that it is limited to these. The obvious fallacy of such a conclusion is quite apparent from the most superficial examination. When a contract is contrary to some provision of the Constitution, we say it is prohibited by the Constitution, not by public policy. When a contract is contrary to a statute, we say is is prohibited by a statute, not by a public policy. When a contract is contrary to a settled line of judicial...