Stephenson v. Monmouth Min. & Mfg. Co.

Decision Date07 December 1897
Docket Number482.
Citation84 F. 114
CourtU.S. Court of Appeals — Sixth Circuit

This is an action on the case against the plaintiffs in error, who were aldermen of the city of Menominee, Mich., for failure of the city council of Menominee, Mich., to require a contractor to execute a bond as required by Act No. 94, Laws Mich. 1883 being sections 8411a, 8411b, and 8411c, How. Ann. St. Mich which are as follows:

'8411a. The people of the state of Michigan enact, that when public buildings, or other public works, or improvements are about to be built, repaired or ornamented under contract, at the expense of this state, or of any county, city, village township or school district thereof, it shall be the duty of the board of officers or agents contracting on behalf of the state, county, city, village, township or school district, to require sufficient security by bond for the payment by the contractor and all sub-contractors for all labor performed or materials furnished in the erection, repairing or ornamenting of such building, works or improvements.
'8411b. Such bond shall be executed by such contractor to the people of the state of Michigan, in such amount and with such sureties as shall be approved by the board, officer or agent acting on behalf of the state, county, city, village, township or school district as aforesaid, and conditioned for the payment by such contractor, or any sub-contractor, as the same may become due and payable, of all indebtedness which may accrue to any person, firm or corporation on account of any labor performed or materials furnished in the erection, repairing or ornamenting of such building or works. Such bond shall be deposited with and held by such board, officer or agent, for the use of any party interested therein.
'8411c. Such bond may be prosecuted, and recovery had, by any person, firm, or corporation, to whom any money shall be due and payable, on account of having performed any labor, or furnished any materials in the erection, repairing or ornamenting of such building or works, in the name of the people of this state, for the use and benefit of such person, firm or corporation; provided, that the people of this state shall, in no case brought under the provisions of this act, be liable for costs.'

There was evidence showing that the city council of Menominee contracted with one John Larson for the construction of a public sewer, taking from him a bond, with sureties, in the penal sum of $40,000, payable to the city of Menominee, and conditioned as follows: 'Now, the condition of this obligation in such that if the said contract shall be executed, and the said John C. Larson shall promptly and faithfully perform his said contract, and shall well and truly keep and perform all the terms and conditions of said contract on his part to be kept and performed, and shall indemnify and save harmless the said city council of Menominee and the said city of Menominee, as in said contract stipulated, and said John C. Larson and all his subcontractors shall make payment for all labor performed and material furnished in carrying on or completion of the improvements called for by said contract, then this obligation shall be void; otherwise it shall remain in full force and virtue. ' The charter of the city provides for the election of a city attorney, and constitutes him the legal adviser of the council, and gives him a seat and voice in the council, and makes his approval of all contracts with the city and all bonds to be taken 'as to form and execution' necessary 'before such contract shall take effect. ' The bond actually taken from Larson was in writing, approved, 'as to form and execution,' before the contract or the bond executed by him was approved and accepted by the council. No other bond was required from said Larson. There was also evidence that the defendant in error furnished material and supplies to said Larson to the extent of more than $6,000, which have not been paid for, and which were furnished for the work which he contracted to do, and that he is now wholly insolvent. The plaintiffs in error (who were defendants below) were members of the city council when the contract with Larson was made, and present and assenting to the acceptance and approval of the bond taken from the contractor. There was a jury, and verdict in favor of the defendant in error for $6,676.59, and judgment accordingly.

B. J. Brown, for plaintiffs in error.

E. C. Eastman (F. O. Clark, of counsel), for defendant in error.

Before TAFT and LURTON, Circuit Judges, and CLARK, District Judge.

After making the foregoing statement, the opinion of the court was delivered by LURTON, Circuit Judge.

Public officers having ministerial duties to perform, in which private individuals have a direct interest, are liable to such individuals for any injury sustained by them in consequence of the failure to perform such duties. Amy v Supervisors, 11 Wall. 136-138; Add. Torts (1st Eng. Ed.) 458-463, et seq.; Cooley, Torts, 379; Ferguson v. Earl of Kinnoull, 9 Clark & F. 250; Raynsford v. Phelps, 43 Mich. 342, 5 N.W. 403; Teall v. Felton, 1 N.Y. 537; same case, in error, 12 How. 284-291; Hathaway v. Hinton, 46 N.C. 243. The Michigan act of 1883, heretofore set out, made it the duty of the city council to take a bond, with sureties, conditioned for the protection of those who should furnish labor or materials in the performance of the public works contracted for by the city. The total neglect of this duty, under the well-settled rulings of the supreme court of Michigan, is the neglect of an administrative act for which an action will lie by any individual of the class for whose benefit the bond is required, for any injury sustained by him. Owen v. Hill, 67 Mich. 43, 34 N.W. 649; Plummer v. Kennedy, 72 Mich. 295, 40 N.W. 433; Wells v. Board, 78 Mich. 260, 44 N.W. 267. But if the act to be done be not one merely ministerial, but one which partakes of the judicial function as involving the exercise of judgment and discretion, the officer will not be liable, unless actuated by malice, even if he falls into error from which an individual may suffer. Kendall v. Stokes, 3 How. 86, 98; Ferguson v. Earl of Kinnoull, 9 Clark & F. 250; Cooley, Torts, 379; Add. Torts (1st Eng. Ed.) 457 et seq.; Raynsford v. Phelps, 43 Mich. 342, 5 N.W. 403; Van Deuson v. Newcomer, 40 Mich. 90; Hoggatt v. Bigley, 6 Humph. 236.

The fault of which plaintiffs in error were guilty was not in neglecting the duty imposed by this statute by failing altogether to require a bond for the protection of those furnishing the contractor with material, but in taking a bond in which the obligee is the city of Menominee, instead of the people of Michigan, as prescribed by the statute, and by including in the same bond a condition for the fulfillment of the contract with the city by the contractor. The question as to whether an error in respect to the terms of the bond in the matters mentioned is a mistake in respect to a mere ministerial duty, for which these officials would be liable although individuals may suffer from the mistake, is one not free from doubt. It would seem that a distinction might well be drawn between such cases as Owen v. Hill, Plummer v. Kennedy, and Wells v. Board, cited above, and that presented by the facts shown by this transcript. But has the defendant in error sustained an actionable injury by the mistake in making the city of Menominee the obligee in the bond, or by including a condition for the protection of the city against a breach of the contract between the city and Larson? That the statute contemplated a bond payable to the people of the state of Michigan, and conditioned only for the payment of labor and supply claims contracted by the contractor or subcontractors, is very obvious. But the inclusion in a statutory bond of conditions not authorized by the statute, if the good and bad conditions be severable, will not invalidate the bond. U.S. v. Bradley, 10 Pet. 343. The condition for the protection of the city, though not expressly authorized by any statute or provision of the charter, is not ultra vires, and constitutes a valid common-law obligation, though voluntary. U.S. v. Tingey, 5 Pet. 115; U.S. v. Bradley, 10 Pet. 343; Supervisors v. Coffenbury, 1 Mich. 355; Knapp v. Swaney, 56 Mich. 345, 23 N.W. 162; Board v. Grant (Mich.) 64 N.W. 1050. The fact that the bond taken was made payable to a promisee other than the people of the state of Michigan, as required by the statute, invalidates it as a statutory bond. Supervisors v. Coffenbury, 1 Mich. 355; Town of La Grange v. Chapman, 11 Mich. 499; U.S. v. Linn, 15 Pet. 290. But a bond which is vitiated as a statutory bond, because running to a promisee whom the statute does not authorize to become the obligee, may be good as a common-law bond, if the conditions of the bond are such as are authorized by law, and the obligee named be not incompetent to become a party to such an obligation. U.S. v. Tingey, 5 Pet. 115; U.S. v. Bradley, 10 Pet. 343; ...

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