People ex rel. Houghten v. Newberry

Carpenter, J.

{after stating the facts). I think it clear that this bond was not required by the statute. The contract with the Michigan Stone & Supply Co. to furnish limestone dust at the municipal asphalt plant did not make that company a contractor for the building, repairing or ornamenting of “public buildings, other public works or improvements.” If it did, one who furnished a single load of sand or who performed any service about the municipal plant would be equally a contractor. The consequence of holding persons furnishing such material or labor to be contractors would be quite disastrous. It would impose upon municipal authorities the duty of requiring bonds in all such cases, thus unnecessarily hampering the conduct of public business and placing upon public officials unlooked for and burdensome obligations. I think, however, that the facts averred in the declaration make a case on common-law principles. Appellants voluntarily executed the bond. They therein stated that the contract of their principal was within the provisions of the statute under consideration. It is made evident by this recital and by the language of the bond that they intended to take upon themselves the obligation which that statute imposed upon sureties. In other words, it was their intention to thereby become sureties for the payment of material furnished their principal to enable it to perform its contract. By giving this bond as a statutory bond it is to be presumed that appellants intended it “should be deposited with and held” by the officers exacting it “for the use of any party interested therein.” That is, that it was to be held for the use of Henry Houghten and others like him and placed where they could examine it. This was equivalent to a proposal to Houghten to guarantee payment of his account. By furnishing the material Houghten accepted that proposal and the proposal thereupon became obligatory. The proposal and its acceptance constituted a binding contract. People v. Taylor, 2 Mich. 253. It is true that the law did not require this proposal to be made. But that circumstance is unimportant. Appellants made it. The case would be very different if the bond had stated that liability was conditioned upon the applicability of the statute to the contract therein described. But it does not so state. It says that the “ contract is within the provisions of” the statute. Is it to be inferred from this language that the bond is void if the statute is not applicable ? Clearly not. The parties who have signed the bond, appellants and their principal, unequivocally state that the statute is applicable. This unequivocal statement is a part of their contract with the plaintiff Houghten. Houghten was under no obligation to determine for himself the doubtful question of the applicability of the statute. From that obligation he is relieved by the express terms of the contract. Legally speaking, the contract is the same as if it had stated:

“ Even if the -statute, sections 10743 to 10745, 3 Comp. Laws, inclusive — does not require the giving of this bond, we, the parties hereto, take upon ourselves the same obligation as if it were required.”

Any doubt respecting the binding force of such an obligation in ,a contract must rest upon the ground that common-law principles forbid its being entered into. Certainly that ground is untenable, for, according to those principles, appellants could have guaranteed the account of Houghten, and that, under the principles of this opinion, is precisely what they did. This same result would be reached by saying that appellants are estopped from denying that the statute applies to their case. I shrink from making such a statement. It would involve a consideration of the difficult question (see Bigelow on Estoppel [4th Ed.], p. 554), Can one be estopped by a statement of a proposition of law ? And if that question is answered in the negative, it raises another, viz.: Is that answer applicable to this case ? The ground upon which this opinion proceeds makes it unnecessary to consider those questions. It holds that appellants’ obligation to plaintiff rests not upon estoppel but upon contract. Appellants are responsible, not because they are estopped from denying the applicability of the statute, but because they have entered into a valid contract to perform the same obligation which they would owe were the statute applicable.

Appellants also contend that the bond “ cannot be made effective as a common-law bond ” as in that case ‘ ‘ a suit in the name of the people would not lie.” While this suit is brought in the name of “ The People of the State of Michigan,” the real plaintiff is Henry Houghten, for whose use and benefit the suit is brought. The contention under consideration is, then, merely technical. It should have been raised by demurrer. It was not, and therefore should not now be considered.

If these views are correct, the order of the trial court overruling defendants’ demurrer should be affirmed.

Montgomery and Moore, JJ., concurred with Carpenter, J.