Chaffee v. Granger

Campbell J.: This case comes up on appeal from the decree of the Circuit Court for the County of Wayne, enjoining the collection of a judgment which the defendant Granger recovered against the City of Detroit. His co - defendant, Cicott, was made a party, as sheriff, holding the execution which had Issued upon the judgment. The bill was filed by Amos Chaffee, as a tax payer of the city of Detroit, on behalf of himself and the other tax payers, claiming that the judgment was rendered against the City by collusion and fraud, upon an illegal claim, in violation of the city charter. The case shows the following facts: Granger, in 1855, took contracts to build certain sewers. Although all but one of his contracts were parol, they were made according to certain others which were in writing, and their terms thus made certain. When his work was completed, the city authorities declined paying certain items, on the ground that he was precluded by the terms of his contracts from making any charges for them. Those items con — 56 — sisted of a charge of $212.54 for excavations for pools and. pipes connected with the main sewers, to discharge surface water, and $94.12 for extra excavation rendered necessary by a change in the form of the sewers in certain places where quicksands made the change desirable. Upon an application to the Common Council, a resolution was passed, authorizing the controller to pay the first charge,'if Granger could satisfy him that when the contracts were’taken he expected to get pay for such work. The controller refused to allow the claim, and Granger brought suit for the whole amount of his charges. The City pleaded to his declaration; and Granger having noticed the cause for trial, the Common Council authorized the city attorney, on his advice, to withdraw the plea, and allow judgment to be rendered for $306.66, the amount of the principal claimed, without interest. Granger accordingly obtained a judgment for that amount, and was proceeding to enforce the same by levy and sale of land, when enjoined in this suit. There is nothing in the case in any way justifying the charge of fraud, and if complainant was entitled to any relief, it must depend upon the illegality of the acts in proof. We proceed, therefore, to examine the case upon this subject. That the authority to confess judgment was, for the purposes of this suit, substantially equivalent to the allowance of a claim, is not unfairly assumed by the complainant, and the validity of such allowance is attacked, first, because the resolution was not approved by the mayor; secondly, because the balances left out of the sewer funds, specially voted for those sewers, had been transferred to the sinking fund, and therefore no moneys remained applicable to any such claim; and, thirdly, because the claim was illegal, and, therefore, the Council could not allow it under any circumstances, because absolutely forbidden by the city charter. It is unnecessary to consider the arguments upon the peculiar form - of any of these transactions; for a court of equity can generally reach the substantial intent of any acts in question before it. In this case no — 57 — Special difficulties of this kind arise, for the merits are very fully in evidence. Whether the resolution required the approval of the mayor depends upon whether the claim was a debt or liability lawfully contracted before the adoption of the new charter. That it was a previous debt — if a debt at all — there is no doubt. It had been before the city authorities for more than a year. The ■suit at law was commenced in 1856, and the amended charter was passed in 1851. The approval of the mayor is, therefore, of no consequence here, because the legality of the claim would dispense with it, while its illegality would probably render such approval nugatory. Neither is it material that the sewer balances had been transferred to the sinking fund. That transfer was made while Mr. Granger’s claim was pending. The balances were ample to meet his claim. If his claim was lawful, those funds were ■liable to pay it, and could in no sense be considered as savings. Nothing can properly go into the sinking fund from any sum provided by law for specific public works, except a surplus over and above their cost. The contractors are by law compelled to look to the fuM voted for specific improvements, and no transfer into the sinking fund can be permitted to deprive them of the right to receive their laAvful pay out of the moneys raised for the works. When the contractors are fully paid, any balance may be called a surplus, and legitimately belongs to the sinking fund. Was, then, the demand of Mr. Granger such that it could be lawfully allowed by the Common Council? Both items are set up as legitimate charges under the contracts, one being for excavations required to be made under the original agreement, and the other being for extra work required to carry out changes made by authority, and contemplated by the ■original agreement as payable for upon the same basis as the specified work. The prices for both sets of work are strictly in accordance with the prices paid for similar excavations under the express terms of the .contracts. The only inquiry therefore — 58 — is, whether the Council could legally, in view of the terms of the agreements, make the arrangement complained of. Complainant claims that by the contracts, each set of pools and pipes was to be completed for a fixed sum, and that this covered the excavations as well as the iron and mason work. The terms of the written contract referred to are as follows: The contractor agrees to build a “public sewer ” according to the plans and specifications, and that he will go on and steadily prosecute the “ excavating and building of said sewerf &c. The contract goes on to provide for the quality of material, for the right of supervision and alteration, &e., and so far as it embraces any covenants on the part of the contractor, no reference is had to any particular parts of the work. The term “ sewer ” embraces every part of it. It is only when we reach the terms of payment, that any thing is found relating to the details of the work. The clause in controversy reads as follows: “ The parties of the first part hereby agree to pay, and the party of the second part to accept, in full payment for said work, labor, and materials, as follows, viz.: For excavating, digging, and filling back, the earth in said sewer, the sum of forty-two (42) cents per cubic yard; for furnishing materials and iron castings, and inserting cast iron openings, and building said sewer, the sum of eleven dollars per rod. For furnishing materials and iron castings, and constructing pools, the sum of forty dollars per set. For furnishing materials and iron castings, and constructing manholes, the sum of ten dollars per manhole.” This is quoted from the contract appended to the bill, made with Mr. Granger. The others, made with other parties, and upon the basis of which he made his parol contracts, are substantially like this. Taking this contract as it reads, and apart from any circumstances which might show a practical construction of any of the phrases between the parties, we do not think the language of the instrument in any way violated by extending the right to charge for excavation to any part of the work. The terms used — 59 — in reference to the materials and construction of pools, are identical in meaning with those applied to the mere iron and mason work of the mam body of the sewer, and if the one does not include excavation, we see no reason why the other should. The amount, of excavation would vary in different pools and connecting pipes, with the depth of the main sewer, just as that in different parts of the main trunk would. If either party needs to resort to proof of surrounding circumstances, it would devolve upon the City to do so, in order to change what we deem to be the natural construction of the contract. The facts in this case show that when Granger took the contracts in question, the usage had been in conformity with this construction, and therefore he would be equitably entitled to pay on this basis under any circumstances. The other item in dispute is for extra work in changing the form of the sewers to put in plank bottoms. The evidence shows that the actual extra expense to Granger, in addition to the plank which was furnished by the City, is the amount he claims in his bill of items. But it is claimed that he agreed if the City would furnish the plank, that he would make no further extra charge. The committee on sewers authorized the change, which was deemed necessary by all parties. The testimony of Sheley is that he said to Granger that “ all the extra we are to furnish is the plank,” and Mr. Granger consented to it. This seems to have been about all that was said about it. There was undoubtedly room for misapprehension on both sides on this matter, but inasmuch as the expense of the change covered much more than the plank, and as the contract expressly provided that where authorized changes were made, additional compensation should be made for any additional work, upon the same terms provided for in the contract for similar work, we think Mr. Granger might very naturally suppose that the extra referred to applied merely to the body of the sewer in its changed form and dimensions. It could not be assumed, without clear proof, that he agreed to make changes at his own expense. — 60 — In the view we have taken of the facts, we think the claim of Mr. Granger was properly allowed by the Council. We are also of opinion that if the matter had been one of doubtful construction, and acted upon in good faith, as this seems'to have been, by the Council, there would have been, upon the facts presented, no just ground for the interference of a court of equity. If courts of equity are called upon to interfere with the action of such municipal bodies, on behalf of the tax payers, the circumstances should be such as to show that the proposed action will be inequitable and injurious to the public interests. No serious doubt could have existed concerning the legality of the larger part of Mr. Granger's claim; and the cost of litigation, if he had been compelled to try his suit at law, would inevitably have exceeded the balance. Under such circumstances, the action of the Council was in no sense injurious to the tax payers, and them burdens could not have been increased by it. The jurisdiction of Chancery to interfere by injunction to restrain a city corporation, on a bill filed by a private citizen on behalf of himself and others, was questioned on the argument, and the point fairly raised. We are not, however, prepared to express an opinion upon that subject; as this case is, in our judgment, entirely unsupported on the merits,-we shall dispose of it upon the facts, and reserve the consideration of the jurisdictional question for future disposal. The decree of the coimt below must be reversed, and the bill dismissed, with costs. The other Justices concurred.