Northwest Steel Co. v. School Dist. No. 16

148 P. 1134, 76 Or. 321, 1915 Ore. LEXIS 281
CourtOregon Supreme Court
DecidedMay 25, 1915
StatusPublished
Cited by9 cases

This text of 148 P. 1134 (Northwest Steel Co. v. School Dist. No. 16) is published on Counsel Stack Legal Research, covering Oregon Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Northwest Steel Co. v. School Dist. No. 16, 148 P. 1134, 76 Or. 321, 1915 Ore. LEXIS 281 (Or. 1915).

Opinion

Mr. Justice Benson

delivered the opinion of the court.

There is but one question to be determined, and that is: Has the materialman, under the facts stated, a right of action against the school district for damages by reason of the negligence of the defendant in failing to exact a bond such as is required by Section 6266, L. O. L.? Defendant contends, and the trial court-held, that the requirements of the statute create a public, and not a corporate or municipal, liability and therefore the defendant is not liable in damages for failure to comply therewith. There appear to be but few cases in which the question as applied to statutes similar to ours has been considered, and our attention has been called to the decisions of only three states, which are Michigan, Minnesota, and Kansas. Of these, the Michigan cases support the contention of plaintiff, while those of Minnesota and Kansas maintain an interpretation favorable to the defense.

We shall first consider the Michigan statute (Public Acts 1883, No. 94) and decisions. The title of the act reads:

“An act to insure payment of wages earned, and for materials used in constructing, repairing, or ornamenting public buildings and public works.”

Section 1 is as follows:

“That when public buildings, or other public works, 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, upon which buildings or works liens might attach for labor or materials if belonging to private persons, it shall be the duty of the board, 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[324]*324contractors for all labor performed or materials furnished in the erection, repairing, or ornamenting of such building. ’ ’

Then follow various provisions for making the act effective. The first reported case under this statute is that of Owen v. Hill, 67 Mich. 43 (34 N. W. 649), in which the trustees of a school district were made defendants in an action, similar to the one at bar, to recover damages sustained by the negligence of the defendants to exact the statutory bond. The court held that the act of requiring the bond is a ministerial act, involving no discretion, and consequently no judicial functions. The acts of fixing the amount in which the bond shall be given and of passing upon the sufficiency of the sureties are conceded to be, in a limited' measure, judicial, but these acts were not the ones of which complaint was made. The opinion then discusses the question as to whether the requirements of the act constitute a public duty or a corporate one. Upon this point the court says:

“In this case the position was assumed by counsel for defendants that the duty imposed by the statute was a public duty, and the neglect to perform it only affected the public. If this were so, there would be no liability. But the contrary is, to my mind, the object and purpose of the law. The duty was imposed to protect individuals, and for the benefit of individual laborers and materialmen. That this is so is too plain for argument. No person can read the condition of the bond and not be satisfied that it was intended for the protection of the individuals who should furnish to the. contractor or subcontractor either labor or material. Express provision of the law is that the bond shall be deposited for the use of any person interested therein, and that it may be prosecuted and recovery had by any person, etc., to whom any money shall be due and payable 6n account of having performed labor, [325]*325etc. The principle is this: ‘ That if the duty which the official authority imposes upon an officer is a duty to the public, a failure to perform it, or an inadequate or erroneous performance, must be a public, not an individual, injury, and must be redressed; if at all, in some form of public prosecution. On the other hand, if the duty is a duty to the individual, then a neglect to perform it or to perform it properly, is an individual wrong, and may support an individual action for damages ’: Cooley, Torts, 379. I am aware that it may be regarded as a great hardship to impose this liability upon persons who accept office and perform burdens gratuitously. But the law makes no exceptions, and I can make none. It is presumed that they know the law, and the further presumption is that they will obey it. If they do not, on whom should the loss properly fall; on those who neglect to perform a duty enjoined by law, or those whom the law was designed to protect from loss'?”

The leading Minnesota case is that of Ihk v. Duluth City, 58 Minn. 182 (59 N. W. 960). This was an action for damages incurred through the city’s neglect to exact a bond, under the provisions of the municipal charter which are stated, in the opinion, to be as follows :

“That, whenever the board of public works shall award a contract for making any of the improvements mentioned in the subchapter, the person to whom it is awarded shall furnish to the city a bond with sufficient sureties, to be approved by the board of public works, conditioned that he mil execute the work for the price mentioned in the bid and according to the plans and specifications, and that he will pay for all labor done and material furnished for said improve? ment.”

The court holds that the city is not liable, for the reason that the duty to exact the bond is a public, and not a corporate, duty, and cites Billon on Municipal [326]*326Corporations, Section 967, as the controlling test. In order to make clear the application, we quote the following from the opinion .-

“The distinction between these two classes of duties, i. e., municipal or corporate duties, and public duties, and that for misfeasance or nonfeasance, that in the one case the municipality will be liable, and not in the other, is well established: 2 Dillon, Mun. Corp., §§ 966, 967. The difficulty usually lies in determining what are to" be deemed municipal or corporate duties and what public duties. "The test suggested by Dillon in Section 967, that to be a municipal duty it must relate to the local or special interests of the municipality, is the most reasonable and satisfactory test, and was applied by this court in Bryant v. City of St. Paul, 33 Minn. 289 (23 N. W. 220, 53 Am. St. Rep. 31). Tried by that test, the duty to take a bond for security of laborers and materialmen was a public, and not a corporate, duty; in other words, it was imposed on the particular officers, and not on the corporation as such. It did not relate to the local or special interests of the municipality nor of its citizens. It was a matter of indifference to the city that those claims were or were not secured. Such a bond, when taken, operates as security not merely for those who reside in the city, but equally for those who reside elsewhere — in Wisconsin, for instance.”

The leading Kansas case is that of Freeman v. City of Chanute, 63 Kan. 573 (66 Pac. 647). This was a similar action based upon a statute (Gen. Stats. Kan. 1901, § 5130; 1 Code Civ. Proc., § 638e) which reads, in part, as follows:

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148 P. 1134, 76 Or. 321, 1915 Ore. LEXIS 281, Counsel Stack Legal Research, https://law.counselstack.com/opinion/northwest-steel-co-v-school-dist-no-16-or-1915.