Case Name: County of Price, Respondent, vs. Northwestern Casualty & Surety Company, imp., Appellant
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1924-06-03
Citations: 184 Wis. 279
Docket Number: 
Parties: County of Price, Respondent, vs. Northwestern Casualty & Surety Company, imp., Appellant.
Judges: 
Reporter: Wisconsin Reports
Volume: 184
Pages: 279–281

Head Matter:
County of Price, Respondent, vs. Northwestern Casualty & Surety Company, imp., Appellant.
May 10
June 3, 1924.
Schools: Contract to erect normal school: Bond with penalty less than prescribed by law: Validity as to surety.
The fact that the penalty contained in a bond executed to a county for the performance of a contract to build a schoolhouse was less than the penalty required by sec. 3327o, Stats., does not relieve the obligor from liability incurred and for which he was paid. p. 280.
Appeal from an order of the circuit court for Price county: G. N. Risjord, Circuit Judge.
Affirmed.
Action on a bond for the performance of a contract to build a normal school building for the agreed price of $75,719.44. The complaint alleges, inter alia, that by mistake the penalty was recited in the sum of $38,000 instead of in the contract price or more as required by sec. 3327a, Stats., a part of which reads, “no such contract shall hereafter be made or let unless the contractor shall give a good and sufficient bond, the penalty of which shall not be less than the contract price, conditioned,” etc. The complaint asked for judgment in the sum of $38,000. The defendant, the Northwestern Casualty & Surety Company, entered a general demurrer which was overruled, and it appealed.
For the appellant there was a brief by McMahon, McMahon & Hayes, attorneys, and Van Dyke, Shaw, Muskat <& Van Dyke, of counsel, all of Milwaukee, and oral argument by Cart Muskat.
For the respondent there was a brief by C. E. Lovett, district attorney of Price county, and W. K. Parkinson of Phillips, of counsel, and oral argument by Mr. Parkinson.

Opinion:
Vinje, C. J.
The claim of the appellant is that since the penalty of the bond is less than the statutory requirement it is void, and a number of cases are called to our attention where the court has held invalid contracts not conforming to statutory requirements. Such cases are usually those where taxpayers are seeking to enjoin the unlawful or irregular expenditure of public moneys, or where the municipality is seeking to defend payment of public moneys under unlawful or irregular contracts, and they do not apply to the present situation.
The statute here in question was designed to protect the public, not to defraud it, by requiring a bond in an adequate penalty. If the penalty provided in a bond is less than the statutory one, the obligor on the bond cannot invoke the aid of the statute to shield him from the liability he has incurred and for which he has been paid. A departure from such statutory provisions in a bond does not contravene a general public policy which requires it to be declared void in every instance, as was the case in Kilbourn City v. Southern Wis. P. Co. 149 Wis. 168, 135 N. W. 499.
The principle of law applying to this case is so aptly stated in the cases of Madison v. American S. E. Co. 118 Wis. 480, 511, 95 N. W. 1097, and Beloit v. Heineman, 128 Wis. 398, 401, 107 N. W. 334, that no further elaboration of it is deemed necessary. In the first case it was said:
"Taxpayers whose money is about to be spent, or property owners whose land is about to be charged, may challenge the legality of municipal acts and contracts calling for such expenditures on the ground that the proper legal steps have not been taken; but persons who enter into a contract with the city stand in a different position. Such a person cannot even make the defense of ultra vires or total lack of power on the part of the corporation to make the contract. Security Nat. Bank v. St. Croix P. Co. 117 Wis. 211, 94 N. W. 74. If the defense of ultra vires cannot be made, it is very evident that the lesser claim of failure to execute a given power in the statutory way must also be ineffective."
In the latter case the city rented a stone crusher to defend ant and he objected to the payment of rent on the ground that the city had no power to rent it. The court said:
"Whatever limitations may have existed on the power of the town or on the town board or its officers to confer upon an individual the right to use such machine, they are entirely immaterial to the defendant, who has actually enjoyed that privilege under an attempted contract. No limitation rested upon his ability or power to agree to pay for such use, and he, having received all the benefits of such a contract as if it were valid, cannot now question its validity in order to repudiate his agreement to pay a price for that which he has received. Farmers' & M. Bank v. Detroit & M. R. Co. 17 Wis. 372; Bullen v. Milwaukee T. Co. 109 Wis. 41, 44, 85 N. W. 115; Security Nat. Bank v. St. Croix P. Co. 117 Wis. 211, 94 N. W. 74; Madison v. American S. E. Co. 118 Wis. 480, 95 N. W. 1097."
By the Court. — Order affirmed.