Court Opinion

ID: 4915776
Source: CourtListenerOpinion
Date Created: 2021-09-22 00:09:06.594353+00
Date Added: 2024-06-11T08:13:51.675054
License: Public Domain

Per Curiam

(after stating the facts.)

This.cause has been referred by the court to its co-mmissioners, who report that the judgment ought to be affirmed, and the court having duly considered the case upon the record, briefs- and argument, is of that opinion.
By section 2 -of Article XIII, constitution of 1885, which deals with the subject iof public institutions it is provided that “A State Prison shall be established and maintained in such manner as may be prescribed by law.” Section 26, Article IV provides, among other things, that the Commissioner of Agriculture shall “have supervision of the State Prison.” Section 17 provides that “the Governor and the administrative offices of the Executive Department shall constitute a Board of Commissioners! of-State Institutions, which board shall have supervision of all matters connected with such institutions in -such manner as shall be prescribed by law.” The legislature of 1889 passed an act entitled “An Act to Establish and! Maintain a State Prison and Provide for the Employment of Persons Convicted of Crime and Sentenced to the State Prison and for the Custody, Mainainance and Discipline of such Convicts, and -for Other Purposes.” Chapter 3883 acts of 1889. Most iof the provisions of this act were incorporated into the Revised Statutes- of 1892, beginning with section 3065 of that revision. It is unnecessary to *522refer to- those provisions 10-f the revision providing for the establishment, maintainance and discipline -of a State Prison,, but only to a few of those relating to contracts for the labor >of State prisoners. By .sections 3065 it is provided that the Commissioner of Agriculture, with the approval of the Board of Commissioners of State Institutuions, may enter into, contracts with any person or persons for the labor, maintainance and custody of any or all prisoners sentenced to, or confined within, the State Prison, in such manner as the said board may deem most advantageous to the interests of the State and with due regard for the health, humane treatment and safe custody of the prisoners; that such contracts mlay be made for a term- of years, not exceeding four; that such contracts may provide for surrendering the control and custody of the prisoners toi the person or persons contracting for their labor, subject to such supervision of the Commissioner of Agriculture as is provided by that article of the revision, and for the payment to- the State by such person or persons of such sumís of .money for the labor of such prisoner® on -such contracts as may be deemed advantageous to the interests of the State, which said -sums of money shall be paid to the State Treasurer in accordance with the terns of the contract or contracts. It also provides that, in case the Commissioner- of Agriculture does not receive any applications- ho- pay the State for the labor of such prisoners, then he shall enter into, such contracts with the approval of the board for the payment by the State to any person or- person® of such sums -of money for taking such prisoners on such contracts as may be deemed; advantageous to the interests of the State. Section 3066 provides that “such contractor or contractors shall give *523bond with two or more sureties in a sum not exceeding ■twenty thousand dollars^, payable to the State, to be prescribed by the Board of Commissioners of State. Institutions and conditioned for the faithful performance of such contract and the duties imposed by this Chapter, and such "ontract and bond shall be approved by the' Board oí Commissioners of State Institutions before either shall be of any effect, and they shall be filed in the office of the' State Treasurer.”
An essential question involved here. is whether upon the allegations of the bill, the appellants have a valid contract as claimed. The provisions of. section 3006 Revised Statutes above quoted require that a bond be given and declare that “such contract and bond shall be approved by the Board of Commissioners of State Institutions before either, shall be of any effect.” This language is plain and unambiguous. It requires the contract and bond to be approved, and declares in unmistakable terms that their effectiveness shall be conditioned on approval. It must be borne in mind that section 3065 had already provided that any contract should be approved by the board, and, if the contract were to become operative ,as such, upon its approval section 3066 need only have referred to the approval of the bond, but that section expressly provides for the approval of the contract and bond “before either shall be of any effect.” Under the terms used the failure to secure such approval leaves both the contract and bond without any effect. The. effect of this statute is to make an approved hand a necessary concomitant of a consumimatedly effective contract. The evident purpose of thiisi provision was to guard against the possibility of the State being bound *524by an enforceable contract without security for its faithful performance by the lessee satisfactory to the board, which is by the law invested with the power of supervision over the convicts, even when such convicts are in possession of the contractor. In order to secure this very important object the statute makes the approval of the bond! a conditional precedent to the validity of the contract. The approval of the bond being made a condition precedent and in the present case operating also as a limitation upon the power of the officers to contract, the parties must be presumed to have had in mind this condition and limitation in negotiating the contract. Each, it is reasonable to suppose, negotiated with the other upon the assumption that the bond must be given and1 approved before the State’s liability upon the contract would arise, and even if they did not so negotiate, the State could not be bound without the giving and approval of the bond, because the statute plainly so declares. It is claimed by appellants that the law does not require written evidence of the board’s approval, or that the approval of the contract and bond be shown by the records of the board, or a formal declaration by the board' that the contract and bond are approved, but that any act or conduct on the part of the board which show® that it accepts, or is satisfied with the contract and with the bond given to secure it, will be deemed in law an approval. For the purpose of this case we may admit that such is the law, and that under such view of the law the action of the board in mlaking the proposition to appellants, in drafting the contract and directing the Commissioner to execute it eg, drafted, constituted an approval of the contract. as distinct from! the bond, its concomitant, which the *525meaning of the statute. The allegations with reference to the bond show that the board through the Governor ¿drafted and prepared a bond to be executed by appellants and two sureties and delivered same to appellants to be executed by themselves and two sureties, but it is not alleged that the names of the sureties were agreed upon or discussed, nor that the board agreed to accept W. S. West and O. B. Rogers,'the parties named in the bond subsequently delivered to the 'Commissioner, of Agriculture, as such sureties or knew that these gentlemen would! be tendered. The parties evidently did not consider that the board had approved the bond at the time it was drafted, for one provision of the contract bound the appellants thereafter to give a bond to he approved hy the hoard. Under- these circumstances how can it be said that the board approved a bond not then executed, the •sureties upon which were not then determined? Even if the board could lawfully have bound itself in advance to approve a bond to be thereafter executed by good and sufficient sureties (the approval of the bond being a matter resting in discretion, Cope & Stewardson v. Hastings, 183 Pa. St. 300, 38 Atl. Rep. 717), it does not appear from the allegation of the bill that it attempted to do. so, and therefore it does not appear that he bond was approved Auhorities have been cited to the effect that where parties have given bonds required by some law or by contract in order to authorize isiome action, and a party has proceeded to do the act and the bond is found in the possession of the party or tribunal whose duty it was to approve it, with no evildtence of its disapproval, or where the terms of the bond and the names of the sureties are previously agreed upon, and such a bond is afterwards found in the posses*526sion of the party whose duty it was to approve it, and the party for whose benefit the bond was given has permitted the performance of acts which the bond was given to secure, the bond will be deemed by the law to have been approved. The facts in this case do not, however, bring it within the rule announced in those cases, for no act in performance of the contract has been done: by appellants, except the deposit with the Commissioner of Agriculture of the $3,000 and the bond, neither of which have ever been accepted or approved by the board, the bo'ard proceeded within about two weeks to disapprove the contract, which the bond was given to secure, and ever since has declined to recognize it, thereby announcing unequivioally its purpose to refuse its approval of any bond in consummation of such contract. Besides, it does not distinctly appear that the bond delivered to the Commissioner was ever presented In the board', or that the latter knew that it had been executed and delivered to the Commissioner; certainly not prior to the day it adopted the resolution disapproving the contract. Under these circumstances it can not be'said that the bond was ever approved by the board. It is insisted in argument that the provision of the statute relating to the giving and approval of the board is directory nearly; that a good and sufficient bond having been tendered, it was the duty of the board to approve it; that its refusal to do so was a capricious and arbitrary act, and under such circumstances the court ought to treat the bond as sufficient under the law, and either regard the bond a® approved or its. formal approval as being immaterial.
A statute which require® a thing to be done, and declares in plain and unmistakable terms the legal conse*527quénces to flow from a failure to do- it, must generally be regarded as mandatory, and especially where, as in this case, the requirement is made a condition precedent to any effectiveness of a contract authorized to be made on behalf of the State. People ex rel v. Dulaney, 96 Ill. 503; Agent of State Prison v. Lathrop, 1 Mich. 438; State ex rel. v. Hogan, 22 Mont. 384, 56 Pac. Rep. 818; Penitentiary Company No. 2 v. Rountree, 113 Ga. 799; Bladen v. Philadelphia, 60 Pa. St. 464; Pearse v. Morrice, 2 Ad. & El. 84; Sutherland on Stat. Cons, sections 446, 447; Endlich on Int. Stat. section 431. The statute prescribes the terms upon which the State is to be bound by a contract authorized to be made in its behalf. It declares that a failure to comply with those term's will result in no contract. Unless those term's are complied with, there can be no contract with the State for the obvious reason that neither the iState nor an individual can be bound by the term® of a contract to which it or he has not consented. If the clause of the statute under consideration be directory as to the approval of the bond, it is directory also.as to the contract, for they are each embraced in the language which declares that “such contract and bond shall be approved by the board * * * Defore either shall be of any effect.” No one, we suppose, would for a moment contend that the provision requiring the contract to be approved is merely directory, and yet this must be so if the provision for approval of the bond be so held. The provisions of the statute requiring the bond to be approved is mandatory, and such approval is a condition precedent to the effectiveness of the contract. Until and unless the bond is approved the contract, though formally approved, is a mere offer upon the part of the State, sub*528ject to be revoked by the Commissioner or rejected Dy the board at any time or for any cause. It stands precisely upon the same basis as any other proposal, a term ■of which provides that there shall be no binding obligation until mutual assent is thereafter evidenced at some particular time, or in some particular manner, or upon the happening of some contingency. Even though accepted by the other party, no binding contract is created, .and until the condition isi performed or the contingency removed either party can recede from the proposed contract. In such cases though the condition is to be performed by one of the parties, he may decline to perform it even arbitrarily and without reason, and thereby prevent the offer from becoming a binding contract. This results from the principle that a party must assent to the precise terms of a proposed] contract, unconditionally, in order.to bind himi by such contract. The principle is well illustrated by the many cases which hold that even though the precise terms of a contract are agreed upon, yet if it is understood by the parties that the contract is not to become binding unless reduced to writing and signed by the parties, neither party is bound by such ■contract until it is reduced to writing and signed; and in such cases if the contract be in fact reduced to writing and signed by one party, the other is not bound unless he signs, even though his refusal to sign be arbitrary and without reason. Chinnock v. The Marchioness of Ely, 4 DeG. J. & S. 637; Morrill v. Tehama Cosolidated M. & M. Co., 10 Nev. 125; Dietz v. Farish, 53 How. Pr. Rep. 217; Pollock on Contracts, p. 41; 1 Parson on Contracts, p *477 note; 1 Addison on Contracts, *15. And this rule .•applies especially to public officers contracting on be*529half of the public. If the statute or authority to act requires the contract to be written, or it is so agreed, as a condition precedent to its effectiveness, the condition, must be performed to make the contract binding, and. until this is done the negotiations may be discontinued, at any time by the officer. Capital Printing Co. v. Hoey, 124 N. C. 767; 33 S. E. Rep. 160; State ex rel. v. Hogan 22 Mont. 384, 56 Pac. Rep. 818; Edge Moor Bridge Works v. County of Bristol, 170 Mass. 528, 49 N. E. Rep. 918; Water Commissioners of Jersey City v. Brown, 32 N. J. L. 504; Eads v. City of Carondelet, 42 Mo. 113; 29 L. R. A. note, p. 434. The bill alleges and the demurrer admits that the bond tendered by appellants was sufficient,, and properly executed. But this does not dispose with the requirements that it be approved by the board as a prerequisite to the effectiveness of the contract. The law placed no limitations upon the power of the board to reject it and) thereby prevent the contract from becoming effective. Nor can the court treat the bond as aj>piroved because it is found to be a proper one to be approved by the board—nor treat its approval as immaterial. The approval is a matter in the discretion of the board made so by statute, and as we have shown constitutes a condition precedent, material to the making of the contract. If the board has arbitrarily exercised its discretion in a matter as to which it owed no legal duty to the appellants, the members must answer to the people who elected them and not the courts, for the latter are given no supervisory power over the. board' in such matter invested in its discretion. The statute nowhere makes it a duty on the part of the board to approve the *530bond if a valid and legal one is tendered. If there was a duty imposed to approve the bond, the courts might compel approval in proper case®, but where no duty is imposed, the courts can neither compel such approval, nor dispense with it, when made a condition precedent to the validity of some act. State ex rel. v. Smith, 23 Mont. 44, 57, Pac. Rep. 449. The Commissioner and the board are by the provisions of the statute invested with a very ^road discrection in the matter of making contracts for the labor of State prisoners, and must have ;n view the State’s interest, and the health, humane treatment and safe custody of the prisoners in making or approving such contracts. They are not by the statute required to advertise for bids, or to. let a contract to the highest or lowest bidder, or to any particlar class of persons or for any particular class of work. While the statute does not expressly require the contract to be in writing, its provisions can only be complied with by a contract, in writing, because the contract and! the contractor’s bond are required to be filed in the office of the State Treasurer. The Commissioner has no power to enter into a contract that shall be binding upon the State without the approval of the board; neither does the statute make it the duty of the board to approve a contract made by the Commissioner even though the Commissioner believes, and a court should find as a fact, that such contract, is advantageous to the State and secure to the prisoners every right which it was the purpose of the law to secure to them. The power of the board in the matter of approval of such contracts is an absolute one committed to its d!scretion, and it can be heldl answerable for an abuse of such discretion only by the people from whom its authority is *531derived, for no supervisory power over its action is anywhere given to the courts. The Commissioner and the board in making these contracts act as agents of the public, and their authority is derived from a public statute, of which every person must take notice. Under such circumstances the officers or the board must possess a real, as distinguished from an apparent, -authority, in order to. bind the State by a contract made in its behalf. Carolina National Bank v. State, 60 S. C. 465, 38 S. E. Rep. 629; Throop on Public Officers, section 551; Mullan v. State, 114 Cal. 578, 46 Pac. Rep. 670, 34 L. R. A. 262. We refer to these elementary principles in answer to the argument advanced on behalf of appellants, that the acts and conduct of the Commissioner and! the board stop them from denying the valadity of the contract ¡set-forth in the bill. The doctrine of estoppel when invoked against the State has only a limited application, even when an unauthorized contract on its behalf has been performed, and there by the State has received a benefit, but in cases like the present it has no. application at all. Within about two weeks after the alleged contract was made appellants were put upon notice that the Commissioner and the board did1 not recognize it as an obligation binding upon the State. Appellants' did not claim to have expended any money or to have done any act detrimental to their interest upon the faith of the supposed contract, nor has the State derived any benefit whatever from it. Under these circumstances, if there is in law no' contract by which the State’s right to control the labor and services of the three hundred convicts has been transferred to the appellants by her agents according to the real authority granted themi by statute, it would1 be in *532direct violation of law for the courts to compel their delivery under an invalid contract, upon the ground that the agent who made the contract had by his conduct estopped himself from denying the validity of the same. A conclusive answer to such proposition is that the principal, the State, has not delegated to such agent the power to thus estop it. There must be some act or conduct upon the part of the State through its legislature or other competent authority upon which to base such estoppel, otherwise her agent might be assuring to act in a matter without authority, and afterwards doing some act or being guilty of such misconduct as to stop him1 from denying the valadity of his unauthorized act, hind his principal, thus by two wrongful and Improper acts outside of the powers committed to him giving life to an act originally beyond the scope of his powers.
In view of the conclusion reached it becomes unnecessary to determine whether this proceeding, is in effect a suit against the State, or whether equity has jurisdiction to grant the relief prayed, in the event a valid conrtact were shown.
The case was heard in the Circuit Court upon bill and demurrer of the defendant company, and on an application for a restraining order. A ground of the demurrer, that there was no completed contract with complainants because it appeared that no bond had been approved, goes to the basis of relief not only against the Naval Store® Company, hut also the Commissioner, McLin. It is not insisted that if the demurrer was rightfully sustained on the ground stated the decree dismissing the hill was improper. The Circuit Court correctly sustained *533the demurrer, and as it contained a ground extending to the right of recovery to any extent, we affirm' the decree dismissing the bill. Ordered accordingly.