Chamberlin-Hunt Academy v. Port Gibson Brick and Manufacturing Company

• Decision Date: 02 June 1902
• Citation: 80 Miss. 517,32 So. 116
• Court: Mississippi Supreme Court
• Parties: CHAMBERLIN-HUNT ACADEMY ET AL. v. PORT GIBSON BRICK AND MANUFACTURING COMPANY

32 So. 116

80 Miss. 517

CHAMBERLIN-HUNT ACADEMY ET AL. v. PORT GIBSON BRICK AND MANUFACTURING COMPANY

Supreme Court of Mississippi

June 2, 1902

March 1902

FROM the chancery court of Claiborne county HON. WILLIAM C MARTIN, Chancellor.

The Port Gibson Brick and Manufacturing Company, appellee, was the complainant in the court below; the Chamberlin-Hunt Academy and the Rothrock Construction Company, the appellants, were defendants there. The facts were as follows On the 2d of May, 1900, the Chamberlin-Hunt Academy entered into a written contract with one, Samuel W. Rothrock, a natural person, for the construction of a large building near Port Gibson, by the terms of which Rothrock was to erect the building, furnishing all of the material, free of cost to the academy, and was to be paid in specified installments as the work progressed. Rothrock, however, bound himself to execute a bond, in the sum of $ 15, 000, with a guaranty company as surety, payable to the academy, conditioned for the faithful performance of his contract.

Rothrock failed to execute this bond, and because thereof, on the 29th of August, 1900, the contract was amended by a supplemental writing, by which the academy agreed to take Rothrock's personal bond, and in consideration thereof the contractor Rothrock, agreed that the academy's trustees should thereafter pay (out of the moneys that might, but for the supplemental agreement, have become due him in the progress of the construction of the building) bills for labor, materials and other expenses therein until the completion of the work, and nothing was to become due the contractor until all such bills were paid by the academy, and then only the balance, if any, beyond the amount of such bills that might remain of the contract price in its hands. It was further stipulated in the supplemental contract that one McGraw should be superintendent of the construction of the building until its completion, and all payments were to be made only upon a certificate of the superintendent or the architect that the work was done according to the specifications, and that in his judgment the payment was properly due.

After this, during the month of September, 1900, and when the supplement to the contract was in force, the Rothrock Construction Company, a corporation, and not Samuel W. Rothrock, purchased bricks from the appellee, the Port Gibson Brick and Manufacturing Company, for which it charged that company something over $ 900, and these bricks were used in the construction of the academy's building.

On October 1, 1900, the Port Gibson Brick and Manufacturing Company, appellee, gave notice to the academy that the Rothrock Construction Company, the corporation, owed it $ 904.20 for bricks furnished them, meaning the corporation, and requested that funds in the hands of the academy's trustees, belonging to the corporation, be held subject to a lien, etc. This suit was brought to recover the sum for which the bricks were sold by complainant to the Rothrock Construction Company.

[As a matter of history it may not be amiss to say, as shown by the record, that the erection of the splendid building, costing $ 76, 000, by Chamberlin-Hunt Academy, from which the controversy in this case arose, was rendered possible by the generous donation of $ 50, 000 made to it by the late J. J. McComb, a philanthropist of Dobb's Ferry, New York. Mr. McComb was a native of Claiborne county, this state, and the building, standing at the place of his nativity, is a monument to his ability and benevolence.]

Case reversed and remanded.

McWillie & Thompson and J. McG. Martin, for appellant, Chamberlin-Hunt Academy.

Under its contract with Samuel W. Rothrock, the academy was not due, or legally liable to pay, Rothrock anything, or to pay others who had advanced him, even material for the building without the certificate of the superintendent or architect required by the contract, that the payment was due. Rothrock, the contractor, with whom the contract was made, could not rightfully demand payment as for work done or materials without such a certificate. If the academy be not liable to Samuel W. Rothrock, it cannot be liable to his creditor (to say nothing of a creditor of the corporation, another person). By the contract the certificate of the superintendent or architect was absolutely necessary to impose liability to Rothrock, therefore it was necessary to impose liability to appellee, the brick company.

The academy, at the time of the service of the notice upon it (October 1, 1900) was not indebted to the contractor, or to any one else on account of said building enterprise. It never paid the contractor a dollar thereafter, and all that the academy ever paid to any one was paid on bills duly certified by the superintendent for labor upon and material placed in the building, and of course the payments were to people who certainly had equal rights to the fund with any appellee possessed. They in. fact had superior rights since their claims were duly certified, and were thereby brought within the terms of the contract; and such payments by the academy exhausted the sum to be paid the contractor and left nothing to become due him, long before the building was completed. In short the academy did not owe the contractor when it was served with the notice, and never at any time thereafter owed him one cent; on the contrary, he is largely indebted to the academy. It must be remembered that under the contract, as amended, Rothrock assigned the funds, which otherwise might have accrued to him, to the parties who were to labor on and furnish materials for the building, and whose bills therefor should be certified by the superintendent or architect, and this made the academy liable to such persons; and of course when these bills were paid (as they were), to an extent equal to the full contract price, there could not remain any liability to Rothrock.

To sum it all up, the position of the parties, after August 29, when the supplemental contract became operative, was this: Rothrock was to build the house, furnishing all necessary labor and materials; the academy (not as provided in the original contract) was to make payments as the work progressed, not to Rothrock, the contractor, but to those parties (his assignees, in equity at least) from whom he obtained labor and materials, and whose bills were duly certified as provided in the contract, and at the completion of the work it was to pay over to Rothrock whatever, if anything, remained of the contract price.

By the contract, the academy was liable to laborers and materialmen, whose bills were properly certified for the sums due them, and of course not liable to Rothrock for said sums.

Because of a disagreement the brick company was unable to have the account sued upon certified. It therefore, without the fault of the academy, was unable to bring itself within the terms of the contract which made the academy liable to it for the bricks (as upon a contract made with a third party for its benefit), and cannot hold the academy upon that contract. The bill proceeds upon a tacit admission of this. If it can recover at all therefore, it must do so upon the idea of enforcing a materialman's lien. Can it do this? Before discussing the question, let us call the court's attention to the fact that while the bill is based upon the materialman's lien idea, and is manifestly an effort to enforce such a lien, yet the chancery court, by its final decree, repudiated the idea of the complainant's counsel; it refused to enforce a lien; it did not adjudge the academy indebted to Rothrock or the Rothrock Construction Company, but rendered a personal decree for the amount of complainant's demand against the academy, Rothrock (who was not a party to the suit), and the Rothrock Construction Company, and this is the decree from which the appeal is taken.

Certainly this decree is erroneous. It could only be justified upon the idea that the academy was personally liable to the brick company, under the contract, since there is no pretense that the academy purchased the bricks. It was not so liable upon the contract, since in its modified form payments could be rightfully demanded of the academy only upon the certificate of the superintendent or architect, and the brick company never procured or presented such a certificate. The decree therefore will have to be reversed.

It will be remembered that Rothrock was continued as the contractor after as well as before the modification of the agreement; that the academy was contracting for a building, and not for materials, upon the grounds or improperly placed in the walls. It became liable to pay only when the work was approved by the superintendent or architect. The modified contract made it liable to those who furnished labor and materials upon same conditions, when the work was approved and certificate furnished. The bills of materialmen and laborers could not be "O. K'd" (to use the language of the witnesses), or the requisite certificate furnished, until then, and without such certificate the academy was not liable to the contractor or to the laborers and materialmen. The only possible way in which, in the absence of a certificate, the academy could be held liable personally to the brick company would have to be based on evidence that it had fraudulently caused the certificate to be withheld. There is not one particle of such evidence in this case.

Now let us enquire whether the academy can be subject to a lien in favor of the appellees, and this too on the real merits, aside from defects in the notice. Under code 1892, § 2714, a notice by a materialman to the owner only affects "the amount that may be due by such owner to the contractor, " and it is "bound and...