Commercial Bank of Magee v. Evans

• Decision Date: 28 February 1927
• Docket Number: 26315
• Citation: 145 Miss. 643,112 So. 482
• Court: Mississippi Supreme Court
• Parties: COMMERCIAL BANK OF MAGEE et al. v. EVANS et al. [*]

112 So. 482

145 Miss. 643

COMMERCIAL BANK OF MAGEE et al. v. EVANS et al. ^[*]

No. 26315

Supreme Court of Mississippi

February 28, 1927

Division B

Suggestion of Error Overruled March 28, 1927.

APPEAL from chancery court of Simpson county HON. T. PRICE DALE Chancellor.

Action by J. M. Evans and others against L. D. Owens, contractor and sureties on his bond. Decree for the complainant and the defendants appeal. Affirmed.

Affirmed.

W. M. Lofton, for appellant.

The bond of the contractor signed by these appellants, has a condition in it, which is in the following words and figures, to-wit: "Now, if the said L. D. Owens shall perform said contract in a prompt, proper and efficient manner, then this obligation shall be void; otherwise it shall remain in full force." Signing a bond with this sort of condition imposed, does not make the sureties liable for claims for labor done and materials furnished, but the lower court has decided this very question adversely to these appellants.

We are familiar with chapter 217 of the Laws of 1918, and refer this court to section 1 of that chapter. We call the attention of the court to the fact that it says that the authorities of any county, or other subdivision of the government, when letting contracts for any public works, may require the contractor to furnish bond in the usual form, with good and sufficient sureties, "With the additional obligation that such contractor or contractors shall promptly make payments to all persons supplying labor and materials therefor" etc., but the bond in the case before this court did not contain that "additional obligation," and certainly in the absence of this "additional obligation," these appellants, who were the sureties, are not liable for these claims. This court has expressly held that the sureties on the usual bond provided for by section 361 of the Mississippi Code of 1906, and conditioned for the "prompt, proper, and efficient performance of the contract," and which did not contain "the additional obligation that such contractor shall promptly make payments to all persons supplying labor or material," are not responsible therefor. Pidgeon Thomas Iron Co. v. Leflore County et al., 99 So. 677, 135 Miss. 155. Of course, the bond furnished in the case just cited was a bidder's bond and when the contract was awarded to the successful bidder, under the conditions imposed in the bidder's bond, it was its duty to make a performance bond.

But this court held in that case, that the surety on the bond was not liable, because there was no bond, containing the "additional obligation" to make prompt payment to all persons supplying labor and material therefor. Certainly in the face of this decision, the court erred in overruling the demurrers, which is the first assignment of error. Then if the demurrer should have been sustained, then certainly the court erred in rendering final decree for appellees. The trustees approved the bond in the usual form, which did not contain the additional obligation that the sureties would be responsible for all claims for labor done and materials furnished in the building of the school house. Therefore, they are not liable. Now, where the bond contained the "additional obligation," to take care of the claims for labor done and performed and materials furnished in the course of the performance of the work, then, certainly the sureties are liable for such claims, and they have no right to complain because they have expressly contracted to do this identical thing. This court has recently so held, and in doing so, it was only holding the surety to his contract. This was the holding of this court in the case of the Oliver Construction Co. et al. v. Dancy et al., 102 So. 568, 137 Miss. 474.

This court erred in overruling appellants' demurrer, and also in rendering a final decree for appellees, which constitute the only two assignments of error.

Howie & Howie, for appellees.

Appellees herein furnished materials to the contractor, L. D. Owens, for the construction of the said school building and the debts sued on in this cause and for which judgment was rendered, were all for material furnished by the several appellees.

The county superintendent had paid out all of the money called for by the contract of L. D. Owens except the amount shown in the decree in this cause and had refused to pay this out until the appellees' claims were paid. The appellants and C. T. Shorter, one of the school trustees, during this time, instituted suit against Monroe Ball, superintendent of county schools, to compel him to pay the money on hand over to the appellants, claiming that they had an assignment from L. D. Owens, the contractor, which entitled them to said money. The appellants did not attempt to file suit under Code Chapter nor under chapter 128, nor chapter 217, of the Acts of 1918. There was no attempt to make all parties interested parties to their suit. In consequence, of this, the materialmen, the appellees and others, were not made parties to this suit and had no notice of the same and so did not appear therein.

A so-called agreed decree was entered in vacation by which certain distributions of the funds remaining on hand was agreed to be made. The county superintendent, Ball, however, did not agree to the decree in the form in which it was finally entered. See Transcript, pages 150 and 151. This decree was entered without the knowledge, consent or approval of the appellees and without them being in any way made parties to the suit. Appellees made proof of their claim and substantiated the same to the satisfaction of the court.

There are two points to be presented in this cause, to-wit:

First: Were the materialmen bound by a so-called agreed decree taken in vacation in a cause in which they were not parties and which cause was not filed in accordance with chapters 128 and 217 of the Acts of 1918, and which was not actually agreed to by Superintendent Ball, one of the parties thereto?

Second: Are the sureties on the contractor's performance bond relieved from the liability to the materialmen because the bond was not conditioned according to law?

Chapter 128, Laws of 1918, section 6, stated: "When suit is so instituted by any person only one action shall be brought and any person entitled to sue may, upon application, intervene and be made a party to said suit."

Chapter 217, Laws of 1918, section 4, has the same provision. Chapter 128, provided the manner in which this one suit shall be brought, the gist of which is as follows: "And thereupon all persons entitled hereunder, so far as known, shall be made parties and summoned into court to protect their rights, contest the demands of such contractor or master workmen and the other claimants; and the court shall cause an issue to be made up and tried and direct the payment of the amount found due in accordance with the provisions hereof." It is also provided that all unknown persons having or claiming any interest against the contractor or building shall be made parties defendant and publication made for them.

The bank and Mr. Shorter have no right to recover in the present case for the following reasons, to-wit:

1. Because no proof was offered by them on the trial of this cause to substantiate their claim.

2. The claim of the bank and Mr. Shorter, as far as this record discloses, was based on an assignment to them by the contractor, L. D. Owens. Section 2, of chapter 128, Laws 918, provide as follows:

"No contractor or master workman, except as hereinafter provided, shall have the right to assign, transfer, or otherwise dispose of in any way, the contract or the proceeds thereof, to the detriment or prejudice of the subcontractors, journeymen, laborers, and materialmen as declared hereinbefore and all such assignments, transfers, or dispositions shall be subordinate to the said rights of the subcontractors, journeymen, laborers and materialmen, as well as the owner."

Said assignment would be good only on proof that solvent bond had been given. Appellant wholly failed to make such proof.

3. The proceeding in which the so-called consent decree was taken was not instituted in accordance with the statute chapters 128 and 217, Laws 1918, and there was no attempt to conform to the statute in the institution of said suit.

Counsel for the bondmen have filed a brief herein in which they rely upon the fact that the bond was not conditioned as provided by the statute, in their attempt to avoid the liability to the materialmen, Chapter 128, Laws of 1918, provides with reference to the particular matter where a bond is given under the contract as in this case as follows:

"Such bond shall also be subject to the additional obligations that such...