Day v. Royce Kershaw, Inc.

• Decision Date: 20 March 1939
• Docket Number: 33622
• Citation: 185 Miss. 207,187 So. 221
• Court: Mississippi Supreme Court
• Parties: DAY et al. v. ROYCE KERSHAW, INC

187 So. 221

185 Miss. 207

DAY et al. v. ROYCE KERSHAW, INC

No. 33622

Supreme Court of Mississippi, Division A

March 20, 1939

APPEAL from circuit court of Monroe county HON. THOS. H. JOHNSTON Judge.

Suit by C. C. Day and others against Royce Kershaw, Inc., and another on bond executed by the named defendant for benefit of persons supplying labor or materials for construction of public highway. From judgment rendered, certain plaintiffs appeal. Reversed and remanded.

Judgment reversed and cause remanded.

Leftwich & Tubb, of Aberdeen, for appellants.

The trial court committed error in sustaining the demurrer to plaintiffs' replication and in awarding a judgment in behalf of defendants below. This action is brought on the contractor's bond which is given under and by virtue of the provisions of Article 6 on the subject of Public Contracts, sections 5971-5976, inclusive, of the Code of 1930, and also the provisions of chapter 47, Laws of 1930 with reference to the bonds of public contractors.

It will be observed that under section 5971 of the Code of 1930 the contractor "shall promptly make payments to all persons supplying labor or material therefor."

It is manifest that prompt payment, provided for in this statute does not mean that the contractor and the surety on his bond shall have the right for a period of five years to deny liability and resort to every known legal device to avoid payment, and then, when he is sued, come into court and say that he is not liable for the services of an attorney employed by the persons who furnished material so as to bring him to justice and to the sense of his obligation. This is especially true in view of the fact that the condition written into the face of his bond is to the effect that if he fails to pay, he shall be liable to the persons who furnish labor or material for all the expense and costs and attorneys' fees they may have incurred in the enforcement of the performance of the contract or in the enforcement of the conditions and obligations of the bond. The bond is, of course, a part of the contract; and the contract is a part of the bond. This provision or provisions, almost in identical words, has been construed by this court and held to require the contractor and his bond to pay attorneys' fees.

MaElrath & Rogers v. Kimmons & Son, 146 Miss. 775, 112 So 164; Stowell v. Clark, 152 Miss. 32, 118 So. 370; Treas v. Price, 167 Miss. 121, 146 So. 630.

Suits have been brought all over the State of Mississippi by materialmen against contractors and sureties on their bonds, without regard to whether or not the State Highway Commission had made publication of notice of the completion and final settlement, as provided by section 5973 of the Code of 1930. The State Highway Commission had adopted a policy not to make publication of notice in any of these cases. They had been informed by the attorney-general that they were under no duty to do so, and they did not and would not do so except in cases where interested parties made special request for publication; and even then these parties were required to bear the expense of the publication.

Oliver Construction Co. v. Crawford, 142 Miss. 490, 107 So. 877; Marquette Cement Mfg. Co. v. Fidelity & Deposit Co., 173 Miss. 164, 158 So. 924; Dixie Minerals Corp. v. Dixie Asphalt Paving Co., 172 Miss. 218, 159 So. 562.

We took the position, and we take the position now, that since the contractor in this case failed to make prompt payment of these claims for materials that entered into the construction of the work, that he individually became suable, but regardless of whether or not a cause of action had accrued against him, individually, without his bond, these materialmen were justified in placing their claims in the hands of an attorney for collection.

We think these creditors occupied the position of the payee of a promissory note containing the provision that if the note was not paid when due and was placed in the hands of an attorney for collection, the maker would pay a reasonable attorney's fee. Such a provision in a note has been construed by practically all the courts of the land as valid and binding. It does not require the actual suit to be brought in order to justify the collection of the attorney's fees. It is assumed that when the maker is sufficiently prodded and coaxed he will comply with his obligation and pay without suit. So it is in the case at bar. These materialmen were clearly justified. The necessity had arisen for placing their claims in the hands of their attorneys long before the first suit was brought, and, of course, long before the second suit was brought, in fact, approximately five years before the second suit was brought. These creditors had the right to assume that when their attorneys presented their claims to the contractor and the surety on his bond in a proper and vigorous manner, that these parties would be coaxed into payment without the necessity of actually bringing suit in court.

Furthermore, according to the conditions then existing, including the misunderstanding of the proper construction of these statutes, not only by the lawyers in the state, but by the members of the Supreme Court, itself, it seems to us that appellees here, the contractor and the surety on his bond, could not complain of having to pay an attorneys' fee when they had breached their bond, denied liability, and for a period of five years put forth every known means of defense which ingenious counsel could devise to prevent payment.

Watkins & Eager, of Jackson, for appellees.

We have no fault to find with any of the three authorities cited by counsel for appellants. Counsel cite no case even remotely dealing with the right to recover costs and attorneys' fees in a suit which was reversed and dismissed by the Supreme Court of the state and which was so defective that the judgment in the lower court was absolutely void, in that there was no cause of action whatsoever in the plaintiff-appellees.

It is true that in the present suit appellants could have recovered attorney's fees and costs incurred in this suit had tender not been made prior to the bringing of the suit and by pleadings at the first available moment. That the tender here prevents any liability for attorneys' fees or costs in this suit, has been definitely settled by this court.

National Union Fire Ins. Co. v. Currie, 178 So. 104, 180 Miss. 711; Lbr. Co. v. School District, 214 P. 143; Easley v. Easley, 229 S.W. 343; Schultz v. Contracting Co., 265 N.W. 296; Aetna Ins. Co. v. Foster, 66 S.W.2d 428; Tucker v. Lowenthal, 204 P. 772; Sec. 563, Code of 1930. That a tender stops the running of interest subsequent to the tender is announced in Hoffman v. Rose Dress Co., 166 N.Y.Supp. 172; 33 C. J. 241, par. 145; Hidden v. Jordan, 39 Cal. 61; Sanders v. Mosbarger, 141 S.W. 720; Bank v. Smith, 98 S.E. 418; Easton v. Littlloy, 91 Wash. 648, 158 P. 531.

The actual production of the money is dispensed with if the party is ready and willing to pay the same, but is prevented by the party to whom it is due expressly saying that it need not be produced, as he would not accept it, or if he declares that he will not receive it, or refuses to remain until it is produced, or repulses the debtor, or makes some unjustifiable demand as a condition of accepting the tender.

62 C. J. 673; Wesling v. Noonan, 31 Miss. 599.

We respectfully submit that there was no obligation upon the part of the surety to voluntarily pay these appellants until all of the requirements of the statutes had been compiled with and a property statutory suit had been brought; that there was no "enforcement of the conditions and obligations of this bond" in the prior suit; that at the most, there was a bungled attempt, without a compliance with the statute, to enforce these obligations by means of the prior suit; that there is nothing involved in this case to take the question of attorneys' fees and costs in the prior suit out of the usual rule in regard to such fees where a suit is reversed and dismissed upon appeal.

The law in regard to costs and attorneys' fees, where the judgment below has allowed the same but where the suit is reversed and dismissed by the appellate court, is well settled. The rule is the same as in regard to costs and attorneys' fees and where attorneys' fees are allowed, they are in reality part of the costs and allowed and taxed as costs.

Aetna Life Ins. Co. v. Thomas, 166 Miss. 53, 144 So. 50, 146 So. 134; Sec. 668, Code of 1930; Boyd v. Appelwhite, 85 So. 87, 123 Miss. 185.

That where a case is reversed and finally determined by an appellate court, costs must be paid by, or can be recovered from the appellee, is the majority rule.

Railroad Co. v. Spiller, 72 L.Ed. 214, 275 U.S. 156; In re: Gallo's Estate, 235 P. 66; Bradley v. Shreveport Gas, etc., Co., 76 So. 230.

Turning to cases dealing specifically with attorneys' fees, we wish to direct Your Honors' attention to Wunderlich v. Simpkin, 5 La. App. 35; Tyler v. Walker, 47 S.W. 424.

A statutory attorneys' fee cannot be recovered by the...