Euclid-Mississippi v. Western Cas. & Sur. Co.

Decision Date04 May 1964
Docket NumberEUCLID-MISSISSIPPI,No. 42894,42894
CourtMississippi Supreme Court
Parties, a Division of Trippeer Organizations, Inc. v. WESTERN CASUALTY & SURETY COMPANY, Inc., et al.

Green, Green & Cheney, Jackson, for appellant.

Cox, Dunn & Clark, Jackson, for appellee.

ETHRIDGE, Justice:

This is a suit on public construction, surety bonds made by Western Casualty & Surety Company, Inc. (called Western Casualty), appellee. It was brought in the Chancery Court, First District of Hinds County, by Euclid-Mississippi, A Division of Trippeer Organizations, Inc. (called Euclid). The trial court dismissed the bill of complaint, because of a prior, pending suit in the circuit court, and under the statutes the chancery court had no jurisdiction of the cause of action.

Actions on contracts for public work are purely statutory. The procedures for them are set forth in Mississippi Code 1942, Rec., sections 9014-9019. If no suit is brought by the obligee (here the State Highway Department) within six months from the completion and final settlement of the contract, then any person supplying labor or materials may be furnished with a copy of the contract and bond upon which he shall have a right of action. Code Sec. 9015. The six months period does not begin to run until the obligee has made final settlement and published notice of it in a county newspaper. Suit must be commenced within one year after that date. Code Sec. 9016.

Code section 9017 provided:

'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 may be made a party to said suit; however, such intervention must occur within the time limited for such person to bring an original action.' (emphasis added)

Effective May 15, 1962, section 9017 was amended (Miss.Laws 1962, ch. 333) to state as follows:

'When suit is instituted, any person entitled to sue may, upon application, intervene and may be made a party said suit; however, such intervention must occur within the time limited for such persons to bring an original action. The surety on said bond, upon application duly made, shall have the right to require all known claimants under the bond to be joined as parties in any action hereunder.'

In 1958 R. G. Brown, Jr. and Dorothy F. Brown, doing business as R. G. Brown, Jr. & Company, a partnership (called Brown), entered into contracts with the State Highway Department for construction of certain highway projects in Jones, Covington and Forrest counties. To guarantee the payment of all labor and material on these projects, Brown made bonds on which Western Casualty was surety. Publication by the State Highway Department of final completion of the Jones County project, pursuant to Mississippi Code 1942, Rec., section 9016, was made in a Jones County newspaper on April 5, 1962. Euclid filed the present bill of complaint in the chancery court on October 5, 1962.

Euclid's bill alleged that it had furnished certain labor and materials to repair the equipment of Brown on contracts in Jones, Covington and Forrest counties; that it sold Brown heavy road building machinery on conditional sales contracts, and was entitled to recover against the contractor's surety for the remaining purchase price or depreciation of this machinery; and that complainant did not know upon which project each piece of equipment was used and for how long it had been used on each. The bill prayed for discovery of these facts, and for a decree against Western Casualty on the bonds for the value of the equipment covered by the conditional sales contracts which was consumed on the jobs, or, in the alternative, that it recover the amount of repairs complainant made on this equipment in order to return it to as good condition as it had been, plus a reasonable rental.

Western Casualty, Brown and others were made defendants. They filed a motion to dismiss the complaint, because it was brought within six months, contrary to Code section 9015, and thus was prematurely begun. The trial court sustained this motion, but, noting the suit had been re-filed on October 23, 1962, it ordered that the complaint be retained on file with like effect as if originally lodged with the clerk on October 23, 1962, on which new process might issue.

The defendants, except Brown, then filed a motion to dismiss the complaint, asserting that an action had been filed on October 6 1962 upon the same surety bond, covering the same project in Jones County, in the Circuit Court of the First Judicial District of Hinds County; that the circuit court action was pending and the first to be filed on the bond; and hence it had exclusive jurisdiction under Code section 9017. At the hearing movants offered in evidence the declaration in the circuit court case, Delta Construction Company of Jackson v. Western Casualty et al., filed October 6, 1962; the process issued by the clerk in that suit; the summons with return for defendants in the circuit court action; and a filed notice of suit.

Sustaining the motion to dismiss, the chancery court held that it had no jurisdiction of the suit, since the circuit court action on the Jones County bond had been filed before the present action, and exclusive jurisdiction was in that court. This appeal is from that order.

First. The present action in chancery court was prematurely brought, within less than six months from the date of publication of final completion. Day v. Royce Kershaw, Inc., 185 Miss. 207, 187 So. 221 (1939). Since the publication was April 5, and the complaint was filed October 5, 1962, this was within the six months which Code section 9015 allows the obligee to bring a suit concerning the contract and its performance. This provision is customary in many public works statutes. 43 Am.Jur., Public Works and Contracts, Secs. 211, 212.

Although the suit was prematurely brought, appellant contends, in effect, that the chancery court automatically acquired jurisdiction of the premature suit upon the subsequent expiration of the six months period, which occurred at 12:01 a. m. October 6, 1962; and that therefore this predated the filing of the circuit court action later in the day on October 6. However, jurisdiction is determined as of the time of filing suit. When the complaint was filed in chancery court, Euclid was under the prohibition of the statute, since the statutory six months period had not expired. Somewhat analogous are the decisions concerning those statutes prohibiting suits against an executor for a certain period of time after appointment. Code Sec. 612; Reedy v. Armistead, 31 Miss. 353 (1856); 34 C.J.S. Executors and Administrators Sec. 729, subd. b(1). A cause of action must exist and be complete before an action can be commenced, and, when a suit is begun before the cause of action arises, it will generally be dismissed if proper objection is taken. 1 Am.Jur.2d, Actions, Sec. 87; Miller v. Fowler, 200 Miss. 776, 28 So.2d 837 (1947).

Appellant re-filed its bill of complaint on October 23, 1962, and thus apparently recognized the fact it was permaturely filed on October 5. At any rate, if the court could acquire jurisdiction of an action prematurely filed by the mere passage of time, without re-filing or other affirmative action, the purpose of Code section 9015, prohibiting a suit being brought by one other than the obligee within six months from publication of final settlement, would be defeated in many instances. Litigants could then adopt the practice of filing premature suits in cases on public construction contracts, and permitting them to remain on file until the prohibition period ended, at which time, at 12:01 a. m., the action would comply with the statute. In such event, the earliest premature suit filed would be the one in which all claimants were required to intervene. The mere passage of time without re-filing is not sufficient. Walker Construction Co. v. Construction Machinery Corp., 223 Miss. 145, 77 So.2d 712, 78 So.2d 475 (1955), did not hold that a prematurely filed suit would become automatically filed upon expiration of the time, but that appellees could assert any rights they might have against the surety when their right to proceed accrued.

Closely related to this issue is United States ex rel. Texas Portland Cement Co. v. McCord, 233 U.S. 157, 34 S.Ct. 550, 58 L.Ed. 893 (1913), which involved a suit by laborers and materialmen under the Heard Act, providing for surety bonds on federal contracts. The court held the suits were brought prematurely, within less than six months after final completion and settlement, upon expiration of six months it was not automatically filed, and this was not cured by filing an amended bill more than one year after such settlement. It emphasized the fact that the statute created a right of action which did not exist before, and it was conditioned upon the fact that no suit should be brought by the government within six months, because it was only in that event the creditors had a right of action:

'The statute thus creates a new liability and gives a special remedy for it, and upon well-settled principles the limitations upon such liability become a part of the right conferred, and compliance with them is made essential to the assertion and benefit of the liability itself.'

McCord has been followed in many cases. Perhaps the latest in principle is Alaska Mines and Minerals, Inc. v. Alaska Industrial Bd., 354 P.2d 376 (Alaska 1960), where the court stated:

'The running of the time within which injunction proceedings might have been instituted was not suspended between the date that appellant filed its complaint and the date that it paid its tax. This is not unlike a situation where a statute forbids the commencement of an action prior to a certain time and not later than another time. If the action is filed prematurely, the expiration of the first period does not automatically revive...

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