First Nat. Bank v. Perkins

• Decision Date: 15 March 1921
• Citation: 81 Fla. 341,87 So. 912
• Parties: FIRST NAT. BANK OF ST. AUGUSTINE et al. v. PERKINS et al.
• Court: Florida Supreme Court

87 So. 912

81 Fla. 341

FIRST NAT. BANK OF ST. AUGUSTINE et al. v. PERKINS et al.

Florida Supreme Court

March 15, 1921

Action by the Marshall & Spencer Company and others against the First National Bank of St. Augustine, Seth Perkins, and others. Decree for complainants, and defendants appeal.

Reversed.

Whitfield J., dissenting in part.

Syllabus by the Court

SYLLABUS

Street improvement contract providing for retnetion of part of contract price held not to create trust fund for benefit of laborers and materialmen. A contract for street improvement provides 'that 15 per cent. of the entire contract price shall be retained and held by the city * * * for a period of 30 days after the completion of said grading, paving, and curbing of said * * * avenue, and that said per cent. of said contract shall be held and retained by the said city * * * for the purpose of having a sufficient sum of money to make any alterations or repairs and to do any work the contractors may neglect, fail, or refuse to do,' and also 'that before the last payment is made to the contractors that said contractors shall produce to the city good and sufficient proof that all bills for labor and material furnished or performed, in reference to said street, by other persons to the contractors, have been fully paid. It is the intention herein that the contractors shall show that they have paid for all work and material before they receive their last payment for work and material under this contract.' Held that such provisions are not so definite as to clearly evince an intention upon the part of the contracting parties to create a trust fund for the benefit of unpaid creditors of the contractors who might have supplied labor and material to them in prosecuting the work under the contract.

That the maker of promise to one person for benefit of a third shall become debtor of such third person, such intent by both first and second must appear. In order that a promise made by one person to another for the benefit of a third person shall constitute the first the debtor of the third and entitle the third person to sue the first on such promise, it must appear that there was a clear intent upon the part of both the first and the second that the first person shall become such debtor. The mere fact that the third might be benefited is not sufficient.

Purpose of statute allowing civil action to be maintained in name of real party in interest stated. The purpose of the statutory provision (Gen. St. 1906, § 1365) that 'any civil action at law may be maintained in the name of the real party in interest' is to relax the strict rules of the common law so as to enable those directly interested in, but not parties to, a contract, to maintain an action for its breach; and the statute should be so applied as to accomplish its salutary purpose.

Surety's liability not enforceable in equity in absence of equitable considerations. The liabilities of sureties on a surety bond cannot be enforced in equity in the absence of equitable considerations.

Decree pro confesso not binding as to matters not properly adjudicated. A decree pro confesso does not bind a defendant as to matters not properly adjudicated in the suit.

Appeal from Circuit Court, St. Johns County; George Couper Gibbs, judge.

COUNSEL

C. M Cooper, Chas. P. & J. J. G. Cooper, of Jacksonville, W. A. MacWilliams and George W. Bassett, Jr., both of St. Augustine, and Cooper, Cooper & Osborne, of Jacksonville, for appellants.

Axtell & Rinehart, of Jacksonville, for appellees.

OPINION

WHITFIELD J.

On May 6, 1916, a bill of complaint was filed by Marshall & Spencer Company, a corporation, the Dixie Portland Cement Company, a corporation, and John Baker, Jr., against Seth Perkins, Seth Perkins, Jr., and A. H. Perkins, partners as Seth Perkins & Sons, the city of St. Augustine, the First National Bank of St. Augustine, and the National Surety Company, a corporation.

It is in substance alleged that about March 31, 1915, Seth Perkins & Sons contracted with the city of St. Augustine for the grading, paving, and curbing of Cincinnati avenue, a public street of said city; that the work has been completed by the contractors and accepted by the city; that on April 6, 1915, Seth Perkins & Sons as principals executed to the city a bond for $1,500 with the National Surety Company as surety 'conditioned that, if the said Seth Perkins & Sons shall in all things stand to and abide by and well and truly keep and perform all the agreements, terms, and conditions of said contract between them and the said city of St. Augustine, and shall also pay for all labor performed or furnished, and for all materials used in carrying out said contract, then the said obligation shall be void; otherwise remain in full force and virtue'; that on or about May 6, 1915, 'the said Seth Perkins & Sons assigned to the First National Bank of St. Augustine, to secure the said bank for advances already made and for further advances to be made to the said Seth Perkins & Sons, all and every payment which may be made under the said contract between the said Seth Perkins & Sons and the city of St. Augustine for paving Cincinnati avenue in said city, and did authorize and direct the said city of St. Augustine to make any payment on the above contract to the First National Bank of St. Augustine, and did authorize said bank to receipt for the same'; that between June 1, 1915, and August 10, 1915, the Marshall & Spencer Company 'furnished certain materials to the said Seth Perkins & Sons for use in the prosecution of the work of paving said street, and which said material was so used by the said Seth Perkins & Sons,' for which there is due $575.28; that an action at law has been granted thereon; that the Dixie Portland Cement Company between May 27, 1915, and July 2, 1915, furnished to Seth Perkins & Sons material for use in paving said street, on which is due $676.30; that an action at law has been brought thereon; that John Baker, Jr., on or about May 20, 1915, furnished 'the said Seth Perkins & Sons certain material for use by the said Seth Perkins & Sons in paving said street,' for which there is now due $873.60, for which an action at law has been instituted; that 'it was provided in and by said contract between the said Seth Perkins & Sons and the city of St. Augustine that 15 per cent. of the entire contract price should be retained and held by said city for a period of 30 days after the completion of the work of paving the said Cincinnati avenue, and it was further provided in and by said contract that the last payment to be made to the said Seth Perkins & Sons under said contract should not be made until the said Seth Perkins & Sons should produce good and sufficient proof that all bills for labor and material furnished or performed with reference to said street by other persons than the contractors had been fully made; that the said city of St. Augustine now has and holds the sum of $1,600, which has been retained by the city of St. Augustine under the terms of said contract, and which has not been paid on account of said contract, because of the failure of the said Seth Perkins & Sons to furnish proof of the payment of all bills for labor and material aforesaid;' that the assignment 'made as aforesaid by Seth Perkins & Sons to the said First National Bank of St. Augustine is subordinate to the rights of your orators in and to the money due from the said city of St. Augustine to the said Seth Perkins & Sons, and that the said bank is not entitled to have or receive any money by reason of said assignment until the amounts due to your orators for materials furnished to the said Seth Perkins and used by them in the paving of said street have been fully paid; that your orators have no knowledge or notice of said assignment until after they had furnished the materials to the said Seth Perkins & Sons as aforesaid'; that 'the said Seth Perkins & Sons have no property other than the amount due them from the said city of St. Augustine as aforesaid, out of which the judgments which your orators expect to obtain against the said Seth Perkins & Sons can be satisfied.

The prayer is that an account be taken of the amounts due complainants, and that 'a decree may be made directing the defendant the city of St. Augustine to pay the amount held by the said city due to the said Seth Perkins & Sons on account of the said contract to your orators, and in the event that the said amount is insufficient to pay the same in full, then the said defendant the National Surety Company shall be decreed to pay the balance which may be decreed to be due to your orators as aforesaid.'

The portions of the contract that are material here are:

'It is distinctly understood, covenanted, and agreed by and between the parties hereto that the work of grading, paving, and curbing of the entire distance of Cincinnati avenue, a public street of the city of St. Augustine, Fla., from the west side of San Marco avenue to the east side of Ribera street, as is set forth and described, both as to work and area of paving, curbing, and grading, under and by virtue of Ordinance No. 104 of the city of St. Augustine, Fla., shall be done in the best workmanlike manner and as is described by said Ordinance No. 104 of the city of St. Augustine, Fla., and that all said work shall not only be done according to the specifications above mentioned and in conformity with Ordinance No. 104, above mentioned, but also according to the plans on file in the office of the city clerk, which said plans are hereby made a part of this contract.

'It is a further condition of this contract that within ten (10) days of the signing of these presents the parties of the second part, to wit Seth Perkins,

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