Fulghum v. State

• Decision Date: 15 July 1927
• Citation: 114 So. 367,94 Fla. 274
• Parties: FULGHUM et al. v. STATE, for Use of CITIZENS' & PEOPLE'S NAT. BANK OF PENSACOLA.
• Court: Florida Supreme Court

114 So. 367

94 Fla. 274

FULGHUM et al. v. STATE, for Use of CITIZENS' & PEOPLE'S NAT. BANK OF PENSACOLA.

Florida Supreme Court, Division A.

July 15, 1927

Error to Circuit Court, Escambia County; A. G. Campbell, Judge.

Action by the State, for the use of the Citizens' & People's National Bank of Pensacola against S. L. Fulghum and the Union Indemnity Company. Judgment for plaintiff, and defendants bring error.

Reversed.

Syllabus by the Court

SYLLABUS

Public contractor's bond to pay claims for injury to property and for labor and materials held to meet requirements of statute (Rev. Gen. St. 1920, § 3533). When a contractor who has entered into a contract with the state for the construction of public works executes a bond obligating himself to 'promptly pay all just claims for damages for injury to property and for labor and materials incurred by said principal in or about the construction or improvement contracted for,' such bond meets the requirements of section 3533, Revised General Statutes.

Though plaintiff in law action files no replication or similiter submitting cause to jury is not error (Rev. Gen. St. 1920, § 2812). When no replication or similiter is filed by the plaintiff in an action at law, it is not error to submit the cause to the jury.

In action by creditor on contractor's bond, surety may set up practices by creditor and contractor resulting in fraud or unfair dealing to injury of surety and violating spirit of statute (Rev. Gen. St. 1920, § 3533). In an action by a creditor of a contractor engaged in constructing public works upon the bond provided for by section 3533, Revised General Statutes, the surety company may by a plea in bar set up such practices by the creditor and contractor co-operating with him which results in fraud or unfair dealing to the injury of the surety company and in violation of the spirit and purpose of the legislative act to secure to materialmen and laborers reasonably prompt settlement and payment to them of their claims for material furnished and labor performed.

Purpose of statute requiring bond of public contractor held to be to secure payment for labor and materials; public contractor's creditor may not claim payments under contract and apply them on contractor's general indebtedness to it to injury of contractor's surety (Rev Gen. St. 1920, § 3533). In the enactment of section 3533 Revised General Statutes, the state was concerned through its agencies in a proper and beneficial working plan by which claims for material and labor utilized in the construction of public works should be promptly paid. It was not the legislative purpose to provide an instrument in the hands of a general creditor of the contractor for the shrewd manipulation of facts and conditions to the injury of the sureties on the bond, and the deception of the state agencies to the financial advantage of the creditor.

COUNSEL

Robert H. Anderson, of Jacksonville, and William Fisher, of Pensacola, for plaintiffs in error.

Watson & Pasco & Brown, of Pensacola, for defendant in error.

OPINION

ELLIS, C.J.

This case is here on writ of error to a judgment in favor of the defendant in error, plaintiff below, against S. L. Fulghum and Union Indemnity Company.

S. L Fulghum had entered into a contract with the state of Florida through the proper agency to construct or improve a certain road from Pensacola to Roberts, in Escambia county. Fulghum executed a bond, with the Union Indemnity Company as surety and the state of Florida as obligee, binding himself, among other things, to 'promptly pay all just claims for damages for injury to property and for labor and materials, incurred by said 'principal' in or about the construction or improvement contracted for.'

In the case of Fulghum et al. v. State, 109 So. 644, this court held that such condition met the requirements of the statute, and afforded protection to persons supplying labor and materials in the prosecution of public works. See section 3533, Revised General Statutes 1920.

In the performance of his contract Fulghum became indebted for materials and labor. For materials he became indebted to Escambia Sand & Gravel Corporation in the sum of $10,443.50; Roquemore Gravel Company in the sum of $1,702.40; Edward Campbell in the sum of $2,065.75; W. R. Taylor & Co. in the sum of $25,580.65; and to Truscon Steel Company in the sum fo $570--making a total of $40,290.30--and to numerous laborers in the sum of $3,734.38. These items of indebtedness ranged from 50 cents to $40 in amount for labor performed from the week ending October 6, 1923, to the week ending November 23, 1923, which was Friday. There were some 290 items on the bill of particulars on this account, many names appearing on each week's pay roll.

These accounts, as alleged, were all assigned to the bank before the commencement of the action, which was brought by the bank in the name of the state against the surety company and Fulghum for the recovery of the amount alleged to be due. The declaration does not allege that any one of the various creditors of Fulghum nor the bank made application to the treasurer of the state or other public authority having charge of the work for a copy of the contract and bond, nor that any of them made affidavit that labor or materials for the prosecution of the work had been supplied by them and payment for which had not been made. The statute provides that, upon complying with this requirement, such persons shall be furnished with a certified copy of the contract and bond, 'upon which, said person, or persons, supplying such labor and materials, shall have a right of action, and shall be authorized to bring suit in the name of the state of Florida,' for his or their use and benefit against the contractor and sureties. Section 3533, supra.

Fulghum and the Union Indemnity Company demurred to the declaration, and the same was overruled.

After this order was made, the plaintiff, by leave of the court, amended its declaration by adding five counts. These additional counts merely dealt severally with the claims of the materialmen and corporations for materials furnished; each claim forming the basis of one count.

The original declaration contained two counts. In the first the claims of the materialman were grouped, and in the second all the claims of persons for labor were grouped.

Prior to the amendment the defendant moved the court to require the plaintiff to amend the counts by making each claim the basis for a separate and distinct count. No action was taken on this motion, and the defendants on April 7th interposed twenty-five pleas.

The plaintiff demurred to the twenty-third, twenty-fourth, and twenty-fifth pleas, which demurrer was sustained. These pleas were originally pleaded as defenses on 'equitable grounds,' and by leave of the court those words were stricken from the pleas.

The record then recites that on June 16th following the defendant 'filed pleas Nos. 26 to 36, inclusive.' They are all copied in full in the transcript.

The plaintiff again demurred to pleas numbered 23, 24, and 25 as they stood, after striking the words 'on equitable grounds' from each. It also demurred to pleas numbered 26, 32, 33, and 34. This demurrer was also sustained. Pleas numbered 33 and 34 were first filed as pleas on equitable grounds, and, after demurrer sustained, the words 'on equitable grounds' were by leave of the court stricken, and they were again demurred to and the demurrer sustained.

Then, on September 3d following, the defendant interposed pleas numbered 37 to 42, inclusive. These were pleas to the second count of the declaration. They were pleas of never indebted; never promised; payment; denial of assignment of claims to the bank; denial of ownership by the bank of the claims and denial that the claims were for labor performed by the plaintiff's assignor.

Then followed replications to all pleas except those numbered 3, 5, 8, 12, 16, 20, 23, 24, 25, 26, 32, 33, 34, and 37, 38, 39, 40, 41, and 42; the first series from 3 to 20, inclusive, having been stricken on motion, the second series from 23 to 34, inclusive, having gone out on demurrer, and the third series from 37 to 42 being pleas to the second count, not being replied to at all.

At the end of this logomachical sparring the parties went to trial on pleas numbered 1, 2, 4, 6, 7, 9, 10, 11, 13, 14, 15, 17, 18, 19, 21, 22, 27, 28, 29, 30, 31, 35, 36, 37, 38, 39, 40, 41, 42 to the second, third, fourth, fifth, sixth, and seventh counts of the declaration; the first count having been withdrawn.

The issues thus presented by all the above- numbered pleas being simply whether the debt was due; whether the claims or any part thereof had been paid; and whether the bank owned them.

Upon completion of the testimony, the 'court, on motion of the plaintiff, directed the jury to render their verdict in behalf of the plaintiff.' A general verdict for the plaintiff was rendered in the sum of $36,051.48, 'with interest from date of suit.' Judgment was thereupon entered for the total sum of $38,591.11, which included interest in the sum of $2,539.63.

The claims set forth in the first court, which by the amendment became the third, fourth, fifth, sixth, and seventh counts, amounted to a total of $40,290.30, and that of the second count to the sum of $3,734.38, or a total sum of $44,024.68.

To this judgment the defendants took a writ of error.

The claims which formed the basis of the fourth, fifth, and seventh county amounted respectively to $1,702.40 $2,065.75, and $570.00, according to the bill of particulars, while the total of claims forming the basis of the second count amounted to $3,734.38, or a greater sum than the amount of the claims forming the basis of either...