Luthy v. Woods

• Decision Date: 21 May 1878
• Citation: 6 Mo.App. 67
• Parties: JAMES LUTHY, Plaintiff in Error, v. S. WOODS ET AL., GANAHL ET AL., Defendants in Error; COLE ET AL., Interpleaders, Plaintiffs in Error.
• Court: Missouri Court of Appeals

6 Mo.App. 67

JAMES LUTHY, Plaintiff in Error,

v.S. WOODS ET AL., GANAHL ET AL., Defendants in Error; COLE ET AL., Interpleaders, Plaintiffs in Error.

St. Louis Court of Appeals, Missouri.

May 21, 1878.

1. A provision in a building-contract between the contractor erecting a schoolhouse and the Board of Public Schools, by which it is agreed that the latter may retain in their hands a certain fund out of which to meet the demands of material-men, is valid, and is supported by the consideration which supports the remainder of the contract.

2. Where, in accordance with the intention of all the parties, the board retains the fund for the payment of the subcontractors, equity will treat the transaction as an assignment of the fund, and will apply it to the payment of these subcontractors, to the exclusion of any other creditors of the original contractor.

3. The right of the plaintiff in the present case to sue in equity without having first obtained a judgment at law having been determined in his favor in Luthy v. Woods, 1 Mo. App. 168, cannot now be called in question.

ERROR to St. Louis Circuit Court.

Affirmed.

A. R. TAYLOR, for plaintiff in error.

SAMUEL KNOX, JACOB KLEIN, S. N. TAYLOR, MARTIN & LACKLAND, R. S. VOORHIS, DONOVAN & CONROY, and FORD SMITH, for defendants in error.

HAYDEN, J., delivered the opinion of the court.

The substance of the petition in this case is given in the report of the case of Luthy v. Woods, 1 Mo. App. 167, and need not be here repeated. The Board of Public Schools answered that it was a public corporation; that about November 4, 1872, it had entered into a written contract with Woods & Barnes, the debtors of the plaintiff, by which they agreed to build a certain school-house for the board for a given sum, which was to be paid to them only on their full compliance with the terms of the contract; that thereby Woods & Barnes agreed to deliver the building free from all mechanics' and other liens, and to furnish satisfactory evidence that all the laborers and material-men had been paid; and that in case of failure so to do, the Building Committee might retain necessary amounts to meet claims of such persons until such claims were satisfied. The answer then set forth the names of various persons who had furnished materials to Woods & Barnes for the school-house, and the amounts which the latter had failed to pay, aggregating about $6,080; and admitted that there was in the board's hands $2,442.30 which was claimed by the material-men, and by the present plaintiff, and also by other parties who had brought suits. The board asked leave to pay the fund into court, and it afterwards did so, and was discharged.

Ganahl et al. filed interpleas, admitting the substance of the answer of the board, and claiming that they were subcontractors under Woods & Barnes, to whom they had given notice, they said, of their unpaid claims, as well as to the board. Cole et al., who, as well as the plaintiff, are plaintiffs in error here, filed an interplea, claiming that they were subcontractors, had recovered a judgment against Woods & Barnes on their demand, and that they had, before the plaintiff filed his petition, filed a similar bill to have their demand paid out of the fund; that their case had been decided adversely to them, and was pending by writ of error. Replies were filed by the respective parties. The court below found that the fund in court arose out of the building of the school-house; that Ganahl et al. were entitled to their proportions out of the fund; that Cole et al. were similarly entitled, and in the same ratio; and that the plaintiff had no right to share in the fund as against the interpleaders.

The question as to the right of the plaintiff in this case to sue in equity without having first obtained a judgment at law, was passed upon in Luthy v. Woods, supra. The plaintiff has proceeded upon the faith of that decision, and it should not be disturbed, in any event, as against him. But as it seems to me, on a question involving the dividing line between law and equity and the right to trial by jury, important to keep the adjudicated cases harmonious, and to adhere to principles upon which they all can be reconciled, I desire to say that I do not assent to the decision in Luthy v. Woods, even as subsequently interpreted. In my view, as there was here no original ground of equity jurisdiction, the plaintiff should have obtained a judgment at law. As the plaintiff was a mere general creditor, showing no trust, there was no trust fund to bring the case within what is said in Russell v. Clark, 7 Cranch, 89; O'Brien v. Coulter,2 Blackf. 421; and Miller v. Davidson, 3...