Mississippi Fire Ins. Co. v. Evans

• Decision Date: 25 February 1929
• Docket Number: 27642
• Citation: 120 So. 738,153 Miss. 635
• Court: Mississippi Supreme Court
• Parties: MISSISSIPPI FIRE INS. CO. v. EVANS et al. [*]

120 So. 738

153 Miss. 635

MISSISSIPPI FIRE INS. CO. v. EVANS et al. ^[*]

No. 27642

Supreme Court of Mississippi

February 25, 1929

Division A

Suggestion of Error Overruled April 8, 1929.

APPEAL from chancery court of Hinds county; First district, HON. V J. STRICKER, Chancellor.

Action by the city of Jackson and its board of education against the Mississippi Fire Insurance Company and others, wherein defendant named filed a cross-bill. From a judgment therein in favor of J. M. Evans and others, defendant named appeals and plaintiffs cross-appeal. Reversed in part on the cross-appeal, and decree rendered.

Decree reversed.

Wells, Stevens & Jones, for appellant.

Butler & Snow, Howie, Howie & Latham, and Robertson & Campbell, for appellees.

Argued orally by J. Morgan Stevens for appellant and George Butler and Chas. S. Campbell, for appellees.

OPINION

SMITH, C. J.

The city of Jackson and the board of education of the city of Jackson, a city administrative board, exhibited an original bill against Pittman, the Mississippi Fire Insurance Company, and others whose connection will later appear, the substantial allegations of which, in substance, are as follows:

In March, 1927, the board of education, for and on behalf of the city of Jackson, entered into a written contract with Pittman, by which he agreed to build an addition to one of the city's school buildings, furnishing all material and labor therefor, and for which he was to receive thirty-six thousand three hundred seventy-five dollars. The building was to be constructed according to the plans and specifications provided therefor, "subject to additions and deductions as provided in . . . the contract." Pittman executed a bond to the board of education in accordance with section 1, chapter 217, Laws of 1918 (section 2617, Hemingway's 1927 Code), with the Mississippi Fire Insurance Company as surety thereon.

The addition to the school was completed, and after deducting the payments made to the contractors thereon, and certain other deductions, among which is an item of damage at the rate of twenty-five dollars a day for nineteen days' delay in completing the building, such damage being stipulated for in the contract, there remained due to the contractor by the city and its board of education the sum of three thousand five hundred ninety-nine dollars and twenty-seven cents. Pittman failed to pay a number of persons, firms, and corporations, who are the other defendants to the bill hereinbefore referred to, for labor and material furnished him in the construction of the building, and notice of his failure so to do was given by them to the board of education.

The bill then avers that the balance admitted by the city and its board of education to be due the contractor is "a trust fund, to which the laborers and materialmen who did work or furnished material in and about the construction of said additions and alterations have a right to look for the payment and liquidation of their demands, along with the Mississippi Fire Insurance Company;" in other words, that said final payment and money, along with said bond, constitute a security and fund out of which said laborers and materialmen are entitled to be paid. . . . "Complainants further show that they are indifferent as between the persons furnishing material and doing work in and about the construction of said building, and as to their respective claims against said balance on hand, and as against said Mississippi Fire Insurance Company, and they here now offer to pay said sum of three thousand five hundred ninety-nine dollars and twenty-seven cents into court, when and as the court may direct."

The prayer of the bill is for process for the defendants, and "that the court enter an order directing the distribution of said fund and relieving complainants of any and all further liability in the premises." By an amendment to the bill, the complainants alleged that they had incurred an attorney's fee because of the suit, and prayed an allowance therefor.

The Mississippi Fire Insurance Company filed an answer, cross-bill and demurrer in one. The demurrer challenged the sufficiency of the bill, and the right of the complainants, particularly of the board of education, to maintain it. The issues submitted thereby will hereinafter appear.

The laborers and materialmen appeared and propounded their claims, some of which were challenged by the Mississippi Fire Insurance Company. The issues thereby presented, the decisions of which are here complained of, will appear later.

The decree of the court below adjudicates the amount due Pittman by the city, and its board of education, directs its distribution to the laborers and materialmen pro rata, and grants the laborers and materialmen a judgment against Pittman and the Mississippi Fire Insurance Company for the amount their claims exceeded their pro rata of the money to be paid by the city and its board of education. No attorney's fee was allowed complainants.

When the case came on to be heard, the demurrer of the Mississippi Fire Insurance Company was overruled. A master was then appointed to take the evidence, and to report his findings thereon to the next term of court. This he did, and the appeal is by the Mississippi Fire Insurance Company from the decree rendered on the master's report.

One of the appellant's complaints is that the case was prematurely tried, for the reason that the term of the court below, at which the demurrer was overruled and the master appointed, commenced less than thirty days after the appellant's answer was due, under section 8, chapter 151, Laws of 1924 (section 284, Hemingway's 1927 Code). The record fails to disclose that any objection on that score was interposed in the court below, and therefore any ruling the court may have made thereon is not here presented.

The right of the board of education to sue in its representative capacity was challenged both by the appellant's demurrer and answer. It will not be necessary for us to decide what power the board of education has in this connection, for the reason that it sues here only in its representative capacity, as an administrative board of the city of Jackson, and, if we should arrive at the conclusion that it could not maintain such a suit alone, the appellant here would not be benefited thereby, for the reason that the board's principal, the city of Jackson, for which it here seeks to act, is one of the complainants in the bill.

The other grounds on which the appellant predicates its demurrer to the bill are (1) that the suit is not one by the complainants on the contractor's bond, and therefore not within the provisions of section 1, chapter 217, Laws of 1918 (section 2617, Hemingway's 1927 Code); and (2) the bill is not one of strict interpleader, nor one in the nature of an interpleader, for reasons unnecessary here to set forth, and presents no other ground for the interposition of a court of equity.

The city and board of education do not seek any relief on the contractor's bond, and therefore the suit is not within the provisions of the statute referred to, which permits laborers and materialmen to intervene in a suit by the owner of a building against the contractor and the surety on his bond; but the appellees predicate no right here on that provision of the statute.

It will not be necessary for us to decide the second of these contentions, for the reason that the appellant's answer expressly admits that the money due the contractor, in the hands of the complainants, constitutes a trust fund in which the laborers and materialmen have an interest, and to which they have a right to look for the payment and liquidation of any "legitimate demand or indebtedness had or possessed by them," and "that this defendant (the Mississippi Fire Insurance Company) has an interest in said fund as surety, as alleged in the bill. . . . That it is to the interest of any parties who furnish material and perform labor in the construction of said alterations and additions, and to the interest of this defendant [the Mississippi Fire Insurance Company] to adjudicate all issues as between them or any of them in this proceeding."

The appellant's cross-bill, among other things, prays "that the right of all parties be adjudicated in this proceeding, and the right of this defendant fixed and determined, to the end that the conflicting rights of all parties to this suit be adjudicated in this one proceeding."

It is true that, while passing on a demurrer embodied in an answer under the provisions of section 12, chapter 151, Laws of 1924 (section 358, Hemingway's Code 1927), the answer should not be looked to by the trial court. Jefferson Davis County v. Berry, 152 Miss. 578, 120 So. 572. But it is also true, both under the old practice and under the present statute, that an answer may be couched in such language as to waive the overruling of a demurrer.

After overruling the demurrer, the court below had full power thereafter to set aside its order so doing and sustain the demurrer; but the admissions of the appellant, in its answer, and the prayer of its cross-bill, not only justified the court below in, but charged it with the duty of, construing such admissions and prayer as an invitation from the appellant to proceed with the trial of the case, and the appellant cannot now object thereto.

In order that the law may not be here obscured, we deem it necessary to say that the allegation in the bill, and the admission in the appellant's answer, that the balance due Pittman by the complainants is a trust fund for the benefit of the laborers and materialmen, and the implication therefrom that the fund must be administered by the complainants as such, is based, as will hereinafter...