Oliver Const. Co. v. Crawford

• Decision Date: 19 April 1926
• Docket Number: 25592
• Citation: 142 Miss. 490,107 So. 877
• Court: Mississippi Supreme Court
• Parties: OLIVER CONST. CO. v. CRAWFORD. [*]

107 So. 877

142 Miss. 490

OLIVER CONST. CO. v. CRAWFORD. ^[*]

No. 25592

Supreme Court of Mississippi

April 19, 1926

Division B

1 COUNTIES. Usual and proper practice in giving notices required under statute of final settlement as to public contract or determination of abandonment thereof is for board of supervisors to enter order on its minutes, and for clerk either to sign notice published, or to certify that order is true and correct copy of minutes of board of supervisors (Laws 1918, chapter 217, section 3).

Under section 3, chapter 217, Laws of 1918, the usual and proper practice in giving the notices required thereunder is for the board of supervisors to enter an order upon its minutes, and for the clerk to either sign the notice published or to certify that the order is a true and correct copy of the minutes of the board of supervisors. Whether an order of the board in such cases published in a newspaper as entered on the minutes of the board without the signature of the president or clerk of the board is sufficient to comply with the statute, query?

2 HIGHWAYS. Statute making contractor's bond liable to all persons supplying labor or material for construction of certain work does not make contractor's bond liable for money loaned to subcontractor which is used in paying for material and labor; while statute making contractor's bond liable to all persons supplying labor or material for certain construction work will receive liberal interpretation, it will not be extended beyond the clear meaning of its terms (Laws 1918, chapter 217, section 1).

Section 1, chapter 217, Laws of 1918, making a contractor's bond liable to all persons supplying labor or material for the construction work contracted for, does not make the contractor's bond liable for money loaned to a subcontractor which is used in paying for material or labor. While the statute will receive a liberal interpretation, it will not be extended beyond the clear meaning of the terms used by the legislature.

HON. T E. PEGRAM, Judge.

APPEAL from circuit court of Benton county, HON. T. E. PEGRAM Judge.

Action by J. Walter Crawford against the Oliver Construction Company on a contractor's bond. Judgment for plaintiff, and defendant appeals. Reversed and judgment rendered.

Judgment reversed.

Wm. M. Hall, for appellant.

I. Crawford's suit was barred and the court below erred in holding otherwise. The publication of notice in this case was completed October 26, 1922, and the suit was not brought until March 30, 1925, two years, five months and four days thereafter. So if the order published was notice within the meaning of the statute, Crawford's suit was barred.

It will be noted that the statute does not prescribe any form of notice; that it does not even say notice to furnishers, which would imply that it was to be addressed to them. It simply says "notice thereof," the word "thereof" referring to the obligee's final settlement, set forth in the preceding sentence. Getting the fact of final settlement by the obligee published appears to be the prime contemplation of the statute.

The real obligee in the bond here was the board of supervisors of Benton county. The board of supervisors can act only by and through orders entered upon their minutes. Why then would not publication of the board's order itself, if the essential facts be recited therein, be more nearly the obligee's publication of notice of final settlement than anything else? I can think of no reason why it would not.

II. The court below was mistaken about the effect of Oliver Construction Co. v. Dancy, 137 Miss. 474, 102 So. 568, in his ruling that these appellants were liable for Crawford's claims under the terms of the statute or their bond. The supreme court did not commit itself in the Dancy case to the proposition that merchandise, such as boots, shoes, clothes, groceries, cigars and tobacco, and the like, sold to a subcontractor or his employees on his orders, were materials or labor within the meaning of the statute and statutory bond which the principal contractor and his surety would be liable for. If it had, it would not have decided as it did in Watkins v. U. S. Fidelity & Guaranty Co., 103 So. 224. The claim of Elixson in that case was for shoes sold to laborers on orders issued by the contractors and it was held to be not within the bond.

The bond given by the Oliver Construction Company in compliance with the statute when it undertook to construct this highway work was no broader than the statute. The obligation is for material and labor furnished for the work and used in the work.

Material and labor furnished to a subcontractor for the work, this court held in Oliver Const. Co. v. Dancy, 137 Miss. 474, 102 So. 568, the principal contractor and his surety would be liable to the furnisher for.

Crawford's furnishing was to subcontractors, Lansdale & Acumen. The question is whether the things he furnished were material or labor for the work within the meaning of the statute and bond. Neither statute nor bond refers to the furnishing of money for the work as each does to the furnishing of material and labor for the work. Our roads are not paved with dollars, though some of the taxpayers may be thinking they are, judging from the cost of some of them. Where the money is simply furnished to the contractor to pay off claims for material or labor and he pays them off, there is an extinguishment of the claims and rights, and equity has no basis to create an assignment.

The courts, with practical unanimity, have held that money furnished for and merely used to pay labor and material bills cannot be considered labor or material. See the notes in 43 L. R. A. (N. S.) 162, 171; and in Ann. Cas. 1918 D, 350, 352, for collation of the cases. See the cases later than those notes. Neodesha Nat'l Bank v. Russell (1921), 109 Kan. 564, 200 P. 281; U. S. F. & G. Co. v. Henderson (Tex. Civ. App. 1923), 252 S.W. 835, 842; People Western Acceptance Co. v. Southern Surety Co. (Colo. 1924), 230 P. 397; New Amsterdam Casualty Co. v. State (Md., 1925), 128 A. 641.

The cases cited involve, in the main, claims against the surety of the principal contractor for material or labor furnished to the principal contractor himself, but they apply with equal force in the case of claims against the principal contractor primarily and his surety secondarily for material furnished to the contractor, because the principal contractor is necessarily in such a case in the attitude of a surety with reference to furnishers' claims against the sub-contractor.

In this case, among the items for merchandise listed, there are none coming within the category of material furnished for and used in the work. Shovels, for which the largest charge is made, are considered by all of the courts as equipment which is not covered. The other things, which are insignificant, are not within the category of material. See Watkins v. U. S. F. & G. Co., 103 So. 224; Carter County v. Oliver Hill, 143 Tenn. 648, 662; Southern Con. Co. v. Halliburton (Tenn.), 258 S.W. 409, 9 Am. & Eng. Ann. Cas. 309, 43 L. R. A. (N. S.) 165, L. R. A. 1915F 951. This claim of Crawford's was also not within the protection of appellant's bond.

If a principal contractor is held liable for moneys advanced and merchandise sold on open account to a subcontractor, the principal contractor and his surety would be open to every sort of imposition.

Lester G. Fant, for appellee.

The first proposition argued was that the suit of J. S. Crawford was barred by the statute of limitations. Of course, unless barred by chapter 217, Laws of 1918, it was not barred at all. And the record shows beyond any doubt that there was no notice published, signed either by the board of supervisors of Benton county or its clerk, or the state highway commissioner. Section 1640, Hemingway's Code (section 1980, Code of 1906) covers proof of publication of notices. It is sufficient to say that no affidavit was made by any publisher that any notice was given.

The only other contention is that the court below was mistaken about the effect of Oliver Con. Co. v. Dancy, 137 Miss. 474. Counsel for appellant overlooks in his argument that it is undenied in the record of the present case that each dime of the account of J. W. Crawford, upon which the suit is based, went absolutely into the construction of the road, for the construction of which bond was given.

This case has been finally settled by Dancy et al. v. Oliver Con. Co., 137 Miss. 474. In that suit E. J. Crawford was decreed three hundred five dollars and fifty-five cents, J. D. Dickerson one hundred eighteen dollars and fifty-nine cents, and J. H. Gresham one hundred twenty-one dollars and forty-two cents. These claims were absolutely made up in the same way as the Crawford claim and while the complaint was made by appellant in that case, it was because neither Mr. Crawford, nor Mr. Dickerson nor Mr. Gresham did anything toward constructing the road. What they did was to furnish pay for the labor by giving them board on the orders of Lansdale & Acumen, just as the account of J. W. Crawford is made up of money not only furnished to the labor on the order of Lansdale & Acumen and taken by Lansdale & Acumen out of the pay due the said laborer, but it is also for freight and for gravel.

I submit, too, that Watkins v. U. S. F. & G. Co., 138 Miss. 388, does not conflict with Dancy v. Oliver Con. Co., supra.

There is no particular manner in which the law provides that labor shall be furnished. Labor might be furnished by paying them either in money, or in board, or in shirts, in cigars, or in any other way that they should be paid. In order to pay the labor, they are not required to pay them any particular kind of money, or any...