School Dist. No. 1 of Grand Haven v. Weston

• Decision Date: 12 January 1875
• Citation: 31 Mich. 85
• Court: Michigan Supreme Court
• Parties: School District No. 1 of Grand Haven v. Eleazer P. Weston and others

31 Mich. 85

School District No. 1 of Grand Haven v. Eleazer P. Weston and others

Supreme Court of Michigan

January 12, 1875

Heard October 15, 1874 [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material]

Appeal in Chancery from Ottawa Circuit.^[+]

The bill in this case was in the nature of a bill of interpleader. It was demurred to by part of the defendants in the court below, (the circuit court for the county of Ottawa in chancery), on the ground that "complainant, in said bill of interpleader, has not shown any claim or right, title, or interest whatever in these defendants, or any of them, to the money mentioned in said bill, and has not made and stated such a case as doth or ought to entitle said complainant to the relief prayed for."

The demurrer, upon the hearing and argument, was sustained, and the bill dismissed, with costs against complainant. The complainant appeals to this court.

The case set forth in the bill is substantially this: The complainant (the school district) in April, 1870, entered into a contract with one Potter for the erection of a school-house for said district. Potter commenced the building and continued with the work for some time, drawing at various times from the building fund of the district, then in the hands of their building committee, large amounts, which he represented to be for labor and materials for said building, and continued so to draw from said fund until the committee refused to make further advances until he should have completed the building; whereupon, dissatisfaction having arisen between the parties, all matters connected with said work and contract were agreed by the parties to be referred for settlement to mutual friends chosen by them. The persons so selected by them decided and determined that Potter should from that date be discharged from any further obligation under the contract; that the district should pay thirty-three hundred dollars when the last payment mentioned in the building contract should become due; and this was then agreed upon by the parties as the amount yet unpaid and to become due from the district under the contract. And, as there were many debts and claims against Potter in favor of various persons, for work, labor and material furnished him for said building, amounting in all to over seven thousand dollars; and he having, as he admitted, appropriated large amounts of the sums already drawn by him from said building fund, to other purposes foreign from said building, and having drawn orders upon said fund, which were at the time unpaid and not accepted by the committee (though several of them were filed with the director as secretary of the committee, but subject to the order of the owners), and it being understood by said committee, and said laborers and material-men, and admitted by Potter, that he was insolvent and unable to pay said debts and claims; it was, in view of these facts, agreed between said Potter and said district, that Potter should receive no part of said balance of three thousand three hundred dollars, but that the district should pay it over pro rata to the holders of said orders, and upon such other valid claims as should be found due from Potter for labor and material furnished him for said building.

But prior to the time when, by the terms of said settlement, the said thirty-three hundred dollars was to be paid (that is, prior to the time when by the contract the last payment was to become due), Weston, Dudley and Soule (three of the defendants), holding a claim of some seventeen hundred dollars for brick furnished Potter for this building, filed a mechanic's lien against said school-house and the school-house site, and filed a petition in the circuit court for the county of Ottawa in chancery, to enforce the same for the full amount, which suit had been pending until the last term prior to the filing of this bill, when the petition, however, was dismissed.

Garnishee proceedings were also commenced in the circuit court for the county of Kent, in behalf of creditors of Potter for claims other than those contracted on account of the school-house, in which complainant was obliged to appear and defend, but which have also since been dismissed.

Immediately after said settlement, one Walter Cooper filed a mechanic's lien against said school-house and grounds, for material furnished Potter for the building for eight hundred dollars and upwards, and filed his petition in said Ottawa circuit, which is still pending.

A similar lien, in behalf of one Donker, for two hundred and fifty dollars, has been filed in the same court, and is still pending.

The creditors of Potter, whose claims originated on account of said school-house, are numerous, and their respective claims vary in amount. The bill states that complainant has ascertained the names of the following claimants, who have presented their respective claims to said building committee for payment, some of whom claim the full amount of their respective claims, others, their pro rata share (giving the names of twenty such claimants, who are made the defendants); that there are numerous other claimants, as complainant believes, whose claims are equally sacred as those named, and complainant believes their names and residences may be discovered under the order of the court.

Gouldsborough & McLouth, the bill further states, recovered a judgment against said Potter, March 3, 1873, for three hundred and seventy-six dollars and ninety-two cents damages, and thirty-seven dollars and ninety-five cents costs; have issued execution, which was returned unsatisfied, and have filed a creditor's bill against the district, making said Potter and one Rice defendants; and have obtained an injunction against the district, enjoining it against paying out any of the fund until the further order of the court, which injunction is still pending, and in full force; that complainant does not know the extent of the interest of said Rice in the fund, except by report, which is to the effect that Rice claims to hold an assignment from Potter, made after the settlement, of about two hundred and fifty dollars of said fund, but whether bona fide, complainant is not advised; that one William Baird, who, long since said settlement, purchased many of the smaller claims against Potter from mechanics who performed labor upon said building, amounting to about fifteen hundred dollars, has also recovered judgment against Potter, issued execution, which has been returned unsatisfied, and filed a creditor's bill against complainant and said Potter and Rice, and obtained an injunction enjoining complainant against making any payment from said fund until the further order of the court; that in both said creditor's bills the complainants therein seek to recover the whole amount of their claims.

The bill also alleges that others of the defendants are threatening suits at law against complainant, and unless restrained by the court, complainant fears they will bring such suits, and that complainant will be harassed and perplexed and subjected to a multiplicity of suits, with costs and expenses attendant upon the same, as well as the amounts that may be obtained in judgments in such suits; that the time for payment of said last installment on said contract has long since elapsed, and complainant has at all times been ready to carry out the terms of said settlement, and to pay each of the aforesaid claimants his pro rata share of said fund, had it not been for the pending of said several suits, which have operated as an effectual prohibition against such payments; and that complainant is now ready to comply with the terms of said settlement, whenever this can be safely done; but that it cannot safely make payment without the aid and assistance of the court.

Complainant avers that it has no interest in the fund, other than to pay it over to the proper parties entitled to the same; that by reason of the conflicting claims, some demanding payment in full, others pro rata, according to the terms of the settlement, complainant is in doubt to whom payment should be made; and submits that each of said several claimants ought to interplead and litigate their rights between themselves, under the direction of the court, and ought to be restrained from any further proceedings against complainant; offers and asks to be allowed to bring the fund into court for the benefit of such parties as may be found by the court entitled thereto; averring that complainant has in no manner aided, or colluded with any of the defendants, jointly or severally, that any of them might obtain any advantage over any of the others; that the conflict is wholly between the several defendants, and that complainant is only interested, and is anxious, that the fund should be paid over to the proper person or persons, after deducting actual costs and expenses.

Asks an answer under oath; prays that defendants may be decreed to interplead touching their several claims, and that complainant may be at liberty to bring said fund into court in trust for the persons of right entitled thereto, subject to the further order and decree of the court; that costs and expenses may be decreed to complainant out of the fund, and that the several parties (naming them) who have commenced proceedings or suits against complainant, may be enjoined from further prosecuting the same, etc., and for such further or other relief as shall be equitable.

Decree of the circuit court in chancery, sustaining the demurrer and dismissing the bill, reversed, with costs, and the case remitted to that court, with leave for the defendants to answer if they see fit.

R. W. Boynton, for complainant.

William A. Pratt, for defendants.

OPINION

Christiancy J.:

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