Standard Oil Co. v. National Surety Co.

• Decision Date: 29 March 1926
• Docket Number: 25523
• Citation: 143 Miss. 841,107 So. 559
• Court: Mississippi Supreme Court
• Parties: STANDARD OIL CO. v. NATIONAL SURETY CO. et al. [*]

107 So. 559

143 Miss. 841

STANDARD OIL CO. v. NATIONAL SURETY CO. et al. ^[*]

No. 25523

Supreme Court of Mississippi

March 29, 1926

Division A

1. MUNICIPAL CORPORATIONS. "Political subdivision of state" is subdivision to which has been delegated certain functions of local government.

A "political subdivision" of a state is a subdivision thereof to which has been delegated certain functions of local government.

2 DRAINS. Drainage districts, vested with certain necessary governmental powers, are political subdivision of state.

Drainage districts that are created for the purpose of draining and reclaiming wet and overflowed lands, and of conserving the public health and convenience, for the accomplishment of which they are vested with the necessary governmental powers are political subdivisions of the state which created them.

3 DRAINS. Provision that public contractor will promptly pay all persons supplying him labor or material need not be set forth in his bond, but such provision in contract is sufficient if bond is conditioned that contractor shall perform all matters and things contained, set out, or referred to in contract (Laws 1918, chapter 217, sections 1 3).

The provision of section 1, chapter 217, Laws of 1918, which requires a person entering into a contract with the state, etc., for the construction of any building or work to execute the usual bond with good and sufficient sureties, which the additional obligation that such contractor shall promptly make payment to all persons supplying labor or material therefor, does not require this additional obligation to be set forth in the bond, but a provision therefor in the contract is sufficient when the condition of the bond is that the contractor shall well and truly perform all the matters and things contained, set out, or referred to in the contract.

4. LIMITATION OF ACTIONS. One demurring and wishing to set up statute of limitation as ground thereof should assign such statute in demurrer as one of grounds (Code 1906, section 754 [Hemingway's Code, section 537]).

In a case wherein the statute of limitation can and is sought to be availed of by demurrer, it must be assigned in the demurrer as one of the grounds therefor.

5. DRAINS. Oil and gasoline furnished contractor for use in operating his machinery and digging canals and ditches for drainage district are "materials used in prosecution of work," within statute relating to contractor's bond (Laws 1918, chapter 217, section 1).

Oil and gasoline furnished a contractor for use in operating machinery used by him in digging canals and ditches for a drainage district are "materials" used in the prosecution of the work within the meaning of section 1, chapter 217, Laws of 1918.

HON. W. A. ALCORN, JR., Judge.

APPEAL from circuit court of Quitman county, HON. W. A. ALCORN, JR., Judge.

Suit by the Standard Oil Company against the National Surety Company and another on a contractor's bond. From a judgment sustaining a separate demurrer to the declaration by each of the defendants, plaintiff appeals. Reversed and remanded.

Reversed and remanded.

Wells, Stevens & Jones, G. G. Lyell and Boone, Lowery, & Boone, for appellant.

A. The demurrer of Clark-Hunt Contracting Company. The first ground of the demurrer filed by Clark-Hunt Contracting Company reads as follows: "Because it appears that this suit is a suit brought to charge the said defendants jointly with their co-defendant, National Surety Company, for certain obligations and debts, and it affirmatively appears that no joint obligation exists as against the said defendants, and the said National Surety Company, their said co-defendant."

The court after sustaining the demurrer of the National Surety Company on the sixth ground of its demurrer, sustained the demurrer of the Clark-Hunt Contracting Company on its first ground because the court conceived the law as being that if two persons are sued jointly and severally and the suit fails as to one, it must fail as to the other. In short, the court took the position that if a suit against the principal obligor on his bond and his surety on said bond fails as to the surety, there can be no recovery against the principal obligor, which we are free to confess is a new theory of law to us.

We regard the decision of the court on this proposition as being so palpably erroneous as to require no argument other than a statement thereof. There are many cases where for one reason or another a surety is released while the principal obligor is always held and it makes no difference that the surety cannot be held in this case, if the court should reach that conclusion; for the declaration charges and the demurrer admits that the Clark-Hunt Contracting Company ordered the goods from appellant, received and used them, and has not paid for them and the mere fact, as the lower court saw it, that appellant is undertaking to hold the Clark-Hunt Contracting Company and its surety jointly and severally liable for these items does not in any wise release the liability of the Clark-Hunt Contracting Company under the facts alleged in the declaration, even though the surety ultimately be absolved from any liability therefor and even though they have both been sued therefor in the same declaration.

As a plain matter of law, the suit was properly brought against the Clark-Hunt Contracting Company and its surety, for under section 2910; Hemingway's Code, the National Surety Company, if it had been sued alone, would have been required to have given notice of the suit to the Clark-Hunt Contracting Company.

Furthermore, if the Clark-Hunt Contracting Company, or the National Surety Company for that matter, felt that there was a misjoinder of defendants, it could not be reached by demurrer and could have been reached only by a plea of misjoinder under the express provisions of section 506, Hemingway's Code. For the application of this section, see Aven v. Singleton et al., 132 Miss. 256, 96 So. 165.

Even if we concede the relationship of principal and surety does not create a strictly joint and several obligation, it cannot be questioned that it is proper to sue the principal and surety in the same suit in cases arising out of the breach of the conditions of a bond. See Davis v. Hoopes, 33 Miss. 173; Horne v. Tartt, 76 Miss. 304; Gillespie v. Hauenstein, 72 Miss. 838; 32. Cyc. 125, par. 4.

Moreover, the obligation here sued on is joint and several by the express provisions of the bond itself, and also by the express provisions of sections 2169 and 2170, Hemingway's Code.

It cannot be sound law in this age that where one sues his debtor and his debtor's surety, jointly or severally, as is the case here, that he cannot recover from his debtor even though he fails to recover against the surety. In the language of Justice MITCHELL in Philadelphia v. Stewart, 195 Pa. 309, 45 A. 1056, we say that such a contention is "as bare of legal as it is of moral merit."

B. The demurrer of the National Surety Company. The demurrer of the National Surety Company was sustained on its sixth ground which reads as follows: "Because it appears that the said plaintiff has not supplied any materials for or about the construction of any building or work, or the doing of any repairs in or about any building or work done, or attempted to be done, or proper to be done, by the said Pompey Lake Drainage District."

The demurrer brings before this court for decision for the first time the question of whether or not oils, greases and gasoline and other material, such as were sold to and used by the Clark-Hunt Contracting Company in operating the dredges on the work under its contract with the drainage district, constitute materials used in the prosecution of the work within the meaning of chapter 217, Laws of 1918. See Watkins v. U. S. F. & G. Co., 103 So. 224. The following additional cases demonstrate the error of the lower court on this point.

Claims for patterns furnished to the molding department of the builder of a vessel for the United States are within the obligation of the latter's bond executed conformably to a statute providing that it shall be conditioned for the payment of those furnishing labor and materials in the prosecution of the work. Title Guaranty & T. Co. v. Crane Co., 219 U.S. 24, 55 L.Ed. 72, 31 S.Ct. 140, affirming 89 C. C. A. 618, 163 F. 168.

And lumber furnished to a contractor for the erection of a public bridge, to be used by him for false work in the course of the work, is embraced by his bond, which is conditioned for the payment of all claims for labor and materials furnished for the work. Empire State Surety Co. v. Des Moines, 152 Iowa 531.

It is held that coal furnished a contractor and used for generating power in the course of the work is embraced by the bond of a contractor for public improvement, executed in pursuance of statute, and conditioned for the payment of all materials used and services rendered in the execution of the contract. Zipp v. Fidelity & D. Co., 73 A.D. 20, 76 N.Y.S. 386.

And coal so used is material within the meaning of his statutory bond to the United States, so as to support an action thereon in favor of the person furnishing it. City Trust, S.D. & Surety Co. v. U.S. 77 C. C. A. 397, 147 F. 115, disapproving United States to Use of Standard Oil Company v. City Trust, S.D. & Surety Co., 21 App. D. C. 369, and United States to Use of Chapman v. City Trust, S.D. & Surety Co., 23 App. D. C. 153. See, also, National Surety Co. v. Bratnober Lumber Co., 6,7 Wash. 601, 122 P. 337; George H. Simpson Co. v. Com., 202 Mass. 326, 88, N.E. 911; E. I. Dupont Denemours Powder Co. v. Culgin-Pace Contracting Co., 206 Mass. 586, 92 N.E. 1023; Kansas City to Use of Kansas Hydraulic Press Brick...