Townsend v. The Cleveland Fire Proofing Company

• Decision Date: 22 September 1897
• Docket Number: 2,264
• Citation: 47 N.E. 707,18 Ind.App. 568
• Parties: TOWNSEND ET AL. v. THE CLEVELAND FIRE PROOFING COMPANY ET AL
• Court: Indiana Appellate Court

47 N.E. 707

18 Ind.App. 568

TOWNSEND ET AL. v. THE CLEVELAND FIRE PROOFING COMPANY ET AL

No. 2,264

Court of Appeals of Indiana

September 22, 1897

Rehearing denied December 8, 1897.

From the Marion Superior Court.

Affirmed.

George W. Spahr, for appellants.

Roscoe O. Hawkins, Horace E. Smith and John T. Lecklider, for appellees.

OPINION

WILEY, C. J.

Appellants were plaintiffs below, and sued appellees for material alleged to have been sold and furnished to appellee The Cleveland Fire Proofing Company, a subcontractor, in the construction of the Industrial School building, at Indianapolis, Indiana. The appellee, John C. Pierson, was awarded the contract for erecting said building by the board of school commissioners of said city. William L. Caldwell and Webster B. Slusser were alleged in the complaint to be partners, doing business under the firm name and style of The Cleveland Fire Proofing Company, and contracted with the appellee, John C. Pierson, for the fire proofing work in said building. Appellee, John C. Pierson, had a written contract with the board of school commissioners, and gave bond to said board, conditioned for the faithful performance of all the stipulations of his said contract. There was, also, a written contract between appellee, John C. Pierson, and Caldwell and Slusser, doing business as The Cleveland Fire Proofing Company, as subcontractors, and said Caldwell and Slusser gave to said Pierson a bond, conditioned for the faithful performance of all the stipulations of the contract on their part, and the appellee, the American Surety Company of New York became surety thereon. The other appellees, Levi S. Pierson, David W. Pierson, Moses K. Fatout, and Roger R. Shiel, were sureties on the bond of John C. Pierson. Copies of each of said contracts and bonds are filed as exhibits to the complaint. In the language of the complaint, the plaintiffs aver that "they furnished and sold to said Cleveland Fire Proofing Company, at its special instance and request, and on the good faith and credit of the contracts, bonds, and obligations hereinbefore mentioned, and set out by copy, certain material to be used in the construction of said Industrial Training School building, to the amount of three thousand, six hundred and thirty-six dollars and five cents ($ 3,636.05); that there remains due and unpaid * * * * the sum of two thousand dollars ($ 2,000.00), * * * and in so far as the defendant, The Cleveland Fire Proofing Company, is concerned, the same has been fully adjudged and determined. That the defendant, John C. Pierson, had full notice and knowledge of the fact that the plaintiffs were furnishing material which was being used and which had been used in said building, and that said defendant, John C. Pierson, notwithstanding said notice and the protests of the plaintiffs, and the demand of these plaintiffs of the said John C. Pierson for payment of their said claim, * * * * paid to said Cleveland Fire Proofing Company large sums of money, which should have been applied to the payment of plaintiffs' claim."

The appellants further aver that the Cleveland Fire Proofing Company is a corporation, organized under the laws of the state of Illinois, with its principal office in the city of Cleveland, state of Ohio. This alleged corporation was not served with process, did not appear, and, so far as the record shows, no steps were taken against it. Neither does the record show that the appellees, Levi C. and David W. Pierson, Moses K. Fatout, and Roger R. Shiel, were served with notice, and they did not appear, and no steps were taken against them. The American Surety Company and John C. Pierson each filed separate demurrers to the complaint, and based their cause of demurrer, first, that the complaint did not state facts sufficient to constitute a cause of action; and, second, that there was a defect of parties defendant, in that W. L. Caldwell and Webster B. Slusser should be joined as parties defendant. The court sustained these demurrers, and the appellants, electing to stand on the complaint, and declining to amend, judgment was pronounced against them for costs. The error assigned is the sustaining of the separate demurrers of the American Surety Company and John C. Pierson to the complaint.

It is somewhat difficult to understand the theory upon which appellants seek a recovery. If it is an action upon an account for goods and materials furnished, the complaint is bad for failure to file with it a bill of particulars as an exhibit. If, on the other hand, plaintiffs seek a recovery upon the several contracts and bonds filed as exhibits, it is difficult to tell whether they base their action upon one or all.

Taking the prayer of the complaint, we find the following: "Wherefore, plaintiffs say that each and all of the said contracts have been violated and broken, and because thereof said defendants are indebted to them," etc. We conclude, therefore, that the complaint proceeds upon the theory that there has been a breach of each and all of the contracts, and that on account of the breach, each and all of the defendants are liable. It is clearly the law that appellants have neither an equitable or statutory lien for the materials furnished by them to the Cleveland Fire Proofing Company, and which it is alleged were used in the construction of the building. It is the settled law in this State that mechanic's liens can neither be acquired nor enforced upon or against property held for public uses. Fatout v. Board, etc., 102 Ind. 223, 1 N.E. 389, and cases there cited. It seems to us that, as there can be no statutory lien, it necessarily follows that there can be no equitable lien, for it is the policy of the law that public buildings, used for public purposes, cannot be burdened with liens the enforcement of which would divest the public of their rights in them.

Turning to appellants' brief, we find the following: "It would seem that a mere statement of the facts in this case would satisfy any one of the rights of the appellants to recover from Mr. Pierson and his bondsmen, and from the Cleveland Fire Proofing Company and its bondsmen--the right of appellants to be subrogated to the rights of the school board and of Mr. John C. Pierson." From this quotation we must conclude that appellants are proceeding upon the theory that, under the facts stated in the complaint, they are entitled to be subrogated to the rights of the board of school commissioners and John C. Pierson under the several contracts mentioned. While there is no prayer in the complaint for subrogation, nor sufficient facts alleged to entitle appellants to subrogation, yet we feel at liberty to adopt the theory of the case that appellants have assumed and argued in their brief. Having invoked the doctrine of subrogation, and that being the theory upon which the appellants proceed, they must prevail upon that theory or not at all. It seems to us that the doctrine of subrogation is not in any sense applicable here, and a mere statement of that doctrine is amply sufficient to support the assertion. "Subrogation is the substitution of another person in the place of a creditor or claimant, to whose rights he succeeds in relation to the debt or claim asserted, which had been paid by him not voluntarily, and contemplates some original privilege on the part of him to whose place substitution is claimed." 24 Am. and Eng. Ency. of Law, page 187.

Another and pointed definition we find in Anderson's Law Dictionary, page 984, as follows: "The substitution of a new for an old creditor; more generally, the act of putting, by transfer, a person in the place of another, or a thing in the place of another thing."

"When one has been compelled to pay a debt which ought to have been paid by another, he is entitled to a cession of all the remedies which the creditor possessed against that other." McCormick v. Irwin, 35 Pa. 111.

Mr. Sheldon, in his work on subrogation, thus defines it: "It is a substitution, ordinarily the substitution of another person in the place of one creditor, so that the person in whose favor it is exercised succeeds to the rights of the creditor in relation to the debt. More broadly, it is the substitution of one person in the place of another, whether as a creditor or as the possessor of any other rightful claim. The substitute is put in all respects in the place of the party to whose rights he is subrogated." Sheldon on Subrogation, pp. 1, 2.

There seems to be no conflict in the authorities as to when and under what conditions the doctrine of subrogation is applicable, and who are entitled to invoke it. Briefly, it may be stated, that subrogation takes place as follows: (1) For the benefit of insurers; (2) for a surety who pays the debt of his principal; (3) for one co-surety against another co-surety to compel contribution; (4) for a purchaser who extinguishes an incumbrance on an estate purchased; (5) for a creditor who satisfies a lien for a prior creditor; (6) for an heir who pays the debt of the succession; (7) for one who has paid his own debt, which, for a valuable consideration, was assumed by another but not paid. Sheldon on Subrogation, p. 4, section 3, and authorities there cited. See, also, 24 Am. and Eng. Ency. of Law, chapter on "Subrogation."

Mr. Sheldon further says: "There will be no subrogation unless the payment was made either under compulsion, or for the protection of some interest of the party making the payment, in discharge of an existing liability." Sheldon on Subrogation, p. 4, section 3.

We are unable to comprehend upon what principle or theory appellants are entitled to be subrogated to the rights of the board of school commissioners or John C. Pierson, under the contracts set out in their...