City of St. Louis v. O'Neil Lumber Co. , 42 Mo. App. 586 ( 1890 )

Biggs, J.

On the seventeenth day of July, 1888, the municipal assembly of the city of St. Louis passed an ordinance, authorizing the Board of Public Improvements to contract for certain alterations and repairs at the House of Refuge. Section 2 of the ordinance is as follows: “The cost of the above work shall be paid by the city of St. Louis, and , the sum of forty-five hundred dollars is hereby appropriated out of funds set apart for'improvements, alterations and repairs of the House of Refuge.” The work was let to- one James McLane, under three separate contracts. Contract, numbered 2071, provided for the erection of two new privy buildings at a cost of twenty-eight hundred dollars. By contract, numbered 2083, McLane agreed to ■make certain alterations in the basement and in the dormitory of the old building, for the sum of eight hundred and fifty dollars. The third contract, numbered 2076, provided for furnishing lumber and laying the floor in the shoe-shop 'of the House of Refuge. The foregoing contracts were signed by McLane as principal, and the interpleaders, Thos. C. Higgins and John M. Sellers, as his sureties. Among other things, the contracts provided that, “in case the contractor shall abandon the work, * * * the commissioner of public buildings shall have power, under the direction of the Board of Public Improvements, to place such and so many persons as he may deem advisable, by contract or otherwise, to work and complete the work to be done, and to use such materials as he may find ■on the line of said work, or to procure other materials for the completion of the same, and to charge the expense of said labor and materials to the contractor ; that this expense shall be deducted and paid out of such moneys as may then be due or may at any time thereafter grow due to him under the contract; and, in case such expense is less than the ■amount still due under the contract, had it been completed by the contractor, he shall be entitled to receive the difference ; and, in case such expense is greater, the party of the first part (which included the contractor and his sureties) shall pay the amount of such excess.”'

The contracts also contained the following provision: “ And said party of the first part (which includes the contractor and his sureties ) hereby further agrees that he wall furnish the said Board of Public Improvements with satisfactory evidence, that all persons, who hane done or furnished materials under this agreement and are entitled to a lien therefor under any law of the state of Missouri, have been fully paid or are no longer entitled to such lien ; and, in case such evidence be not furnished, such amount as the board may consider necessary to meet the lawful claims of the persons aforesaid, provided said persons shall notify said board before the final estimates be returned, shall be retained from the moneys due the said party of the first part' under this agreement, until the liabilities aforesaid may be fully discharged.” Under paragraph S of the contracts, an estimate of the amount of the work done each month was to be made about the first of the succeeding month, and a valuation according to the current market prices put thereon; from the amount of such estimate, ten per cent, was to be deducted, and the balance certified as due.

The obligation of Higgins and Sellers binds them with McLane to the city of St. Louis for the. faithful performance of the foregoing contracts in every particular. The foregoing quotations from the contracts, are believed to be sufficient for an understanding of the-legal propositions arising upon this record.

McLane entered upon the work and continued it until the twentieth day of. N ovember, 1888, when he-absconded from the state, leaving the work in an unfinished condition. It is conceded that, up to the first day of November, the city had paid to McLane, for work done and materials furnished under contract, numbered. 2071, the sum of thirteen hundred dollars and fifty cents. This would leave the sum of seventeen hundred and ninety-six dollars and fifty cents due from the city upon .the completion of the work. The work under contract, numbered 2083, was also left in an unfinished condition. Monthly estimates of the work under this contract had also been made, and, up to the first day of November, McLane had been paid on account thereof six hundred and seven dollars and fifty .cents, leaving a balance due from the city, if the work had been completed, of two hundred and forty-two dollars and fifty cents. The work under the third contract had been fully completed and paid for. It was also admitted that, in addition to the amounts earned by McLane under the two contracts, between the first and twentieth ©f November, the city owed him the sum of thirty-seven dollars for work done at the House of Refuge, not embraced in either contract.

When McLane abandoned the contracts, the city made an arrangement with Higgins and Sellers to complete the work. No new contract was entered into. The work was to be completed under the old .contracts. Higgins and Sellers finished the work to the satisfaction of the city authorities. A few days after this arrangement with Higgins and Sellers, the 0:Neil Lumber Company, one of the interpleaders, filed a suit in equity against McLane and the city, in which it claimed that McLane was indebted to it for lumber, furnished on account of said contracts, of the value of seven hundred and fifty dollars, and it asked that this amount be •charged against the remainder of the money due from the city under the contracts. Then followed a like suit by John M. and Edward Doyle, the appellants herein, in which they claimed to have performed work and furnished materials to McLane, under contract, numbered 2071, of the .value of thirteen hundred and four dollars. They sought to make their claim a charge upon the balance due from the city under said contract, numbered 2071. Other mechanics and materialmen followed with like suits, but, under the view which we have taken of the case, it will not be necessary to notice them. When Higgins and Sellers completed the work, they claimed that the work done and the materials furnished by them in the completion of contract, numbered 2071, actually cost them the sum of one thousand and fifty-nine dollars and eighty-nine cents ; that they did work in completing contract, numbered 2083, of the value of forty dollars ; and that they did extra work under the last-mentioned contract amounting to twenty-nine dollars and fifty cents, making a total of. eleven hundred and twenty-nine dollars and thirty-nine cents. Their contention was, and is now, that, as they had earned this amount' in the completion of the work, they were entitled to be first paid out of the balance of the funds due under the McLane contracts, in preference to the O’Neil Lumber Company and Boyle Bros.

When the city found itself beset by these conflicting claims, it brought into court the amount due from it under the McLane contracts, to-wit, twenty-one hundred and five dollars and fifty cents. The foregoing facts were stated in its petition, and the court was asked to compel the claimants to -interplead for the fund, and to restrain them from the further prosecution of the suits against the city. The necessary orders were made, and thereafter such proceedings were had in the case, as to result in a trial between the several inter-pleaders of their respective claims to priority. The court held that Higgins and Sellers must be paid first. This left a balance of nine hundred and seventy-six dollars and eleven cents, which the court found had been earned by McLane between the. first and twentieth of November. As the O’Neil Lumber Company was the first to institute suit and have the city served with process, the court gave its claim priority over those of the other interpleaders, and ordered it to be paid in full. The suit of the Doyle Bros., being the next in point of time, the remainder of the fund, to-wit, the-sum of two hundred and twenty-five dollars and sixty-two cents, was ordered to be paid to them. From this* order of distribution, Doyle Bros, have prosecuted their appeal.

The contest made by the appellants in the trial court, and which is now urged, is of a twofold character. In the first place, it is insisted that the claim of Higgins and Sellers must yield to the debts of all persons who-performed work or furnished materials in aid of the improvements under the two unfinished contracts. Secondly : As against the O’Neil Lumber Company it is-urged that, as to that portion of its debt which did not grow out of the unfinished contracts, no claim to the fund can be made until the appellants are paid; that, to. this extent, they have superior equities; that, as to-the remainder of the Lumber Company’s debt and the appellants’ demand, the equities are equal, and should be satisfied pro rata out of the fund, notwithstanding the fact, that the suit of the 0 ’Neil Lumber Company was prior in point of time to theirs. It may be well testate, in this connection, that it is conceded that the-Lumber Company furnished McLane lumber of the-value of seven hundred and fifty dollars and fifty-nine-cents, of which four hundred and ninety-five dollars ’ worth was used under the contract, numbered 2071,. twenty-two dollars and five cents’ worth under contract-,, numbered 2083, and the remainder under contract,, numbered 2076, which had been completed at the time McLane left, and ,the work thereunder fully paid for. The foregoing are the only questions in the case, and we will dispose of them in the order stated.

I. If the parties, holding claims against McLanefor work done or materials furnished, had superior-equities to Higgins and Sellers, it must result either from the institution of their suits, or by virtue of the-contracts. We must first ascertain what the inter-pleaders accomplished by bringing their suits. It is-well settled that funds belonging to an absconding debtor cannot be reached in the hands of a municipal corporation by process of garnishment under an attachment. Pendleton v. Perkins, 49 Mo. 565. On account of this defect in the legal machinery for the collection of debts, courts of equity assume jurisdiction and undertake to afford creditors that measure of relief, that is accorded to them when the money of their absent debtor is held by an individual. And it is upon this idea that an equitable proceeding of such a character is denominated an equitable attachment or garnishment. Pickens v. Dorris, 20 Mo. App. 1; Lackland v. Garesche, 56 Mo. 267. What then was the effect of the service of the several writs against the city? It would seem plain that the only effect would be to charge the amount, which was then owing by the city to McLane, with an equitable lien in favor of the respective plaintiffs according to the priority of their suits. This would, undoubtedly, be true, if the proceedings were at law by attachment and garnishment, and we cannot see how it would be different in an equitable proceeding in the nature of an attachment. Under this view, the-filing of a creditor’s bill by the appellants could not have the effect of reaching or subjecting to the payment of their debt any money not the property of McLane. 3 Pomeroy’s Eq. Jur., sec. 1415. The amount earned by Higgins and Sellers cannot be claimed as the property of McLane, and subjected to the suits of persons filing creditor’s bills, unless such result can be worked out upon the theory that Higgins and Sellers were in some way bound as sureties to the plaintiffs in the suits. We do not think that there is any provision of the contract, which gives any mechanic or materialman a right of action against the sureties. There being nothing in the contract which created any right or equity in favor of the laborers and material-men against Higgins and Sellers, it necessarily follows that their equity or right to be first paid, to the extent of the actual and reasonable cost of the work performed and materials furnished by them, is superior to-that of all the other interpleaders. We will, therefore, rule this point against the appellants.

II. We have now reached the question of difference between the appellants and the O’Neil Lumber Company. As previously stated, a portion of the company’s claim included lumber furnished under-contract, numbered 2076. The work under this contract had been completed by McLane and paid for by the city.' Therefore, the argument is made that the Lumber-Company cannot have any portion of the fund earned by McLane under the other contracts applied to this portion of its debt; that, to this extent at least, the appellants’ equities are superior.

Unless the appellants have some claim to the fund,, outside of the lien created by their suit, this argument must fail. If any such prior lien exists, it • must .grow out of, and depend upon, the contract. We are not aware of any independent equitable rule, which would displace to any extent the lien acquired by the Lumber-Company by its suit in favor of the appellants’ claim, merely from the fact that they had furnished materials- or performed labor. Nor do we know of any such rule, which would place on an equality all claims against. McLane for labor performed or materials furnished under the unfinished contract, regardless of the time-when the suits were begun. In the case of Luthey v. Woods, 6 Mo. App. 67, something was said about such “ a supposed equity,” but we do not understand that the-court in that case committed itself to any such doctrine.

When we look to the contract, we are unable to-find any provision which gives any independent equitable lien or claim to the fund in favor of laborers and materialmen. Such right was dependent upon the action of the city, and had to be worked out or asserted, if at all, by the city. If it be conceded that, under a proper construction, the contracts in question do not differ in their legal effect, in reference to the right of the city to retain sufficient' funds to pay materialmen and laborers, from the contracts in Luthey v. Woods, supra, and City v. Keane, 27 Mo. App. 642, yet the facts are essentially different. In the cases cited, the representatives of the board and the city had exercised the power conferred to set apart, for the benefit of the subcontractors and materialmen, the money due the contractor. This action on the part of these authorities was taken before the plaintiffs instituted their suits; hence the court held that the funds in the hands of the board and the city had been impressed with a trust in favor of the subcontractors and materialmen, and that the auction taken by these authorities was, in effect, an equitable assignment of the fund for the benefit of all subcontractors, materialmen and laborers in proportion to the amounts of their respective claims. In the present case we have no such state of facts. It is not pretended that the city authorities in any manner set apart, or attempted to set apart, for the payment of his subcontractors or materialmen, any portion of the money earned by McLane. We, therefore, conclude that the O’Neil Lumber Company was entitled to receive full satisfaction of its entire demand out of the amount due McLane, and that the remainder was properly ordered to be paid to the appellants.

In the appellants’ brief, the point is made that there was no attempt at the trial to show the value of the work performed by McLane between the first and the twentieth of November; that this fact was assumed by the trial court by deducting the actual cost of finishing the work from the balance due from the city under the contracts. The appellants seem to be correct in this. It is quite apparent, however, that this was not an issue in the case. It was manifestly conceded, both in the pleadings and during the trial, that the difference between the actual cost of completing the work and the total balance due under the contracts represented the sum earned by McLane. The case was tried upon the various interpleas, and the issues therein made only put in issue the amount claimed by Higgins and Sellers for finishing the job. There was no intimation that McLane had carried on the work at a loss. This action of the court could only prejudice the other interpleaders in case this was a fact. We think the case was fairly decided, and the judgment' will, therefore, be affirmed. Judge Rombauer concurs in this opinion. Judge Thompson dissents. He is of the opinion that the funds in the hands of the city, belonging to McLane, should have been distributed ratably among all the interpleaders, regardless of the time of the institution of their suits. He also thinks that this opinion, 'in the distribution of the fund, as indicated by him, is in conflict with the decision of the supreme court in the case of Rieper v. Rieper, 79 Mo. 352. The case will, '.therefore,, be certified to the supreme court.