Missouri State Highway Commission Ex Rel. Licking State Bank v. Coopers Construction Co.

^* Corpus Juris-Cyc References: Appeal and Error, 3CJ, p. 796, n. 81; Assignments, 5CJ, p. 906, n. 97; Highways, 29CJ, p. 611 n. 39; p. 612, n. 55 New; Pleading, 31Cyc, p. 723, n. 92. This is an action on a road contractor's bond. The cause was tried before the court without the aid of a jury, and judgment went for relator and defendants appealed.

We shall refer to relator, the Licking State Bank, as plaintiff. Defendant Coopers Construction Service Company contracted with the state highway commission to do certain road construction on highway No. 7 in Texas County. The construction company gave bond as required by section 1040, Revised Statutes 1919, with defendant indemnity company as surety. The construction company sublet a certain portion of the work to one Claud Johnson. The subcontractor Johnson became indebted for labor upon the road in the sum of $464.27, and to secure this amount advanced by plaintiff bank he assigned to the bank his claim against the construction company. As assignee of the claim of the subcontractor plaintiff bank seeks in this cause to recover on the bond of the original contractor.

Error is assigned on the refusal of an instruction in the nature of a demurrer at the close of the case.

First, it is contended that plaintiff failed to prove the cause alleged in the petition. It is contended that the petition is based upon an alleged assignment of the laborers upon the road to plaintiff bank, while the proof showed an assignment from the subcontractor and not from the laborers. The petition would perhaps be construed as defendants contend, but the evidence that the assignment was from the subcontractor went in without objection. Plaintiff alleges that Johnson employed many laborers who performed work upon the road; that Johnson and the construction company became indebted to these laborers in the sum of $464.27, and that at the instance of Johnson and the defendant construction company plaintiff advanced said amount to pay the claims of the laborers. Then plaintiff alleges that "said claims were duly assigned . . . to relator."

When no objection is made to the introduction of evidence the petition should be considered as amended to conform to the evidence. [Ehrlich v. Mittelberg, 299 Mo. 284, 252 S.W. 671; State ex inf. v. Gromer, 252 S.W. (Mo. Sup.) 705, l.c. 707; The Treece State Bank v. Wade et al., 283 S.W. (Mo. App.) 714.] Plaintiff without objection introduced a written assignment which shows on its face to be from the subcontractor and not from the individual laborers. In this situation there is no room for complaint on the ground of variance.

It is also contended that the assignment is void because it specified no certain amount. The assignment recites that the consideration therefor is "money already advanced." The assignment was made July 19, 1924, and prior thereto plaintiff bank had advanced to the subcontractor $464.27 which amount went to pay for the actual labor performed upon the road. The reference in the assignment to money already advanced and the existence in the bank of a record of the amount advanced taken together make it definite as to the amount assigned.

The question of moment is: Can the subcontractor assign his account or demand against the principal contractor and by the assignment confer upon the assignee the right to maintain an action upon the contractor's bond required by section 1040, Revised Statute 1919, referred to supra? Section 1041, Revised Statutes 1919, specifies who may sue upon the bond required by section 1040. The statute provides that "every person furnishing material or performing labor, either as individual or as subcontractor" shall have the right to sue upon the bond. Thus we see that the subcontractor is by the statute specifically empowered to maintain a suit upon the bond. The statute contemplates that the bond shall be made to the State. The bond in the cause here was made to the Missouri State Highway Commission. But notwithstanding this the bond is a good common-law bond, and being conditioned as required by the statute, the subcontractor could maintain an action thereon although it runs to the highway commission instead of the State. [Geller, Ward Hasner Hardware Company v. Trust Company, 234 S.W. (Mo. App.) 1019.]

But there is no authority in the statute for a suit on the bond by the assignee of a subcontractor, and if such right exists it must be found elsewhere then in the statute. In Erath Flynn v. Allen Son et al., 55 Mo. App. 107, a Nebraska statute, similar in purpose to our statute, section 1041, was involved. There the suit was sought to be maintained by a subcontractor, but it was held that since the Nebraska statute did not authorize a suit by a subcontractor such suit could not be maintained. In making disposition of the case the court used this language: "And even though the plaintiffs (the subcontractors) paid off the laborers and mechanics employed by them in executing their subcontract, there is no principle upon which they can be subrogated to the rights of such laborers and mechanics. The statute conferred a mere personal privilege or right upon them, which was in no sense assignable." The court was there considering a Nebraska statute, but the principle controlling there is applicable here, and that principle is that the benefits and advantages conferred by this character of statute are personal in their nature and cannot be invoked by any one not named in the statute.

As supporting the principle that the Nebraska statute conferred a mere personal privilege which was not assignable the court in Erath Flynn v. Allen Son et al., supra, cited Griswold v. Railroad, 18 Mo. App. 52, and Brown v. Railroad, 36 Mo. App. 458. In these cases it was held that the lien given by section 3200, Revised Statutes 1879, now section 7261, Revised Statutes 1919, concerning certain railroad work, was personal in nature and nonassignable. [See, also, O'Connor v. Railroad, 111 Mo. 185, 20 S.W. 16.] The same rule was applied to a mechanic's lien prior to legislation on the subject. Such lien is personal in nature and was nonassignable prior to authorization by the Legislature which legislation we mention more fully, infra. [Ray County Savings Bank v. Cramer, 54 Mo. App. 587; Benham v. Banker-Edwards Building Company, 60 Mo. App. 34; Ittner v. Hughes, 154 Mo. 55, 55 S.W. 267.] In 1889, by section 6758, Revised Statutes 1889, partial assignment of a mechanic's lien was provided for. This remained the only provision until 1909 when complete right to assign was conferred by statute. [Laws 1909, p. 661, now sec. 7285, R.S. 1919.] By the Act of 1909, applicable to all liens mentioned in chapter 61, Revised Statutes 1919, it is provided that: "Any person or persons having claims for which they are entitled to liens may assign to any other person or persons all their right, title and interest in and to such claims, and the assignee thereof may file a lien or liens therefor, as provided . . . and may bring suit in his own name and include in such suit all claims assigned to him, and enforce such assigned lien or liens as fully as if such claims had been filed by the original claimant."

In many instances a lien is unavailable because of the public nature of the building or thing or place where the labor is performed. Section 1040 comes to the relief of the laborer and subcontractor in such case and in a way the bond there required takes the place of the lien right in other cases. The right to sue upon the bond where a lien will not be allowed is analogous to the right to file and enforce the lien in cases where such lien is allowed. The right to file and enforce a mechanic's lien was not assignable until made so by statute. The statute, section 1041, does not authorize the assignee of a subcontractor to sue upon the bond required by section 1040. There being no statutory provision empowering the assignee of a subcontractor to maintain such suit we hold that such suit cannot be maintained by such assignee. It seems to us that this ruling is inevitable unless we ignore the very analogous rulings respecting the assignment of mechanics' lien accounts prior to the legislation on that subject above referred to.

It follows from our ruling respecting the right of an assignee of a subcontractor to maintain a suit on the bond required by section 1040 that the judgment should be reversed and it is so ordered. Cox, P.J., and Bailey, J., concur.