Feed Milling Co. v. U.S. Fid. G. Co. , 145 Miss. 599 ( 1926 )

^* Corpus Juris-Cyc. References: Appeal and Error, 4CJ, p. 795, n. 94; Highways, 29CJ, p. 612, n. 49; p. 613, n. 75; Pleading, 31Cyc, p. 745, n. 20; p. 747, n. 32; p. 749, n. 34. Waiver of demurrer by filing other pleadings, see 21 R.C.L. 622; 6 R.C.L. Supp. 1276. As to whether change of principals to obligation is discharge of surety, see annotation in 10 L.R.A. (N.S.) 1160; 21 R.C.L. 1061; 3 R.C.L. Supp. 1213; 6 R.C.L. Supp. 1298. This is a suit by the appellant, under chapter 217, Laws of 1918, on a bond on which the United States Fidelity Guaranty Company is surety, for the performance of a contract entered into by B.H. Bass Co. with the highway commissioners of Warren county, for the construction of a public highway.

The original declaration alleges that, after the execution of this contract and bond, B.H. Bass "became the sole owner of the partnership of B.H. Bass Co.," and purchased certain material from the appellants, and used the same in "carrying out his contract . . . with the highway commissioners of Warren county." The exhibits to the declaration disclose that the partnership of B.H. Bass Co. was composed of B.H. Bass, S.J. Smith, and J.G. Brister, none of whom were made parties defendant in the original declaration; the surety company being the sole defendant therein.

A demurrer was interposed to this declaration by the surety company, the ground of which is that the declaration is defective in that the persons with whom the contract for the construction of the highway was made were not made parties defendant thereto. A motion to strike this demurrer from the record was overruled, and the demurrer was then sustained. Whereupon the appellant filed an amended declaration, bringing forward therein all the allegations of the original declaration, and adding Bass, Smith, and Brister as parties defendant thereto. A joint demurrer to the amended declaration was then filed by Brister and Smith, and a separate demurrer thereto was filed by the surety company. Bass filed a plea of general issue. Both of these demurrers were sustained, and, the appellant declining to plead further as to Brister, Smith, and the surety company, the case was dismissed as to them, and continued as to Bass. From this judgment the appellant has brought the case to this court.

The grounds of the appellant's motion to strike the demurrer to the original declaration from the record, and on which it also contends that the court below erred in sustaining the demurrer, is that the nonjoinder of a party in an action upon a contract should not be raised by demurrer, but by notice thereof, filed by the defendant with his plea, citing section 723, Code of 1906 (section 506, Hemingway's Code).

Any error which the court below may have committed in overruling the motion and sustaining the demurrer, is not here presented for decision, for any error therein was waived by the filing of the amended declaration. The nonjoinder here complained of, if such there was, was not jurisdictional, and unless "the ground of demurrer is the want of jurisdiction of the subject-matter or the failure of the complaint to state a cause of action" (31 Cyc. 749), "objection to the sustaining of a demurrer is waived by the party against whom the demurrer is filed, . . . filing an amended or substituted pleading in place of the one held bad on demurrer" (31 Cyc. 744; 6 Enc. Pl. Pr. 359).

The question presented by the surety company's demurrer to the amended declaration, as stated in the brief of its counsel, is as follows:

"Whether or not there is a material change in the obligation assumed — whether or not a surety who guarantees a firm composed of a number of individuals, can be held liable where there is a change in the firm, where the firm is dissolved without notice to the surety, and where a sole remaining member of the old firm, independently, not in the old firm name, incurs an obligation."

The record does not disclose that the highway commissioners of Warren county released Smith and Brister from their obligation to construct the highway; consequently, we are not confronted with what the rights of the surety company would be had Smith and Brister been so released.

In the language of the Supreme Court of the United States inIllinois Surety Co. v. John Davis Co., 244 U.S. 376, 37 S.Ct. 614, 61 L.Ed. 1206:

"The purpose of the act was to provide security for the payment of all persons who provide labor or material on public work. This was done by giving a claim under the bond in lieu of the lien upon land and buildings customary where property is owned by private persons. . . . The statute and bonds given under it must be construed liberally, in order to effectuate the purpose of" the legislature as declared in the act.

The bond recites that the principals therein "shall pay . . . all persons furnishing said principals with materials and labor in the course of the performance of said work," and the obligation imposed by the statute is that "the contractor shall promptly make payments to all persons supplying labor or material for the work contemplated by the contract;" hence, the bond protects persons furnishing labor and material for the performance of the contract, whether furnished directly to the contractor, or to another who performs the work of the contract for him. U.S. use of Hill v. American Surety Co.,200 U.S. 197, 26 S.Ct. 168, 50 L.Ed. 437; Mankin v. U.S. 215 U.S. 533, 30 S.Ct. 774, 54 L.Ed. 315. Compare U.S.F. G. Co. v. BurtonLumber Co. (Tex. Civ. App.), 221 S.W. 699; Los Angeles StoneCo. v. National Surety Co., 178 Cal. 247, 173 P. 79;Kaufmann v. Cooper, 46 Neb. 644, 65 N.W. 796.

Under the allegations of the declaration, the performance of the contract by Bass was pursuant to his and his copartners' obligation so to do.

We are relieved from deciding whether Smith and Brister are liable to the appellant, for the reason that its counsel have admitted their nonliability, and have requested this court to affirm the court below in so holding.

The judgment of the court below will be affirmed as to Smith and Brister, but will be reversed as to the surety company.

Affirmed in part, and reversed in part.

ON SUGGESTION OF ERROR. The judgment of the court below was reversed in part on a former day of this term, and counsel for the appellee now suggests that we erred in so doing. They reargue all the questions hereinbefore decided and one other, which is set forth in the suggestion of error as follows:

"The record shows affirmatively that there was no publication as required by section 6, chapter 217, page 268, Laws of 1918. Consequently, neither the trial court nor this court had jurisdiction of the subject-matter, and it was the duty of the court to take notice of this at any time, when its attention was called to it, or of its own motion, the fact being apparent from the face of the record and proceedings."

No reference was made to this question in the briefs of counsel on the former hearing, but it was referred to in the oral argument. We are not here called upon to decide whether or not a ground that might be urged for affirming a judgment appealed from is waived, when the brief of the appellee contains no reference thereto; but that a ground for the reversal of a judgment is waived when the brief of the appellant contains no reference thereto was expressly decided in N.M. C.R.R. Co. v. State,110 Miss. 290, 70 So. 355, and McClabeb v. McCaleb, 110 Miss. 486, 70 So. 563. It will be sufficient to say here that it is obviously somewhat dangerous to rely on points made in an oral argument that are not referred to in the brief, for they might be overlooked by the court in deciding the case. One of the reasons for the adoption of subsection 2 of rule 7 of this court,104 Miss. 905, was to avoid just what has occurred here.

The provision of section 6, chapter 217, Laws of 1918, here called to the attention of the court, is as follows:

"In all suits instituted under the provisions of this act, notice of the pendency of such suits shall be made by publication in some newspaper of general circulation published in the county or town where the contract is being performed, if there be such paper; otherwise, in a paper having a general circulation therein, for at least three weeks, the last publication to be at least one week before the trial of said cause."

The record contains no copy of the publication required by this statute, but it does not appear therefrom that such publication was not made, unless, as couns for the appellee say, "this court must assume that the record in the case is a complete record, and that it contains a copy of all things done in the trial court." No such assumption can be here made, for the reason that rule No. 2 of this court, 104 Miss. 904, provides that:

"A transcript shall not contain any part of the case except the pleadings, evidence, instructions, bill of exceptions and the order, judgment or decree appealed from, unless the appellant shall, by writing, request others matters specified to be embraced in the transcript; . . . and no fee shall be allowed for anything besides those matters required to be embraced in the transcript."

We must presume that the clerk below complied with this rule; but, had the record been made to affirmatively disclose that no such publication was made, the result here would be the same. The sufficiency of a declaration in a case based on the statute is in no wise dependent upon the publication of this notice, for the publication cannot be made until after the declaration has been filed, is then to be made by the clerk, and, should he fail to do so, the only result would be that no judgment could be rendered for the plaintiff until the publication has been made. The publication is for the purpose of notifying all parties who may have claims against the contractor and his bondsmen similar to that of the plaintiff of the pendency of the suit, so that they may take the necessary steps to protect their interests if they so desire. United States Fidelity Guaranty Co. v. Mobley,143 Miss. 512, 108 So. 501.

Overruled.