Opinion
No. 31983.
September 28, 1936.
HIGHWAYS.
Suit against highway contractor and his surety by subcontractors and persons who furnished materials, supplies, and labor in construction of highway held not to lie before notice of final settlement by state highway commission with contractor had been published (Code 1930, secs. 5971-5976).
SMITH, C.J., dissenting.
APPEAL from circuit court of Monroe county. HON. THOS. H. JACKSON, Judge.
Watkins Eager, of Jackson, for appellants.
This suit is barred by the statute of limitations.
Suit could not be brought on this bond against these defendants save within one year after final settlement.
Marquette Cement Co. v. F. D. Co., 158 So. 924; Dixie Minerals Corp. v. Dixie Asphalt Co., 159 So. 562; Art. 48 (A), No. 25, Laws of Maryland; 59 C.J. 1025-1030; Briscoe v. Buzbee, 163 Miss. 574; I.C.R.R. Co. v. Middleton, 109 Miss. 199; Robertson v. Texas Oil Co., 141 Miss. 356; Foreman v. Wheatley, 113 Miss. 555; Whitebird v. Eagle-Picher Lead Co., 28 F.2d 200; U.S. v. Ala., etc., R. Co., 35 L.Ed. 1134; State v. Middletown Hyd. Co., 151 N.E. 653; Coombe v. U.S., 3 F.2d 714; White County v. Gwin, 36 N.E. 237; 59 C.J. 944, 1124-26, 1129, 1092, 1093, 1087-89; Red River Const. Co. v. Pierce Pet. Corp., 115 So. 752; section 5973, Code of 1930; Thompson v. U.S., 258 Fed. 196; State Public Utilities v. Early, 121 N.E. 63; U.S. v. McCord, 59 L.Ed. 893; Baker Contract Co. v. U.S., 204 Fed. 397.
There was no waiver of the statute of limitations on the part of either of the defendants below.
17 R.C.L., sec. 243, page 884; 37 C.J., sec. 33, page 726; St. Joseph, etc., R. Co. v. Elwood Co., 203 S.W. 680; Carter v. Canty, 166 P. 346; Kemple v. Ind. Acc. Comn., 171 P. 426; U.S. v. Scheurman, 218 Fed. 915; U.S. v. Boomer, 183 Fed. 726; G. S.I.R. Co. v. Bradley, 110 Miss. 162; National Surety Co. v. American Cement Co., 147 So. 158.
The court below committed error in rendering a judgment for appellees in this cause since proper process was not had in that there was no publication of the pendency of this cause in Lowndes county.
Sections 1395, 1595 and 5976, Code of 1930; U.S.F. G. Co. v. Mobley, 143 Miss. 512; Excello Feed Milling Co. v. U.S.F. G. Co., 145 Miss. 599.
This suit should be reversed because plaintiff below had no cause of action.
Sections 5973, 5972, Code of 1930; 37 C.J. 686; U.S. v. McCord, 59 L.Ed. 893; Dixie Minerals Corp. v. Dixie Asphalt, 159 So. 562; U.S.F. G. Co. v. Plumbing Wholesale Co., 166 So. 529.
Leftwich Tubb, of Aberdeen, for appellees.
This suit is not barred. This is a suit on a public contractor's bond. It is based on sections 5971, et seq. of the Code of 1930. The defendants do not challenge the right of the use of plaintiffs at bar to maintain this suit as provided in sections 5971 and 5972, but their defense is that the suit was not brought within one year from the date of the completion and final settlement of the work, to-wit, one year after September 30, 1931, and therefore, plaintiffs are barred. These statutes have been frequently construed by this court so that at the present time they are quite well defined and the rights and remedies thereunder no longer remain in doubt.
Oliver Construction Co. v. Crawford, 142 Miss. 490, 107 So. 877; U.S.F. G. Co. v. Mobley, 143 Miss. 512, 108 So. 501; U.S.F. G. Co. v. Yazoo County, 145 Miss. 378, 110 So. 780; Excello Feed Milling Co. v. U.S.F. G. Co., 145 Miss. 599, 111 So. 94; McElrath Rogers v. W.G. Kimmons Son, 146 Miss. 775, 112 So. 164-680; Stowell v. Clark, 152 Miss. 32, 118 So. 370; Standard Oil Co. v. National Surety Co., 143 Miss. 841, 107 So. 559; Shuptrine Const. Co. v. Jackson Equipment Service Co., 168 Miss. 464, 150 So. 795; Marquette Cement Co. v. Fidelity Deposit Co., 158 So. 924; Dixie Minerals Corp. v. Dixie Asphalt Paving Co., 172 Miss. 218, 159 So. 562.
Section 5971 creates the cause of action in behalf of any person who has supplied labor and material to the contractor or any sub-contractor on the job and who has not been paid. The remedy to enforce this cause of action is provided for in the succeeding sections. Section 5972 provides that the obligee in the bond shall have the first right to sue thereon for the period of six months from the completion and final settlement of the contract. Then, any person who may have supplied labor and materials and who has not been paid, may make application to the obligee in the bond, in this case the state highway commission, for a copy of the contract and bond, which he may use for the purpose of the suit. That was done in the present case.
No suit was by the state of Mississippi or the State Highway Commission filed within six months from the date of the completion and final settlement of the work under the contract. It is true that this work was completed and final settlement made on September 30, 1931, and that the present suit was not brought until April 5, 1933. It is also true that the State Highway Commission did not publish notice to the effect that the work under this contract had been completed and final settlement made on September 30, 1931. There was no notice to this effect published in any newspaper in the county or district where the work was performed nor anywhere else. There is no dispute about these facts. Appellants and appellees agree thoroughly about them.
It will be observed that under the plain unambiguous language of section 5973, taking the entire section and construing all of it together, and with the plain meaning of the words, that the period of limitation within which the suit shall be brought does not begin to run until the obligee in the bond shall have made final settlement and published notice thereof in some newspaper published in the county where the work is performed, or if there be no such newspaper in the county, then in some other newspaper having a general circulation in said county.
Oliver Const. Co. v. Crawford, 142 Miss. 490, 107 So. 877; Marquette Cement Co. v. Fidelity Deposit Co., 158 So. 924; Dixie Minerals Corp. v. Dixie Asphalt Paving Co., 172 Miss. 218, 159 So. 562.
There is no proof in this record that the State Highway Department has ever construed the statute to mean that it is under no duty to follow it and to make publication of notice of the time of the completion and final settlement, but the letter of the Attorney General seems to indicate that it was not to their interest so to do. In other words, it may be to the interest of the State Highway Department to keep in force for years to come the liability on these bonds, so that any person who may have furnished labor and material shall have the right to sue thereon beyond the period of one year from the date of completion and final settlement.
It will be remembered that in our state decisions and in the federal court decisions these statutes are liberally construed, so as to effectuate their beneficent purposes.
Argued orally by W.H. Watkins, Jr., and Mrs. Elizabeth Hulen, for appellants, and by T.J. Tubb, for appellees.
This suit was instituted against a highway contractor and his surety by subcontractors, and persons who furnished materials, supplies, and labor in the construction of a highway.
The suit was brought under provisions of article 6, chapter 151, "Contracts for Public Works," Code 1930, sections 5971 to 5976, inclusive. The declaration alleged, and the pleadings throughout admit, that the state highway commission had made final settlement with the contractor, but that no notice of such final settlement had been published, as provided by section 5973, Code 1930. This being true, the cause is ruled by the case of United States Fidelity Guaranty Co. v. Plumbing Wholesale Co. (Miss.), 16 So. 529, wherein it was held that, after final settlement of a public contract, no cause of action accrues against the surety on the contractor's bond until publication of notice of such final settlement. Consequently, the judgment of the court below will be reversed, and the cause dismissed without prejudice to any rights of appellees that may accrue upon publication of notice of final settlement of the contract.
Reversed and dismissed.
I am of the opinion that the appellant's cause of action on the bond here sued on had accrued when the action was begun; that United States Fidelity Guaranty Company v. Plumbing Wholesale Co. (Miss.), 166 So. 529, was wrongly decided, and should be overruled. Section 5971, Code 1930, requires one contracting for the construction of a public building or work, to execute a bond to the state or the political subdivision thereof for which the work is being done, for the faithful performance of the contract, "with the additional obligation that such contractor or contractors shall promptly make payments to all persons supplying labor or material therefor." The remainder of the section, and several subsequent sections, deal with the time when, and the method by which, this obligation of the contractor to laborers and materialmen may be enforced. Section 5971 gives them the right to intervene in any suit on the bond by the obligee. Section 5972 gives the obligee the exclusive right to sue on the bond for the first six months after the completion and final settlement of said contract, at the expiration of which time the laborers and materialmen may sue thereon in the event that no such suit has been begun by the obligee.
Section 5973 provides: "When suit is instituted by any of such persons on a bond, it shall not be commenced until after the complete performance of said contract, and final settlement thereof, and shall be commenced within one year after the performance and final settlement of said contract and not later; provided that if the contractor quits or abandons the contract before its completion suit may be instituted by any such person on said bond and shall be commenced within one year after such abandonment and not later." Had the section ended here, the right of action would have lapsed at the expiration of one year from the completion or abandonment of the contract; but obviously, for the reason that laborers and materialmen might not know of the completion or abandonment of a contract, the statute proceeds to provide a method by which they may acquire this knowledge. It proceeds as follows: "But said time for the institution of said section [action] shall not begin to run until the obligee shall have made said final settlement or determined said abandonment and published notice thereof in some newspaper published in said county, or if there be none then in some newspaper having a general circulation therein." The right of unpaid laborers and materialmen to sue on the bond arises on the expiration of six months after the completion or abandonment of the contract; and the limitation of time thereon does not begin to run until the obligee publishes a notice that the contract has been completed or abandoned. That such is the statute's meaning was assumed in Oliver Construction Co. v. Crawford, 142 Miss. 490, 107 So. 877, 879, Marquette Cement Mfg. Co. v. Fidelity Deposit Co., 173 Miss. 164, 158 So. 924, and Dixie Minerals Corp. v. Dixie Asphalt Paving Co., 172 Miss. 218, 159 So. 562.
In the Oliver Construction Company Case suit was filed more than one year after publication of notice of the completion of the contract, because of which the defendant claimed that the suit was barred. The complainant's claim was that this notice was so defective as to be inoperative, and therefore the period of limitation had not begun. In replying to these contentions, the court said: "The one year's limitation therein prescribed does not run until the obligee shall have made said final settlement or determined said abandonment and published notice thereof." The court, however, found it unnecessary to determine whether or not the proof of publication was defective, but turned to and decided the case on another point. In the Marquette Cement Mfg. Co. Case counsel for the bonding company said the construction put upon the statute in the Oliver Construction Co. Case was not necessary for the decision of the case, and therefore was mere dicta which the court should not follow. The court, however, said that whether this announcement of the court was dicta or not, it was correct and would be followed. This holding was followed and approved in Dixie Minerals Corporation Case. It is true that in none of these cases was the point made that the cause of action did not accrue until publication of completion or abandonment of the contract was made; but that the cause of action did accrue, although no such publication was made, was assumed both by the court and counsel.
The statute imposes an obligation on the obligee in the bond for the benefit of the obligor therein, and of persons furnishing laborers and material to the contractor, to publish a notice of the completion and final settlement of the contract, or of its abandonment; but it does not disclose a legislative intent to leave unpaid laborers and materialmen at the mercy of a recalcitrant obligee in the bond, as my associates, in effect, hold that it does by prohibiting them from availing themselves of their right to sue on the bond unless and until the obligee therein publishes a notice of the completion or abandonment of the contract, which notice he may never publish.