114 Mo. 74 | Mo. | 1893
This case is certified here from tbe St. Louis court of appeals under section 6 of tbe amendment of tbe constitution adopted in 1884.
Tbe statement of tbe case made by Judge Biggsof that court is as follows:
“On tbe seventeenth day of July, 1888, tbe municipal assembly of tbe city of St. Louis passed an ordinance authorizing tbe board of public improvements to contract for certain alterations and repairs at tbe House of Refuge. Section 2 of tbe ordinance is-as follows: ‘The cost of tbe above work shall be paid by tbe city of St. Louis, and the sum of $4,500 is-hereby appropriated out of funds set apart for improvements, alterations and repairs of the House of RefugpJ Tbe work was let to one James McLane under three-separate contracts. Contract number 2071 provided for the erection of two new privy buildings at a cost of $2,800. By contract, number 2083,’ McLane agreed to make certain alterations in the' basement and in the-dormitory of tbe old building for tbe sum of $850. Tbe third contract, number 2076, provided for furnishing lumber and laying tbe floor in tbe shoe shop of tbe House of Refuge. Tbe foregoing contracts were signed by McLane as principal and tbe interpleaders, Thomas-C. Higgins and John M. Sellers, as bis sureties. Among-other things tbe contracts provided that ‘in' case tbe contractor shall abandon tbe work * * * tbe commissioner of public buildings shall have power under tbe direction of tbe board of public improvements to place such and so many persons as be may deem advisable by contract
“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 will furnish the said board of public improvements with satisfactosy evidence that all persons who have done or furnished materials wider this agreement and are entitled to a lien therefor, under any law of the state of Missouri, have been fully paid 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 inay be fully discharged.’ Under-paragraph S. of the contract an estimate of the amount of the work done each month is to be made about the first of each succeeding month and a valuation according to the current market prices put thereon; from the amount of such estimate, ten per cent, is to be deducted and the balance certified as due. j
“McLane entered upon the work and continued it until the twentieth day of November, 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 number 2071, the sum of $1,003.50. This would leave the sum of $1,796.50 due from the city if- the work should be completed. The work under contract; number 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 $607.50, leaving a balance due from the city, if the work had been completed, of $242.50.
“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 of November, the city owed him the sum of $37 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 & Sellers to complete the work. No new contract was entered into. The work was to be completed under the old contracts. Higgins & Sellers finished the work to the satisfaction of the city authorities. A few days after this arrangement with Higgins & Sellers, the O’Neil Lumber -Company, one of the interpleaders, filed a suit in equity
“When the city found itself beset with these conflicting claims, it brought into court the amoupt due from it under the McLane contracts, to-wit, $2,105.50. The foregoing facts were stated in its petition, and the court was asked to compel the claimants to interplead for the fund and that they be restrained 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
The court of appeals affirmed the judgment of the circuit court, all the judges agreeing that out of the funds to be. distributed the amount found to be due Higgins & Sellers must be first paid. But to the conclusion reached by a majority of the court of appeals and the circuit court, that the remainder should be distributed among the interpleaders according to the priority of their suits, Judge Thompson dissented, and filed a dissenting opinion, as follows:
“The statute relating to mechanics’ liens contains the following section: ‘The liens for work and labor done or things furnished, as speeifiied in this article, shall be upon an equal footing, without reference to the date of filing the account or lien; and in all cases where a sale shall be ordered and the property sold, which may be described in any account or lien, the proceeds arising from such sale, when not sufficient to discharge in full all the liens against the same, without reference to the date of filing the account or lien, shall be paid pro rata on the respective liens, provided such account or liens shall have been filed and' suit brought as provided by this article.’ Eevised Statutes, 1889, sec. 6727; Eevised Statutes, 1879, 3193.
“With this provision in force, indicating the policy of the state to be that all mechanics and materialmen entitled to liens shall share ratably, the city sees fit to insert this clause in its contract with the mechanic, indicating a clear purpose on its part to see that the policy of the statute is carried out, and that it will withhold enough of what is due to the principal contractor to pay his subcontractors or materialmen. It is true that such persons are not, under the law as judicially construed, entitled to a mechanic’s, lien against any property belonging to the city; but that does not seem to afford a good reason why no effect whatever should be given to this clause of the contract. The city had no right under the decision of Luthy v. Woods, 6 Mo. App. 67, and St. Louis v. Keane, 27 Mo. App. 612, to hold enough of what was due McLane, in the character of trustee for the materialmen who had had furnished to him materials which he used in the work. But events took such a turn that there was not enough for
“The ground on which this result is reached, if I understand the reasoning, is that this fund has never been impressed with the character of a trust, which distinguishes the case from the previous decisions of this court. To my mind it is a conclusive answer to this to say that the city has done all that, it could safely do to impress the fund with the character of a trust fund for the equal benefit of the materialmen, and has certainly not indicated a contrary purpose by handing it over to a court of equity for distribution.
“But it is said that the proceedings in equity, which were taken against the city by the materialmen before the petition of interpleader was filed, were
“But if we are to disregard the policy of the statute relating to mechanics’ liens, and if we are also to disregard the contract between the city and McLane, which shows that both parties had in mind the idea that the materialmen of McLane should share equally, there is another ground which is inexorably logical as well as undeniably just, on which the same result should be worked out. It is the doctrine of our supreme court in Rieper v. Rieper, 79 Mo. 352, the same being, so far as I can see, the last controlling decision of that court upon this question, in which the familiar rule of equity is applied that what are called equitable assets are to be divided pari passu among all creditors before the court. The same doctrine was stated and applied by this court in Heiman v. Fisher, 11 Mo. App. 275; and in St. Louis v. Keane, 27 Mo. App. 646.
“What then are equitable assets? Judge Bale-well in Heiman v. Fisher, 11 Mo. App., at page 280, says that, ‘equitable assets are such as can be reached only by the aid of a court of equity, and the established rule is, that assets which can only be reached in equity
“But to this view there is opposed the argument that in this state, in the case of what is called a creditor’s HU in aid of an execution at law to reach assets which have been concealed or fraudulently conveyed by the debtor, the rule is that the creditor first filing such a bill gets a priority over the others. Such is no doubt the rule in this state, though the contrary principle is every day administered in the courts of the United States here in our midst. But the assets thus pursued and made available by the creditor are not not equitable assets within the sense of the rule under consideration, for the reason that they are vendible under his execution at law. The creditor can levy upon his debtor’s interest in property which the latter has fraudulently conveyed, have it sold at sheriff’s sale, become the purchaser and then bring a suit in equity to clear his title; and I understand that a third person may become the purchaser at sheriff’s sale and have the like remedy
“But there is another reason which distinguishes those cases from this. In those cases the moving creditor, even where he does not first sell the debtor’s interest under his execution at law, often goes to great labor and expense in uncovering assets of his debtor. It is therefore debatable, to say the least, whether he ought to be required, after fighting the battle, to allow the camp-followers who have skulked in the rear to come in and divide with him the fruits of the victory. But no such condition of things exists in respect of the question we are considering. The debtor has made no fraudulent conveyance—has concealed no assets. He has simply run away, leaving visible certain assets in the hands of a custodian who is so privileged, under the policy of the law, that that custodian can only be compelled to account for them and to distribute them by a court of equity. Shall the principle which rewards the diligence and courage of* the judgment creditor, who sues to set aside a fraudulent conveyance, be applied so as to give a priority to the creditor seeking satisfaction out of such equitable assets merely because he may happen to file his bill a day before the others? This is not rewarding diligence, courage, labor and the expenditure of money. It may result merely in rewarding good fortune. The creditor first filing his bill may not even be the most diligent; he may merely be the most fortunate. A day’s sickness in the case of his rival creditor, the accident of employing one lawyer instead of another, may, if this is to be the rule, turn the scale and give him all, while the others standing in equal right get none. • '•
In this conclusion reached by the learned dissenting judge, we concur. We' think he might have safely rested it upon the case of Rieper v. Rieper, 79 Mo. 352, and the last ground so forcibly put in his opinion, to which we deem it necessary to add only a word in explanation of our position.
While a court of equity, under the admirable doctrine announced in the able opinion of Judge Bliss in Pendleton v. Perkins, 49 Mo. 565, can and will give a remedy to creditors against assets in its custody, or which can be reached only by its strong arm, yet such courts cannot create for their benefit either the process of garnishment on the one hand or the remedies to be acquired under the mechanic’s lien law on the other, and are not constrained to a distribution of those assets to creditors according to the principles that would, obtain under the law governing either; but will make such distribution, according to right and justice, which in this case would be (after paying Higgins & Sellers the amount found due them for the furnishing
