152 Iowa 531 | Iowa | 1911
On August 21, 1907, tbe city of Des Moines entered into a written contract with tbe Marsh Bridge Company for tbe erection of a concrete bridge over
The contention in the Ballard case is briefly that the levy of the special tax and certificates issued in pursuance thereof were invalid, and their enforcement should be enjoined for the reason that the city was without'jurisdiction or authority to act prior to the completion of the bridge in view of the provision of the statute authorizing such levy of tax and issuance of certificates (32 Gr. A., chapter 36, already referred to), in which it is recited that when the whole or any part of the cost of building any bridge such as is referred to in the act “shall be levied upon all property within said city, it shall have the power after the completion of the work by ordinance or resolution to levy at any one time the whole or‘any part of the cost of such improvement upon all of the taxable property within such city,” designating the percentage to be paid .each year and the number of years given for the maturity of each installment, and that certificates under such levy shall be issued payable out of said tax as collected. The contention of the surety company is that for the same reasons the levy and certificates were wholly invalid, and that the city is
The same considerations are applicable to the surety company. The amount of its liability would not be lessened by the cancellation of the levy and certificates already authorized. New certificates hereafter issued would be applicable to the same purpose and would satisfy the same claims as the certificates already issued, and we fail to understand how the surety company would be in any better position.
The theory of the surety company and the trustee in bankruptcy of the bridge company seems to be that in some way the claims held by the banks in satisfaction of which certificates were accepted, which are now held by the Central State Bank, have been so far extinguished that, if those certificates were to be declared invalid and new certificates issued, such new certificates might be applied to the payment of other claims. No such case is made out. If the certificates were absolutely invalid when they were issued, then the claims to the payment of which they were applied still exist, and are enforceable, and we are unable to see how anyone would be better off should the court require the apparently useless formality of the reissuance of certificates on. a new levy to be made under the same statute and for the same identical purpose.
We reach these conclusions without finding it necessary to hold that the certificates were negotiable and the Central State Bank a purchaser thereof for value. The suggestions already made sufficiently dispose of the contention that the resolution of the city council passed January 13th levying the special tax out of which the certificates were to be paid was invalid because it had not been on file with the city clerk for one week before its adoption, and because it was by special provisión attached thereto made to take effect at once as being “for the immediate preservation of the public, peace, health and safety.” See 32d General Assembly chapter 48, section 20. None of the parties to this controversy are in a situation to take advantage of any irregularity in the passage of this ordinance. As already indicated, the adoption of the ordinance was a part of the plan to which the bridge company and the surety company assented, and plainly a taxpayer is not in any situation to be entitled to relief on account of such mere-technical defect.
But there is another consideration which effectually disposes of the surety company’s complaint in regard to the modification of the contract and the extension of time by the city. Tl}e judgments against the surety company were in favor of material-men for whose benefit the bond was specifically, executed. It is conceded by the surety company that under the bond it became directly bound for the debts of the bridge company to materialmen, and that suits were properly instituted against it by the various claimants whose proper demands had not been met by the contractor. Therefore no action of the city taken after the accruing of claims by subcontractors or materialmen or without their knowledge would release the surety company from its liability to them. Hipwell v. National Surety Co., 130 Iowa, 656,
III. The Jewett Lumber Company on January 23, 1909, filed its claim with the city for $2,077.25 for material furnished to the Marsh Bridge Company and used in the construction of the bridge. The lower court with reference to this claim found as a matter of fact that the last item of the account was furnished December 30, 1908, and ordered the amount of said claim with interest to be paid by the city out of the $18,000 in bridge certificates retained to be delivered to the bridge company only on the completion of the bridge, and decreed that by way of supplemental relief the Jewett Lumber Company have judgment against- the surety company for the amount of its said claim. The complaint of the surety company with reference to this specific judgment is answered by what has already been said to. the effect that, irrespective of any claim which materialmen may secure against the fund due to the contractor remaining in the control of the city, the surety company is directly liable to the materialmen under its bond. But the trustee in bankruptcy of the bridge company complains of this judgment for two reasons: First, that the statement of the claim that was furnished to the city did not show that the last item of the .account for material furnished was within thirty days of the date of filing its claim, as required by Code, section 3102, as a condition to the establishment of a claim by a material-man .against a public corporation in the construction of a public bridge or other improvement; and, second, that the court should have declared the obligation of the surety
The claim of the Carver Hardware Company for $113.75 with interest is in the same condition as that of the Jewett Lumber Company, save that there is no controversy as to the filing of its statement with the city within thirty days after the furnishing of the last item as showp ■by such statement. The decree of the lower court in making this claim payable primarily out of the $18,000 reserved by the city in certificates with a supplemental and conditional judgment against the surety company in case the claim is not thus satisfied was correct.
IV. Some claimants have appealed from the provisions of the decree denying them judgments against the city payable out of the reserve fund of $18,000 in certificates. Ás all these claimants were given judgment against the surety company, their rights against the city may not be very material. Their contentions can be disposed of without great elaboration.
The fact that the material was subsequently furnished to the trustee of the bridge company in the completion of the bridge can have no bearing on the case. No claim therefor was made or could have been made in the statement filed, and no claim therefor was ever made in any subsequent statement. Indeed, the material furnished to the trustee in bankruptcy has not been a subject of controversy in this action as between the AVheeler Company and the city, or between the Wheeler Company and the surety company.
As no obligation on the part of the city to the Wheeler Company ever arose or existed, the Wheeler Company can not complain of the action of the city in making payments to the bridge company prematurely or otherwise than as provided in the contract. The court did not err in refusing to render a judgment in favor of the Wheeler Company as against the city.
With much less reason can it be claimed that one who furnishes the tools with which a contractor erects a public improvement is entitled to a lien against the public corporation for which the improvement is erected under the statute providing for such a claim for furnishing “the material for the construction” of the improvement. Certainly the city could not under any circumstances be subjected to the payment out of the contract price or otherwise for the working equipment procured by the contractor and used by him in carrying on- the work. It can not be assumed that the contract price for the work covered as a part of the cost the purchase of the working equipment which might have been previously used or might be subsequently employed by the contractor in carrying on other work of like character. The trial court did not err, therefore, in refusing to render a judgment against the city in favor of the Brown-Hurley Company for these items. The • Globe Machinery & Supply Company presented a claim against the city for labor and material furnished the bridge company in the form of equipment or repairs, and used by the said bridge company in the performance of its contract. What has already been said as to the claim of the Brown-Hurley Company is 'sufficient to show that the Globe Company was not entitled to a judgment against
With the modification indicated in the last division of this opinion, we find the decree of the lower court to
SUPPLEMENTAL OPINION.
In a petition for rehearing in behalf of the Brown-Hurley Hardware Company and the Globe Machinery & Supply Company, our attention is called to the fact that on the cross-appeals of these two companies we have failed to notice the contention that the trial court erred in not rendering judgment against the Empire State Surety Company on its bond in the full amount claimed by them, respectively.
It is said in argument that the claims now under consideration nre of the same character as the claim of the Wheeler Lumber, Bridge & Supply Company for which judgment was rendered against the surety company; but this contention is not supported by the record. The stipulation as to the claim of the Wheeler Company recites that it furnished the bridge company with lumber and piling which was used for falsework in the construction of the bridge under the contract and specifications therefor, and there is nothing in the stipulation to indicate that any of the material furnished by the Wheeler Company was for machinery or equipment or for the repairs thereto. The
There is also a petition for rehearing on behalf of Moss as trustee for the bridge company, ip which it is contended that in allowing the claims of the Garver Hardware Company and the Jewett Lumber Company against the city and directing them to be paid out of the reserve fund of $18,000 retained by the city, an injustice had been done to the general creditors of the bankrupt estate. Without further elaboration on this question, we are satisfied to adhere to the general "position indicated in the original opinion to the effect that the trustee in bankruptcy is in no situation to claim any preference to this $18,000 reserve fund. He is entitled only to so much of it as is not properly exhausted in the payment of claims which had accrued before the 'bankruptcy. He did not acquire a right to this reserve fund as a purchaser without notice of claims against it, nor was he entitled to any preference. Counsel for the trustee rearg&e some of the questions which were briefly disposed of in the original opinion. We think a further elaboration of our views to be unnecessary, and are content to adhere to the conclusions already reached.
Both petitions for rehearing are overruled.