This wаs a suit in equity, brought by the surety on a construction bond of standard government form which was given in connection with a public building contract, to compel the аpplication of installments paid upon the contract to the payment for labor and materials going into the building.
A former opinion of this court in sаid cause will be found in 84 F. (2d) 522, where the facts are set out in detail.
The prayer for relief in the amended bill of complaint included specific performance of a certain contract made by the parties subsequent to the making of the bond; exoneration of the surety company; and subrogation.
The trial court granted the relief by way of exoneration, but denied the other prayers.
This court, upon appeal, granted relief by way of specific performance, and did not pass definitively upon the other two prayers, but modified the decree of the trial court accordingly. Thе surety company had taken no cross-appeal.
Certiorari was granted by the Supreme Court of the United States on the petition of the construction company.
The decree of this court was reversed by the Supreme Court of the United States. See
The last sentence of the opiniоn of the Supreme Court reads as follows: “The decree should be reversed and the cause remanded to the Court of Appeals to pass upon the question, not yet definitively answered, whether relief in the form of a decree for exoneration is proper in the circumstances, and fоr other proceedings in accord with this opinion.”
The question “whether relief in the form of a decree for exoneration is proper in the circumstances” has been reargued and resubmitted in this court; and that is the question now before us for decision.
The amended4 bill of complaint, after státing that thе outstanding bills for labor and material amount to more than $100,000, and that the final estimate, together with "the balance of funds on hand from prior installments which havе been paid, do not equal that sum, states: “Plaintiff has good reason to believe and does believe that defendant Morley Construction Company, unless restrained, will so convert or conceal such funds, and that unless the said funds are so impressed with a trust or lien, aná unless the defendant Morley Construction Company and its officers, servants *977 and agents are restrained and enjoined from withdrawing or disbursing said money or any part thereof for any purpose other than that covered by said supplemental agreement, and unless said defendant Merchants Bank of Kansas City, Missouri, is restrained from permitting the withdrawal of said funds оr any part thereof for any purpose other than that set out in said supplementary agreement, this plaintiff will suffer an irreparable loss, and statеs that the plaintiff has no adequate remedy at law for any relief in the premises.”
And in the prayer for relief asks: “That the Court by its order and decree dirеct and require defendant Morley Construction Company to exonerate this plaintiff from the payment of any bills for labor and material due or to bеcome due on account of the construction of said improvements, and to pay off and discharge any and all of such bills and to proteсt and to save plaintiff harmless on account thereof.”
It is thus seen that the amended bill of complaint partakes of the nature of a bill quia timet — -а name given to a bill in equity filed by a person fearing some future injury to his rights in property, real or personal, from the negligence, fault, or fraud of another.
The trial court found, among other findings, that at the time the supplementary contract was entered into, as well as at the time the bill of complaint wаs filed, the construction company was insolvent.
Tn Pomeroy’s Equity Jurisprudence (3d Ed.) the following statement is made: “Sec. 1417. Exoneration — Rights of Surety against the Principal Debtor. — When a surety has actually paid or satisfied the principal’s obligation, or any part thereof, he is entitled to be reimbursed by the principal debtor, and can maintain an equitable action for that purpose. He may also maintain a quia timet suit in equity before any payment.”
In Story’s Equity Jurisprudence (14th Ed.) the following statement is found: “Sec. 1142. In Their Nature are Preventive Writs. — Now bills in equity quia timet answer precisely to this latter description. They are in the nature of writs of prevention, to accomplish the ends of precaution: ary justice. They are ordinarily applied to prevent wrongs or anticipated mischiefs, and not merely to redress them when done. The party seeks the aid of a Court of Equity because he fears (quia timet) some future probable injury to his rights or interests, and not because an injury has already occurred whiсh requires any compensation or other relief. The manner in which this aid is given by Courts of Equity is of course dependent upon circumstances. They interfere sometimes by the appointment of a receiver to receive rents or other income; sometimes by an order to pay a pecuniary fund into court; sometimes by directing security to be given or money to be paid over; and sometimes by the mere issuing of an injunction or other remedial prоcess; thus adapting their relief to the precise nature of the particular case, and the remedial justice required by it.”
See, also, Sections 1011 and 1168.
In New Orleans v. Gaines’ Adm’r,
In Admiral Oriental Line v. United States,
See 21 C.J., p. 130, § 106; American Waterworks & Guarantee Co. v. Home Water Co. (C.C.)
In view of the record in the instant case, and in view of the decision of the Supreme Court therein, herеtofore cited, and in view of the foregoing authorities, we think the trial court was right in holding that the plaintiff was entitled to the remedy of exoneration; and that the amended bill of complaint, so far as it related to that remedy, should be treated as a bill in the nature of a bill quia timet. Any expression in our former оpinion looking to a contrary conclusion is withdrawn.
The decree of the trial court conforms to its findings in its distribution of relief. We think the decree is correct, and should be affirmed.
It is so ordered.