| Mo. | Nov 12, 1900
This is a suit in equity to subject a fund reserved in the treasury of the defendant city of St. Louis to the payment of the plaintiff’s claim against a city contractor in preference to the claim of the defendant, the Citizens Bank, which is a judgment creditor and assignee of the contractor. The defendants are the Citizens Bank, which is the sole appellant, the Lyons Construction Company and the city of St. Louis.
The facts out of which the controversy arises are as follows: In December, 1895, the city let a contract to the Lyons Construction Company for the building of a public sewer. The contract and specifications are quite elaborate in their provisions and details, but it will be necessary to mention only two of the provisions as determining the rights of the parties to this suit. It was provided in effect that upon the completion of the work if the contractor had not paid for all the labor and materials used the city might retain fifteen per cent of the contract price until such payments should be made. It was also stipulated that the work was to be completed within a defined period, that the completion within that period was an essential consideration in the contract, and if the contractor failed in that respect the city should deduct from the contract price five dollars for each day the completion was delayed beyond that period.
In view of this contract and during the construction of the sewer the plaintiff sold and delivered to the Lyons Oon
Prior to the transactions arising out of this contract the plaintiff had had similar dealings with Patrick Lyons,'who was a contractor of that kind of work on his individual account and who was then indebted to plaintiff on such account to the amount of $2,150. Just about the date of the contract in question the Lyons Construction Company was incorporated and the business of Patrick Lyons was merged into it, the corporation taking his assets and assuming his liabilities. The plaintiff was informed of this condition when the Lyons Construction Company made application to it to furnish the cement for this contract. While it was engaged in building this sewer the Lyons Construction Company had other similar jobs on hand and the plaintiff furnished the cement for those jobs. When the plaintiff opened its account with the Lyons Construction Company it carried into it as the first item of debit the balance due from Patrick Lyons and charged thereafter, in the order of their occurrence,. the items of cement furnished the construction company on its various jobs. During the progress of the work on the contract in question the construction company from time to time made payments to plaintiff without specifying on what account they were to be applied,,, and the plaintiff applied them first to the extinguishment of the individual debt of Patrick Lyons brought into the corporation account as above stated, and to other items of the account, and the balance towards the payment of the account for cement furnished under this contract. In the written proposal of the plaintiff for the furnishing of the cement under this contract, which embodies the agreement between the plaintiff and the construction company, it is stipulated: "All cement
When the construction company entered into the contract with the city it gave a bond with security for $10,000 for its faithful performance, and among the conditions was one to the effect that it would pay all its bills for labor and material, and it stipulated that any one holding an unsatisfied bill for labor or materials furnished might sue on the bond and have satisfaction. The plaintiff had, before it brought this suit, brought suit on that bond to recover the same debt it seeks to have satisfaction for in this proceeding, and that suit is still pending.
In January, 1896, during the construction of the sewer in question the Lyons Construction Company executed a power of attorney to one Earr, who was then the cashier of the Citizens Bank, authorizing him to collect from the city all moneys coming to the construction company under any' contracts, and in August in the same year, Earr having resigned as such cashier, the construction company ' made another power of attorney to the bank, authorizing it to receive all moneys accruing to the construction company from the city. These documents were filed with the city auditor and were executed to secure the bank for loans it had made and continued to make to the construction company during the progress of the work, which loans amounted to about $6,000. In December, 1896, the construction company confessed judgment in favor of the bank for $5,762 in the circuit court of St. Louis, which was the balance then due on those loans and is still unpaid.
Tbe total cost of constructing tbe sewer was $26,248.14. Erom this amount tbe city has reserved tbe $530 above mentioned, and two items amounting to $3,857.72 to secure tbe payment of labor and material bills, which, with previous payments, left a balance of $1,134.87 payable to tbe contractor, making in all $5,522.59 in the city treasury when this suit was begun. Tbe substance of tbe decree was that tbe city pay tbe plaintiff out of tbe funds reserved tbe amount of its bill, which, with interest, was adjudged to be $3,120.24, retain tbe $530 for its claim, and pay tbe balance of tbe fund to tbe Citizens Bank. Erom this decree tbe bank prosecutes this appeal.
I. The first point advanced by appellant is that- tbe plaintiff has no right to maintain this suit in equity because it has an adequate remedy at law on tbe bond executed by tbe construction company to tbe city.
The rule that equity will not grant relief where there is an adequate remedy at law applies only when on tbe case stated there is a legal remedy.
A distinction is to be observed between a case cognizable at law but for which tbe law has no adequate remedy, and a case that can be adjudicated upon its merits only in a court of equity; in tbe one tbe equity court is invoked only for a remedy, in tbe other for an adjudication of tbe rights of tbe parties on tbe facts. A distinguished writer on this subject would class tbe one under tbe bead of equity jurisprudence and tbe other under that of equity jurisdiction. [Pomeroy, Eq. Jur., sec. 131.]
If on tbe facts stated tbe case is of a nature cognizable only in a court of equity the plaintiff will not be shut out of
The right which the plaintiff seeks to establish in this suit is in its nature such as can be established only in a court of equity. Plaintiff has no legal title to the fund received by the city, but it has, with all others, if there are others similarly situated, a right to have that fund appropriated to the uses to which it was designed by the contract and for which it was received by the city. This right it derives from the contract between the city and the construction company, the contract on the faith of which the plaintiff extended the credit. [City of St. Louis v. Von Phul, 133 Mo. 561" court="Mo." date_filed="1896-03-17" href="https://app.midpage.ai/document/city-of-st-louis-ex-rel-glencoe-lime--cement-co-v-von-phul-8012095?utm_source=webapp" opinion_id="8012095">133 Mo. 561.]
The Citizens Pank does not come within the class provided for in that contract. Its right is only through its power of attorney and its judgment; in this aspect it is only an agent, an assignee or a judgment creditor and in either character it has only the rights that the Lyons Construction Company would have to the fund, but the plaintiff as a materialman has a right superior to and in spite of the construction company.
Nor does the fact that a suit by the plaintiff on the bond was pending when this cause was tried affect the plain
II. The Lyons Construction Company was indebted to the plaintiff on other accounts than that for the cement furnished for this sewer and the plaintiff appropriated the payments it received upon those other accounts until they were satisfied, and the rest on this account. We do not think there can be any doubt of the plaintiff’s right to appropriate the payments in that way.
The evidence showed that the Lyons Construction Company absorbed the business of Patrick Lyons and assumed its liabilities and the plaintiff was notified of this fact when it undertook to furnish the cement to this work. The accounts rendered by plaintiff and accepted by the corporation showed that the account of Patrick Lyons was carried into that of the Lyons Oonstruction Company and by both parties treated as the debt of the corporation. The agreement between plaintiff and the construction company called for monthly payments of the bills, but that stipulation was not complied with, payments were made each month on account, but no particular bill was paid in express terms. It was the privilege of the debtor to direct the appropriation of the payments as they were made, but as this was not done the creditor had the right to appropriate them as it chose, and did so as above stated. [Beck v. Haas, 111 Mo. 264" court="Mo." date_filed="1892-07-01" href="https://app.midpage.ai/document/beck-v-haas-8010591?utm_source=webapp" opinion_id="8010591">111 Mo. 264.]
III. The remaining point of which appellant complains is that the decree sustains the claim of the city to retain $5 a day for delay in completing the sewer within the period limited by the contract. The contract was very explicit on this point. The sewer was to be completed within a given time and the parties agreed that the completion within that time was an essential consideration. But the parties foresaw that in the very nature of the case it would be difficult to lay down a rule by which the city’s damages could be measured
Ve find no error in the record and the judgment is affirmed.