Kansas City ex rel. Diamond Brick & Tile Co. v. Schroeder

BURGESS, P. J. This is a suit by Kansas City to the use of the Diamond Brick & Tile C'ompany against S. F. Schroeder, James Van Burén, Jr., and the National Surety Company, on a contractor’s bond wherein said Schroeder is principal, and Van Burén and the National Surety Company are sureties. The contract in question was for the paving of a portion of Howard street in said city. The Diamond Brick & Tile Company furnished the brick which were used in the paving. The answer of the defendant Schroeder was a general denial. The defenses interposed by the other two defendants were, first, a general denial, and, next, a special plea alleging the invalidity of the paving contract between Schroeder and the city on the ground that it was entered into in violation of section twenty of article nine of the city charter, which requires competitive bidding in such contracts, since the ordinances authorizing and confirming said contract expressly limited the paving material to “Diamond Vitrified Paving Brick,” which was made and sold exclusively by the Diamond Brick & Tile Company. McTernan-Halpin Eock Crushing Company, Stewart-Peck Sand Company and Halliwell Cemént Company each filed an intervening petition seeking to recover against defendants for materials furnished to Schroeder and by him used in the work. Defendants Van Burén and the National Surety Company filed motions to strike out these intervening petitions on the ground that there was no legal authority permitting such interventions. These motions were overruled, and the answers which had been filed to plaintiff’s petition were, by stipulation, treated as applying to the intervening petitions, and on the issues raised by them the case went to trial. The evidence tended to show the accounts as claimed by the petitions to be due for materials furnished Schroeder by the plaintiff and the several interveners, and used in the paving done under the contract between — 294 — Schroeder and the city; that the petition for paving, the city council resolution setting forth the necessity for paving, the city ordinances authorizing the paving and confirming the contract with Schroeder, all expressly confined the paving material to “Diamond Vitrified Paving Brick;” that Diamond Vitrified Paving Brick was made and sold exclusively by the plaintiff; that there was nothing peculiar about this manufacture of brick, but that similar brick were made in various other parts of the country and by at least four other firms in Kansas and Missouri near to Kansas City; that one such firm was located in St. Joseph, Missouri, and another, the Kansas City Vitrified Brick Company, in Kansas City; that two other paving bricks of this character besides the Diamond brand had been used in the paving of streets in Kansas City and had stood the tests prescribed by the city and as paving material given as good satisfaction as the Diamond; that the brick used in such paving and furnished by the Pittsburg Vitrified Brick Company had given better satisfaction than the Diamond brand; that one Spiers, working on a commission of fifty cents a thousand brick, had secured the signers to the petition for paving this part of Howard street with Diamond Vitrified Paving Brick; that the Diamond Brick & Tile Company had, under its contract with Schroeder, furnished all of the brick used in said paving; that more than half of the cost of said paving went for the brick so furnished; and that the plaintiff sold its paving brick direct to the contractor and no brick of that brand could be bought from anyone except the plaintiff. The appellants asked and the court refused each of the following declarations of law: “1. On the undisputed evidence in this case the' finding of the court must be in favor of defendants, Van Burén and National Surety Company, as against plaintiff. “2. On the undisputed evidence in this case the — 295 — finding of the court must be in favor of defendants, Van Burén and National Surety Company, as against all the interveners. “3. On the facts found the finding of the court must be in favor of defendants, Van Burén and National Surety Company, as against plaintiff. “4. On the facts found the finding of the court must be in favor of defendants, Van Burén and National Surety Company, as against all interveners. ‘ ‘ 5. ■ The ordinance directing that the street in evidence be paved is illegal and void, in that it prevented competition as to all the brick to be used in the construction of the pavement; the charter of said city requires competition in all street improvements of that kind as to all materials going into their construction. “6. The contract between the city and Schroeder for paving the street is illegal and void: (1) because the ordinance is illegal and void; (2) because it also prevents all competition in said brick, in violation of the charter of the city. “7. Said contract between the city and Schroeder is void in foto, not only as to the city, but also' as to the laborers and materialmen. ‘ ‘ 8. Plaintiff is neither a laborer nor materialman within the meaning of the charter or contract. “9. Plaintiff is a party to the contract between the city and Schroeder, made so by the requirement of the ordinance and said contract that plaintiff’s brick only should be used in performing said contract, and made so by the provisions of the contract between plaintiff and Schroeder.” To the refusal of the court to give the declarations of law as asked appellants excepted. The court specially found the facts to be that while the amounts of the bills for material went into the work, yet the contracts were promoted by the brick company and so let and made that there could be no competition, and so that no brick but that made by plaintiff — 296 — could be used, and adopted these conclusions of law: “Under the evidence in this cáse the finding of the court must be: “That the plaintiff is entitled to recover of and from the defendants said sum of $4,930.58, with interest thereon at the rate of six per cent per annum from the 27th day of August, 1902; ‘ ‘ That the intervener McTernan-Halpin Rock Crushing Company is entitled to recover of and from the defendants said sum of $1,134.30, with interest thereon at the rate of six per cent per annum from the 2nd day of September, 1902; “That the intervener, Stewart-Peck Sand Company, is entitled to recover of and from the defendants said sum of $1,075.71, with interest thereon at the rate of six per cent per annum from the 15th day of January, 1903; “That said intervener, Halliwell Cement Company, is entitled to recover of and from the defendants said sum of $637.79, with interest at the rate of six per cent per annum from the 2nd day of September, 1902. “The ordinance providing for the paving of the street in question prevented competition as to the brick to be used in the construction of said pavement. The charter of said city requires competition in the letting of all contracts for such improvements. Said ordinance and the contract between the city and Schroeder, made in pursuance thereof, was to that extent in conflict with the charter, but whether said ordinance was absolutely void in all things or not when passed, and whether said contract was absolutely void in all things or not when executed need not now be determined; but the contract in this case between Schroeder and the city for the paving of the street in question, having been fully performed in all things, except only in the payment of materials sued for in this case and used in the construction of said pavement, the defendants are estopped to deny in this case the validity of said contract.” — 297 — The court then rendered judgment, as follows: “Now come the parties and the interveners by their attorneys, and this cause having been heretofore submitted to the court on the pleadings and evidence and the argument of counsel, and the court, having taken the same under advisement and now being fully advised in the premises, finds the issues for the plaintiffs and the interveners, and against the defendants, S. P. Schroeder, James Yan Burén, Jr., and the National Surety Company. “And the court finds that there is due the Diamond Brick and Tile Company, from said defendants, the sum of $4,930.58, with interest thereon at the rate of six per cent per annum from the 27th day of August, 1902, to this date, said interest amounting to $201.67, and that the total amount so due said Diamond Brick and Tile Company is $5,132.25 with six per cent interest from the date hereof until paid. “That there is due the intervener, McTernan-Halpin Eock Crushing Company, from said defendants, the sum of $1,134.30 with interest thereon at the rate of six per cent per annum from the 2nd day of September, 1902, to this date, said interest amounting to $45.37, and that the total amount so due said intervener, the Mc-Ternan-Halpin Eock Crushing Company, is $1,179.67, with six per cent interest from the date thereof until paid. “That there is due the intervener, Stewart-Peck Sand Company, from the said defendants, the sum of $1,075.71, with interest thereon at the rate of six per cent per annum from the 15th day of January, 1903, to this date, said interest amounting to $19.18, and that the total amount so due said intervener, the Stewart-Peck Sand Company, is $1,094.89, with six per cent interest from the date hereof until paid. ‘ ‘ That there is due the intervener, the Halliwell Cement Company, from the said defendants, the sum of $637.79, with interést thereon at the rate of six per cent — 298 — per annum from the 2nd day of September, 1902, to this date, said interest amounting to $25.51, and that the total amount so due said intervener, the Halliwell Cement Company, is $663.30, with six per cent interest from the date hereof until paid. “That the aggregate or total amount due to the said Diamond Brick and Tile Company and the interveners, the McTernan-Halpin Bock Crushing Company, the Stewart-Peck Sand Company and the Halliwell Cement Company is $8,070.11, with interest thereon at the rate of six per cent per annum from the date hereof until paid. “Wherefore it is ordered, adjudged and decreed by the court that the plaintiff, Kansas City, have and recover for the use and benefit of said Diamond Brick and Tile Company, and the said interveners, McTernan-Halpin Rock Crushing Company, the Stewart-Peck Sand Company and the Halliwell Cement Company, of and from said defendants, S. F. Schroeder, James Van Burén, Jr., and the National Surety Company, the sum of $9,014, the estimated cost of labor and materials, as stated in the contract between Kansas City and said S. F. Schroeder, mentioned in the petition, and that execution issue herein for the sum of $8,070.11, the aggregate amount found to be due to the said Diamond Brick and Tile Company and said interveners, together with six per cent interest thereon from the date hereof, and for costs herein.” Appellants, after motions for new trials and in arrest of judgment, perfected their appeal. There has been filed a stipulation in this court for reversal of judgment as to the plaintiff, the Diamond Brick and Tile Company. While this suit was brought for the use of the Diamond Brick & Tile Company, other companies that had furnished material for the construction of the street intervened, and the court made a separate finding as to the amount due to each intervener, as also to the plain — 299 — tiff, and rendered judgment in favor of Kansas City for the sum of $9,014, the penalty of the obligation, and ordered execution to issue for said sum. Appellants contend that there must be a reversal of the judgment as to the Diamond Brick & Tile Company, under the stipulation to that effect entered into between the attorneys for the company and the attorneys for James Van Burén and the National Surety Company. In making this point, appellants assert that there were four distinct judgments rendered against them as sureties upon the contractor’s bond: one for $5,132.25 in favor of the Diamond Brick & Tile Company, and separate judgments in favor of each of the three interveners, the latter aggregating $2,937.86; but a casual reading of the record discloses that there was but one judgment, based upon a special finding of the amount due to each one of the parties plaintiff in this suit. It is indisputable that when the appeal was perfected the Supreme Court had jurisdiction of the cause, the amount involved being over $4,500', and having acquired jurisdiction it cannot be shorn of it by the stipulation entered into by the Brick Company and the defendants Yan Burén and the National Surety Company to the effect that the judgment as to the Brick Company may be reversed and final judgment entered either in this court or in the court below in favor of said Brick Company. In Reinhardt v. Scarritt, 115 Mo. 51, the defendants successfully demurred to plaintiff’s petition in the court below, and from a judgment rendered thereon plaintiffs appealed to this court. Defendants then came into this court, confessed the demurrer, and asked that the cause be reversed and remanded only. Plaintiffs objected, but notwithstanding the objection, the judgment was reversed and the cause remanded. It will be observed that in that case the appellees all acted in concert.. In the ease at bar, one of four appellees is endeavoring to control* a judgment, while the three others, who are similarly interested as judgment credi — 300 — tors and appellees in the cause, are protesting against it. For this reason that case is not in point, as it would be in a case where there is but one appellee, who might, of course, dispose of his judgment as he might see proper. As there is but one judgment, the agreement by the Brick Company to its reversal, and for final judgment in favor of appellants, was without authority, and of no binding force or effect. Defendants claim that the court erred in permitting the McTernan-Ilalpin Bock Crushing Company, Stewart-Peek Sand Company and Halliwell Cement Company to file intervening petitions, such permission being without authority of law. The record shows that while appellants did move the court to strike out the intervening petitions of respondents, the motions were overruled; that defendants then answered and went to trial upon the merits, and in this way waived the question. [Rinard v. Railroad, 164 Mo. 270; Liese v. Meyer, 143 Mo. l. c. 556; Cofer v. Riseling, 153 Mo. 633; Springfield E. & T. Co. v. Donovan, 147 Mo. 622.] The objection might have been raised by demurrer upon the ground that there was a defect of parties plaintiff, that several causes of action were improperly united, or that the parties plaintiff, i. e., the interveners, were not necessary parties to a complete determination of the action. [Sec. 598, R. S. 1899.] Had objection to the petition, for the causes intimated, been made either by motion or demurrer, the petition could only been sustained, if at all, under section 20 of article 9 of the city charter, under which the interveners were permitted to intervene, the validity of which section would necessarily have been involved. But as this was not done, and as objection to the action of the court in overruling the motion to strike out said intervening petitions was waived as aforesaid, that section of the charter is not before us for review. It is asserted by defendants that the ordinance directing the improvement, and the contract therefor, — 301 — were both illegal and void, and, being so, cannot authorize a recovery by the interveners. The force and efficacy of this objection depend upon the determination of the question as to whether the defendants are in a position to avail themselves thereof. It appears from the evidence that the work was completed, and taxbills in payment thereof issued and turned over to the contractor, all in accordance with the terms of the contract. Under these circumstances it would seem that defendants are in no position to say that the contract and ordinance under which the work was done were void, and thus escape the obligation to pay for the material used by the contractor in the construction of the work. The property owners against whom the taxbills were issued are not here complaining, nor will their rights be in any way affected by this suit, whatever the result may be. The controversy is between the contractor and the sureties upon his contract bond upon the one side, and the companies that furnished material for the work upon the other. City of St. Louis v. Davidson, 102 Mo. 149, was an action upon a bond given by the defendant, Davidson, to the city to secure the performance of a contract on his part with the city, which contract purported to confer power on Davidson to work the city prisoners then in the workhouse at so much per head per day. After working the prisoners for several months, under the contract, the defendant Davidson abandoned it, and an action was then brought by the city, on the bond, to recover the amount due the city for labor of the persons so employed and not paid for. The defense interposed was that the contract was illegal and void as against public policy, and because the city had no authority to make the contract. The court said: “But upon a yet broader ground the defense set up in, the answers cannot be maintained; the contract was not prohibited by law. The principal in that contract has derived benefits under it; he cannot retain those benefits — 302 — and repudiate the source from which they spring by denying the validity of the contract in which they originated. In short, he is estopped to grasp the benefits of that contract with one eager hand, while thrusting aside its burdens with the other.” That case was followed, with approval, in Devers v. Howard, 88 Mo. App. 253, and again in the City of Unionville v. Martin, 95 Mo. App. 28. The appellants are estopped to deny the validity of the contract because it has been fully executed. [Land v. Coffman, 50 Mo. 243; Ragan v. McElroy, 98 Mo. 349; Conn. Mutual Life Ins. Co. v. Smith, 117 Mo. 261; Bank v. Trust Co., 187 Mo. 494.] The contract between the materialmen and the contractor is independent of the contract between the city and the contractor; therefore, the relief to which the materialmen are entitled does not depend upon the contract between the city and the contractor, but upon that between them and the contractor. The fact, therefore, that the contract between the city and the contractor may be invalid, can have no effect upon the contract between the materialmen and the contractor. The case of the United States to use v. National Surety Company, 92 Fed. 540, raises the identical question presented on this appeal. In that case the contractor gave bond for public work provided for by a United States statute, which provided for the securing to the government the faithful performance of the contract and the protection of third persons from whom the contractor might obtain labor and material for the prosecution of the work. After the bond had been executed, it was changed by the government and the contractor, without the knowledge of the sureties of the contractor’s bond. In a suit on said bond by the materialmen the sureties claimed release from the bond by reason of said change. The court said: “The bond which is provided for by the act was intended to perform a double function, in the first place, to secure the — 303 — government, as before, the faithful performance of all obligations which a contractor might assume towards it; and, in the second place, to protect third persons from whom the contractor obtained material or labor. Viewed in its latter aspect, the bond, by virtue of the operation of the statute, contains an agreement between the obligors therein and such third parties that they shall be paid for whatever labor or material they may supply .to enable the principal in the bond to execute his contract with the United States. The two agreements which the bond contains, the one for the benefit of the government, and the one for the benefit of third persons, are as distinct as if they were contained in separate instruments, the government’s name being used as obligee in the latter agreement merely as a matter of convenience. In view of these considerations, we are of the opinion that the sureties in a bond, executed under the act now in question, cannot claim exemption from liability to persons who have supplied labor or material to their principal to enable him to execute his contract with the United States, simply because the government and the contractor, Avithout the surety’s knowledge, have made some changes in the contract, subsequent to the execution of the bond given to secure its performance, which do not alter the general character of the work contemplated by the contract or the general character of the materials which are necessary for its execution. "When the government has executed the contract and taken and approved the bond, it ceases to be the agent of third parties whom the contractor employs in the execution of the work or from whom he obtains materials, and the rights of such persons under the bond are unaffected by subsequent transactions between the government and the contractor. If such were not the case, it would be possible for the contractor and some officer of the United States, by making some change in the contract or specifications, to deprive laborers and materialmen of all recourse against the sure — 304 — ties in the bond after they had supplied materials and labor of great value in reliance upon its provisions. It is not probable that such a result was contemplated by the lawmaker. On the contrary, the act bears every evidence that it was intended to provide a security for laborers and materialmen on which they could rely confidently for protection, unless they saw fit, by their own dealings with the contractor, to relinquish the benefit of the security. We are confirmed in these views by the following authorities: Dewey v. State ex rel., 91 Ind. 173; Conn v. State ex rel., 125 Ind. 514; Doll v. Crume, 41 Neb. 655; Kauffman v. Cooper, 46 Neb. 644; Steffes v. Lemke, 40 Minn. 27.” In the case of School Dist. ex rel. v. Livers, 147 Mo. 580, the defendant acquired the contract for erecting an addition to Central High School in Kansas City and gave a bond in a designated sum, conditioned that the bond was executed not only for the protection of the School District, but also for the benefit of all parties who might use material in the building, and any such parties having unpaid bills therefor might in the name of the school district maintain an action on the bond to recover the amount of such bills. In a suit upon the bond the court said, page 584: ‘ ‘ The bond is dual in its nature, being for the benefit and protection of the school district against loss or damages for the non-fulfillment of their contract by the contractors, and the payment by them of laborers for work done, and of materialmen for materials furnished, rights which when once fixed could not be destroyed or taken away by any act of the school district.” [City of Bethany v. Howard, 149 Mo. 504; Kansas City to use v. McDonald, 80 Mo. App. 444; St. Louis to use v. Von Phul, 133 Mo. 561; Devers v. Howard, 88 Mo. App. 253, l. c. 257.] The city, in requiring bonds from contractors for public work, was in discharge of a moral obligation to the laborers employed upon such works and the materialmen who furnished material therefor, in the absence — 305 — of which bond they are without recourse for compensation. A similar bond was involved in the case of St. Louis to use v. Von Phul, 133 Mo. 561, in which MacFarlane, J., speaking for the court, said: “Through considerations of public policy, the law has made no provision by lien, or otherwise, for the protection of the laborer and materialmen for labor employed or materials used in improving the public streets. • But it cannot be denied that the same equity exists, and that the same moral obligation rests upon the city to protect those who improve its streets as rest upon those making private improvements. ‘Individuals clothed with public functions, even when constituting a corporation, are no more excused from moral obligations than when acting in a private capacity’ citing Knapp v. Swaney, 56 Mich. 350. In the case of Levers v. Howard, 88 Mo. App. 253, the object of the bond was twofold: for the faithful performance of the work, and for the purpose of securing all persons who might perform labor or furnish materials for the construction of the well. Plaintiff was a materialman and sued on the bond for the material used in the construction of said well. The finding of the trial court was for the plaintiff, and upon appeal the same was affirmed by the Kansas City Court of Appeals. The right and power of the city to require the bond in question was challenged by the defendant, and the court said: ‘ ‘ Since the decision of .the case of 144 Mo. 680, and in St. Louis v. Von Phul, 133 Mo. 561, and Rogers v. Gosnell, 58 Mo. 590, it is no longer an open question but what a city has the right to require such bond as the one in question herein.” [Devers v. Howard, 144 Mo. 671.] Our conclusion is that the judgment is for the right parties and should be affirmed. It is so ordered. All concur.