John W. Hood & Co. v. Board of School Directors of Tangipahoa Parish

FOSTER, District Judge. On September 18, 1913, John W., Hood, a citizen of Mississippi,, and Martin W. Sansbury, a citizen of Arkansas, members of a copartnership styled John W. Ho'od & Co., filed their bill against the board of school directors of Tangipahoa parish, a Louisiana corporation. The bill sets up substantially that the complainants entered into a contract with the school board for the erection of a school building for the sum of $16,520 and gave bond for the faithful performance of the contract in the sum of $8,360 with the National Surety Company, a New York corporation, as surety; that the building had been completed and was formally accepted on April 17, 1913; that there was a balance due them on the contract of $2,380.24, but that the school board refuses to make payment of same because various parties have served it with notice of claims against complainants amounting to $3,-457.19; that it is necessary for the best interests of all concerned that the school board deposit the balance of the contract price and the bond in the registry of this court in order that all parties may interplead and their respective rights be determined with regard to the same. .The bill then sets out the names of the various claimants, and prays that the school board be ordered to account for the balance of the contract price and to deposit it and the bond in the registry of the court, and that all of said claimants be ordered to appear and assert their respective claims. The school board has filed a motion to dismiss the bill on the following grounds: First, that the court is without jurisdiction, ratione materise, because the amount in dispute is the balance due on the contract, $2,380.24; second, that the petitioners are without interest to bring the suit because the owner of the building, to wit, the school board, is the only person authorized to bring such a proceeding under the law of Louisiana; third, that the petition is too vague and indefinite to enable defendant to properly answer. In addition to these grounds, it was suggested in argument that the bill does not show the requisite diversity of citizenship, as the school board and all the material men who have filed claims are citizens of the state of Louisiana. [1,2] It will be noted that by the law of Louisiana (Act 167 of 1912) any person erecting a building in the rural districts, the contract.price of which is over $1,000 and less than $100,000, must require of the contractor a bond, with good and sufficient surety, for not less than one-hálf of the contract price. Any person having a claim against the contractor growing out of the building is required to file a sworn [386] statement with the owner, and at the expiration of 45 days after the completion of the work, if any such claims have been filed and remain unpaid, the owner must file a petition in a court of competent jurisdiction, setting up his own claim against the bond, if he has one, and citing the other claimant's and the contractor and his surety to come in and settle their claims in concurso. Of course, this court would have concurrent jurisdiction with the state courts of such a proceeding if the requisite amount and diversity of citizenship were shown. Under the state of facts disclosed by the bill it was the duty of the school board to have taken the steps required by law long before the bill was filed. It has not done so, and, as plaintiffs had the right to ’compel the school board to perform its legal duty, there can be no objection to the procedure taken herein, as it will have the same effect exactly as if brought by the school board in the first instance. [31 It is true that in this proceeding the plaintiffs can recover the sum of $2,380.24 at most, but that does not necessarily fix the amount in controversy. The bond is for more than $3,000 and the claims filed against it are for more than $3,000. There are many cases holding that separate and distinct demands cannot be joined for convenience to make up the jurisdictional amount; but, while the claims here are separate, they are all necessarily against the bond and pending the concursus proceeding could not be litigated in separate suits. The proceeding is one to prevent a multiplicity of suits. It is for that reason cognizable in equity, and the total amount of the claims filed against the bond may be properly considered the matter in controversy. I am therefore of the opinion that the- necessary jurisdictional amount exists. [4] With regard to the parties, the plaintiffs and the National Surety Company are properly on one side, and on the other side are the school board and the various parties’ who have filed claims against the bond. As thus grouped, diversity of citizenship exists, as there could be no question of personal liability as between the school board and the material men in this proceeding. With regard to the third ground urged, while the bill is inartificially drawn, it substantially sets up the averments necessary to plaintiffs' case and is not demurrable on the ground of vagueness. The motion to dismiss will be denied.