Court Opinion

ID: 3538072
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:50:45.047667+00
Date Added: 2024-06-11T14:21:18.957685
License: Public Domain

SEPARATE CONCURRING OPINION.
In concurring in the well-considered opinion of Special Judge MAYFIELD herein, I think it is proper that I should add a few observations of my own.
The facts are clearly stated in the foregoing opinion and need not be restated here.
The whole controversy in this case in so far as the duty of this court to determine the matter is concerned revolves around the decisions of our Supreme Court in Camdenton Consolidated School Dist. No. 6 of Camden County ex rel. W.H. Powell Lbr. Co. v. New York Casualty Co., 340 Mo. 1070, 104 S.W.2d 319, and School Dist. No. 18 of Caruthersville v. McClure et al. (Mo.), 224 S.W. 831. They will be referred to as the Powell case and the McClure case, respectively. It is, of course, the plain clear duty of this court, in applying the law to the facts, to follow the latest decision of our Supreme Court on any questions of law or equity where such decision is found to have been based upon a state of facts similar to the facts in the case to be decided by this court. [Constitution of Missouri, Article VI, Amendment of 1884, Section 6.]
Respondent herein contends that the Powell case and the McClure case, supra, are analogous on their facts to the facts in the case at bar; and that the doctrine applied by our Supreme Court in those *Page 641 
cases is controlling in the decision herein. In the Powell case the Supreme Court referred to the McClure case with approval, and it may be said that the Powell case is the main reliance of respondent herein. In that case a principal contractor had given a performance bond for the construction of a school building. The Powell Lumber Company sold material to the contractor who had given the bond. The material was actually used in the construction of the building. In addition to furnishing lumber, the Powell Lumber Company had advanced to the contractor cash to be used and which was used by the contractor in the payment of labor bills on the school building. The lumber company and the contractor had made an arrangement whereby the contractor was to repay the lumber company advancements made out of payments received by the contractor from the school district under the provisions of his contract with the school district. Under the arrangement made, the contractor paid the lumber company the sum of $5148.60. The lumber company had advanced $5042.08 for the payment of labor bills. The lumber company, with full knowledge of the fact that the payment it received, namely, $5148.60, was money paid to it by the contractor out of money received by him from the school district under his contract for the erection of the school building, applied that amount in payment of the cash advance account and credited the remainder of $106.52 to the material account. The lumber company sued the contractor and the surety on the performance bond for the balance due on its material account. There was a judgment for plaintiff therein, and on appeal the surety contended that the amount of cash advanced by the Powell Lumber Company to the contractor was merely a loan and that it created only an indebtedness of the contractor to the Powell Lumber Company, and that the Powell Lumber Company, therefore, could not legally receive funds from the contractor which the contractor had in turn received in payment for work done on the school building and apply such money in extinguishment of such indebtedness, but that the Powell Lumber Company was legally and equitably bound to use the money so received, with knowledge of its source, to the extinguishment of the sum due on the material account. It was further contended by the surety in that case that the Powell Lumber Company had in fact been paid for the material furnished and had no cause of action therefor against the surety on the performance bond.
The Supreme Court held that the Powell Lumber Company was entitled to recover from the surety the amount due it for the materials furnished and used in the construction of the school building, and, in passing on this phase of the case, said:
"Appellant's position on this phase of the case is that though it be held liable as surety for the payment of labor performed and material used in the construction of the building and though money *Page 642 
advanced to the contractor by the Powell Company was advanced for the purpose and actually paid out for labor and wages, which, if not paid, appellant would be liable for, nevertheless the total sum so advanced by the Powell Company and paid out for labor should be considered and treated merely as a loan to the contractor and a debt of the contractor to the Powell Company without regard to how or for what purpose it was advanced and used; that the Powell Company knew that the payment made to it, and out of which it discharged its account for cash advanced to pay labor accounts, was money paid to the contractor under and by virtue of the contract and was therefore a fund which appellant as surety had an equitable right to have applied to the extinguishment of its liability; but that the Powell Company applied it on another debt, that is the debt of the contractor to it for money loaned to him; and that it (appellant) is equitably entitled to have credit on the material account in the full amount of the payment so made to Powell Company by the contractor, its principal. If this contention be allowed, appellant would be relieved of liability in that amount for labor and also escape liability in the same amount for material.
"We are inclined to the opinion that under the facts of this case it is, in effect, immaterial to which account the payment was credited, since it is shown, and the referee's finding is conclusive thereof, that the cash advanced (except that paid out for premium on bond) was used solely to pay for labor performed in the construction of this building and for no other purpose, and that all the material charged on the material account allowed by the referee was furnished for and used in this building and appellant surety was liable for both labor and material amounts." [Camdenton Consol. School Dist. No. 6 v. New York Cas. Co.,340 Mo. 1070, 1086, 1087, 104 S.W.2d 319, 328.]
Respondent earnestly insists that inasmuch as there was conclusive evidence in the case at bar to sustain the finding of the trial court that the amount which respondent seeks to recover herein was all actually used in the payment of material and labor and consumed in the construction of the nurses' home at Mexico, which was the subject-matter of the bond herein, this case must be held to come clearly within the doctrine of the Powell case,supra; and that respondent is therefore entitled to recover.
It would seem at first blush that respondent's contention herein ought to be sustained on the authority of the Powell case, particularly in view of the language of the Supreme Court in the paragraph of its opinion last above quoted. However, it is a well-established principle of law in this State that language in opinions of courts must be read and interpreted with reference to the facts and issues involved therein. [Keeton v. Gaiser,331 Mo. 499, 55 S.W.2d 302; Powers v. Kansas City Pub. Serv. Co.,334 Mo. 432, 66 S.W.2d *Page 643 
840; State ex rel. Woodmansee v. Ridge, 343 Mo. 702,123 S.W.2d 20.] As pointed out in the opinion of Special Judge MAYFIELD herein, there is a distinction between the Powell case and the case at bar on the conceded facts which, I am convinced takes this case out of the doctrine of the Powell case.
In view of the fact that the Supreme Court itself, in another part of its opinion in the Powell case, clearly stated facts which showed that there were both allegations in the petition and evidence to prove that there was a breach of the building contract therein (thereby giving rise to liability on the bond), I do not believe that it can properly be said that the language used by the Supreme Court in reaching its conclusion was intended to apply to a case such as this where there is neither allegation nor proof of the breach of the building contract. On the contrary, we must, under the rule above mentioned, limit the application of the language mentioned to facts and issues such as were before the court in that case.
In the Powell case, as heretofore pointed out, there was a breach of the building contract in that the contractor failed to pay the lumber company's account for materials in full. That failure was alleged in the petition and the proof sustained the charge. In the McClure case, supra, the petition alleged the conditions of the contract and bond and charged breaches thereof and the proof sustained such charges. In each case, therefore, there was both allegation and proof of breaches of the contract giving rise to liability on the bond involved therein; whereas, in the case at bar there is neither allegation nor proof of any breach of the builder's contract which would give rise to a liability on the bond, but, on the contrary, it is both alleged and proved that the building contractor performed all the conditions of the building contract, hence there were no facts pleaded or shown as a foundation for liability on the surety bond.
I therefore concur in the opinion of the Special Judge herein.