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(Miss., 112 So. 469.)

entailed by failure to so contract as to relieve himself from liability.

Counsel for appellants argue very forcibly and plausibly that the agreement on the part of the owner to carry insurance amounted to an exception to the general rule which we have stated. In the case of Piaggio v. Somerville, 119 Miss. 6, 80 So. 342, Chief Justice Smith very clearly stated these exceptions where he said: "There are, however, certain classes of events the occurring of which are said to excuse from performance because "they are not within the contract,' for the reason that it cannot reasonably be supposed that either party would have so intended had they contemplated their occurrence when the contract was entered into, so that the promisor cannot be said to have accepted specifically nor promised unconditionally in respect to them. Baily v. De Crespigny, L. R. 4 Q. B. 185, 15 Eng. Rul. Cas. 799. These three classes are: First, a subsequent change in the law, whereby performance becomes unlawful. Baily v. De Crespigny, L. R. 4 Q. B. 180, 15 Eng. Rul. Cas. 799; Heart v. East Tennessee Brewing Co. 121 Tenn. 69, 19 L.R.A. (N.S.) 964, 130 Am. St. Rep. 753, 113 S. W. 364. Second, the destruction, from no default of either party, of the specific thing, the continued existence of which is essential to the performance of the contract. Taylor v. Caldwell, 3 Best & S. 826, 122 Eng. Reprint, 309, 6 Eng. Rul. Cas. 603; Dexter v. Norton, 47 N. Y. 62, 7 Am. Rep. 415. And, third, the death or incapacitating illness of the promisor in a contract which has for its object the rendering by him of personal services. Robinson v. Davison, L. R. 6 Exch. 269; Smith v. Preston, 170 Ill. 179, 48 N. E. 688."

Applying these exceptions to the

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sible the obligation of the contractor to rebuild the house after destruction, nor can it be said that the fire insurance provision invokes the exception "that the destruction from no default of either party of the specific thing, the continued existence of which is essential to the performance of the contract." It might be said on a casual reading that this building was destroyed by fire, and therefore the continued existence of that which is essential to the performance of the contract was essential and did apply. But there was no building in existence when the parties contracted originally, and the contract undertook to create that which did not exist before, and therefore that which he undertook and partially created was not originally essential to the performance of the contract, nor can it be said that the carrying of fire insurance has any relation to this exception. The application of this exception to the rule is illustrated in the books, as where a contractor undertakes to repair a building already in existence, and that which was in existence at the time the contract was entered into is destroyed, by fire, or otherwise, then this exception to the general rule is applicable because that upon which the contractor depends to add to or repair is nonexistent.

Another illustration is where a hotel building existed, and the contractor agreed to build an annex thereto, and before such annex was completed the hotel and annex were destroyed by fire. Then the exception applies, and the contractor is under no duty to rebuild the annex, because that to which it was to be attached has been destroyed and the contractor is thus relieved; so far as he is concerned an impossibility has arisen.

As to the third exception, the death or incapacitating illness of the promisor does not appear here, nor does it appear that there was any contract for personal services, as contemplated by this exception. No case is cited in the extensive brief and argument upon which to

predicate an exception to the general rule, and we do not think the agreement of the parties to insure the building provided for in the contract comes within the general rule or the exceptions.

Counsel argues that because the building partially created was destroyed by fire, being insured at the time, this would relieve the contractor and place him within the second exception quoted, supra. To our minds, the fact that the parties agreed to insure the house is an additional reason for saying that said parties contemplated a completed building, and a rebuilding of said house in case of its destruction by fire. What we have said, supra, applies to the case cited by appellants of Gulf & S. I. R. Co. v. Horn, 135 Miss. 804, 34 A.L.R. 814, 100 So. 381.

Under this head, counsel seems to argue that, because the amount of insurance carried by the owner, $12,500, was not sufficient to rebuild the house, as shown by the allegations of the bill, therefore the owner took the risk, and, so far as the contractor is concerned, when the owner assumed the risk, the surety and the contractor were relieved from the strict performance of the contract, and relied upon the case of Gallagher v. St. Patrick's Church, 45 Neb. 535, 63 N. W. 864, in which case there was a contract to build, a bond executed for the erection and completion of the building by the contractor, in which contract it was stated that "the owner, shall protect by insurance to cover its interest when payments have been made to contractor." The surety interposed the defense that the owner had failed and neglected to insure as provided in the contract. In passing upon this question, the court there said that the church never carried over $10,000 insurance on its property, and at the date of the fire the interest of the church in the property was $14,489.59, which interest was greater than the amount of its claim against the surety company. The court held that in that event the

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failure of the church to keep said church insured to the extent of its interest therein was a complete defense for the sureties on the bond of the contractor. It was argued on behalf of the church that the amount of insurance in effect on the property was as much as any responsible insurance company would insure the property for, and the court said: "We do not think this reply a good one in this respect. The church unconditionally contracted to insure the building to the extent of its interest. Having made this agreement, it was bound to perform it; and the fact that it was unable to procure procure insurance companies to write insurance on the building to the extent of its interest therein does not relieve it from the performance of its agreement. Beebe v. Johnson, 19 Wend. 500, 32 Am. Dec. 518."

Let it be remembered in the instant case that the contract price for the erection and completion of this building was $9,285 and the in surance carried by the owner was $12,500. The fire occurred November 3, 1924, and thereafter it cost more than the amount of the insurance carried to rebuild the house according to the original contract. In the light of this statement, upon demurrer, could any court say that $12,500 was not adequate insurance so far as the surety and contractor were concerned, and that it did not protect, in every way, their interest as well as the owner's as appears from the allegations of the bill? Also let it be remembered that in the St. Patrick's Church Case, cited supra, the owner contracted with the builder that it would carry insurance to the extent of its interest, and the facts found by the court show that the church did not carry insurance to the extent of its interest; but no such state of facts is shown in the case at bar, because the contract in this case did not provide, as will be seen above, that the owner would carry insurance to the extent of her interest, but only provided that the building should be insured. A reasonable construction

(Miss., 112 So. 469.)

of that clause in the contract would be that it would be insured for its value, and to the extent of the amount of the contractor's investment therein. In the instant case, if there had been inserted in the contract a clause that the owner should carry insurance on the building to the extent of her interest, then it could not be declared, as a fact, that $12,500 insurance on the building, while the record shows it cost, when completed, about $10,250, was a failure to comply with the insurance feature of the contract. It will also be noted that in the St. Patrick's Church Case, cited, supra, the owner not only failed to insure to the amount of payments made by the contractor, but made no provision for its interest in the building.

We hold that nothing in this bill contains any statement that indicates that this building here being considered was not fully insured according to the terms of the contract. No failure of duty in this respect is shown upon the face of the bill, but, on the other hand, it is alleged that every detail of the contract, in all respects, was fully carried out.

Third. Next to be considered are the fifth and eleventh grounds of demurrer, which seem to challenge that the contractor owed and had not paid his pro rata part of the fire insurance premium. The court correctly overruled these two grounds


of demurrer because they were general and did not go to the whole bill, and as to the argument of counsel that the provision for insurance together with the collection thereof by the owner was in lieu of completing his contract, we think that has already been considered and disposed of.

Fourth. The twelfth ground of demurrer is addressed to only a part of the bill, and was properly overruled, as we construe that demurrer to be special and to attack the right of the owner to bring in the materialmen under the terms of chapter 128, Laws of 1918, and will be considered hereafter.

Fifth. The sixth ground of de

murrer is that the bill and exhibits show that complainant, under the contract, was to retain 15 per cent of the contract price for the benefit of the surety, and to insure completion of the contract, and the bill further shows that complainant did not perform this condition of the contract, so that in this defendant is relieved of further liability on his contract. The feature of the contract to which appellant alludes is as follows: "It shall be the duty of the owners to pay to the contractor not to exceed 85 per cent of the value of the materials delivered on the site, and 100 per cent of the pay rolls on the building every week after the first materials delivered or the first work done. These amounts are to be ascertained in the manner prescribed under the head, 'Duties of the Contractor.' When the building is complete and accepted the owners. shall pay the contractor the remainder of the contract price that may be due him. It is agreed that the amount reserved shall be held by the owner to protect him against all damages."

The bill charges, as to this feature, that up to the date of the fire, the owner had complied in strict accordance with the contract as to labor and material and the specified price therefor.

In the first place, it is obvious that the demurrer did not accurately state the contract. This contract does not provide for the retention of 15 per cent of the contract price, and it cannot be distorted into meaning that. It distinctly stipulates on the other hand, that the owner is permitted, under the contract, and bound to pay as "progress" money, not to exceed 85 per cent of the materials delivered on the site and 100 per cent of the pay rolls. It is alleged also in the bill. that there remains to be paid for material one-half of the contract price of the completed building, $4,140, and there is no allegation as to the amount of the weekly pay rolls, but it is obvious that the rule in the case of Picard v. Shantz, 70

Miss. 381, 12 So. 544, cannot be applied here, unless it be shown or proven that the contract was not observed by the owner in the matter of payments and that overpayments

-sufficiency of allegations.

were made to the contractor. The bill shows to the contrary. This question will be more properly raised, however, as a matter of defense in the case, if it should develop on the trial of the case that overpayments had been made. Then the chancellor will apply the rule in the Picard v. Shantz Case, supra.

Counsel cites other cases wherein there is a specific contract for "progress" payments and for specific retention of 15 per cent. Such is not the contract before us, and these authorities have no application to the case at bar.

Sixth. Special demurrers 2 and 3 challenge the right of the owner to charge the contractor and the surety company with the amount paid the supervising architect for the erection of the second building, and also the fair rental value of the premises for failure to deliver within a reasonable time the completed building.

In a suit against a surety and contractor to require performance of a building contract where the building was to be completed, and the performance of the contract was guaranteed by the surety company, and there was a breach of the contract on the first building being destroyed, the contract was thereby breached, and reasonable fees for the supervision of the construction of a new building are allowed. 9 C. J. 815 et seq., and authorities there cited. We think also that loss of rents by the owner should be recoverable for such rea

Damagesbuilding contract-reconstruction-fee for supervision.

-building contract-destruction-loss of rents.

sonable time after the time the building should have been completed under the contract, as will permit the owner to complete the building,

provided he does so promptly, and within a reasonable time. 9 C. J. 812.

The owner asserted in her bill that she was entitled to retain the amount of excess insurance effected and collected above the costs of the destroyed building belonging to her; the special demurrer challenged this and asserted that, as a matter of law, the contractor and his sureties were entitled to this money and to have it applied to the costs of the new building if same was demanded under the contract. The chancellor

sustained the con- Insurancetention of the con- building contractor and sus- tracts-right to surplus. tained the special demurrer. The conclusion of the chancellor was correct.

The case of Anderson v. Shattuck, 76 N. H. 240, 81 Atl. 781, is not authority here, for the reason that under the contract there in issue, the owner was not entitled to demand a new building for the reason that an annex to an existing hotel was contracted to be erected, and the partially constructed annex and the old building were both destroyed, and the annex could not be rebuilt at the expense of the contractor. Here in this case the owner contends that he is entitled to a new building as well as the excess of insurance arising from the old building. That would be inequitable and unjust. The maxim, "he who seeks equity must do equity," applies here, and the said excess insurance must be applied to the erection of the new house. She cannot "eat the cake and have it too."

Coming now to the appeal of the surety company from the order overruling the demurrer to the cross bill of the materialmen, which we conceive mainly involves § 3, chap. 128, Laws of 1918, reading as follows: "That when any contractor or subcontractor entering into a formal contract with any person, firm or corporation, for the construction of any building or work or the doing of any repairs, shall enter into a bond with such person, firm or cor

(— Miss. —, 112 So. 469.)

poration guaranteeing the faithful performance of such contract and containing such provisions and penalties as the parties thereto may insert therein, such bond shall also be subject to the additional obligations that such contractor or subcontractor, shall promptly make payments to all persons furnishing labor or material under said contract; and in the event such bond does not contain any such provisions for the payment of the claims of persons furnishing labor or material under said contract, such bond shall nevertheless inure to the benefit of such person furnishing labor or material under said contract, the same as if such stipulation had been incorporated in said bond; and any such person who has furnished labor or materials used therein; for which payment has not been made, shall have the rights to intervene and be made a party to any action instituted on such bond, and to have his rights adjudicated in such action. and judgment rendered thereon subject, however, to the priority of the rights or claim for damages or otherwise, of the obligee. If the full amount of the liability of the surety thereon is insufficient to pay the full amount of said claims and demands, then, after paying the full amount due the obligee, the remainder shall be distributed pro rata among said. interveners. The bond herein provided for may be made by any surety company authorized to do business in the state of Mississippi."

Section 1 of the act fixes a lien for materialmen and subcontractors for material furnished or labor performed upon notice of balance due contractor and all parties interested sharing pro rata therein; in short, amends § 2434, Hemingway's Code of 1906 (§ 3074), to conform to this court's construction of § 3072, Code of 1906.

Section 2 of the act makes an assignment by the master workmen. subordinate to the rights of the above class of subcontractors, materialmen, etc., as well as the owner, and provides that § 2 is not in force. 53 A.L.R.-7.

in cases where the bond provided for in § 3 is given. The other sections of the act provide the procedure.

The cross bill, as finally amended, set up claims for material furnished and labor done on the building of Mrs. Edna Earl Parsons, the owner, under the contract and bond here in controversy. They bottomed their claims, in separate cross bills, upon this chapter above cited. The demurrer asserted that said act is discriminatory, unconstitutional, invalid and void: First, because it violates the 14th Amendment to the Constitution of the United States, § 1, in that it deprives appellant and other citizens of their liberty and property without due process of law; second, it abridges the privileges and immunities of appellant and others; third, it deprives appellant of its liberty and property without due process of law; fourth, it denies appellant the equal protection of the law; fifth, it is violative of that portion of § 2, art. 6, of the Constitution of the United States which makes that instrument the supreme law of the land, and that it violates the sections of the state and federal Constitutions which prohibit any law impairing the obligation of a contract, and violates § 24 of the state Constitution.

We eliminate from consideration as not raising any serious question all of the alleged violations of state and Federal Constitutions except the 14th Amendment to the Constitution of the United States, for the reasons assigned, as above stated. The real question here presented is whether or not, under the 14th Amendment, the state is authorized, under its police power, to regulate building contracts, with the manifest and obvious purpose of protecting therein the class denominated as materialmen and laborers.

It is clear that as to contracts entered into subsequent to its enactment, chapter 128, Laws of 1918, is read into the contract. Western Assur. Co. v. Phelps, 77 Miss. 625, 27 So. 745.

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