Opinion
21934.
ARGUED JANUARY 15, 1963.
DECIDED FEBRUARY 7, 1963. JUDGMENT ADHERED TO ON REHEARING FEBRUARY 25, 1963.
Equitable petition. Bibb Superior Court. Before Judge Bell.
Robert D. Horne, Roy B. Friedin, Harris, Russell Watkins, for plaintiff in error.
Jones, Sparks, Benton Cork, Frank C. Jones, contra.
Where, in response to a demand by the obligee in a completion bond and a bond to insure payments for labor and materials, made upon the surety in such bonds, the surety failed to comply and filed suit in Bibb County against its principal to compel him to perform his duties, to complete the building and pay claims for labor and materials, and to deposit in its favor a stated sum, and joined the obligee, a resident of Crisp County, therein, seeking to compel it to assert its claim for damages against the principal and to pay into court the balance of the contract price over and above the amount of damages, and showing that the building was not complete and bills for labor and materials had not been paid, the plea to the jurisdiction filed by the obligee was meritorious since no substantial equitable relief was prayed against both the resident and nonresident, and it was reversible error to overrule the plea to the jurisdiction.
ARGUED JANUARY 15, 1963 — DECIDED FEBRUARY 7, 1963 — JUDGMENT ADHERED TO ON REHEARING FEBRUARY 25, 1963.
National Surety Corporation executed a completion bond as surety for the builder, W. W. Hutchinson, in which I. Perlis Sons, its owner, is the obligee. The obligee demanded of the surety that it complete the structure; also that it pay for labor and materials which it was obligated to do under another bond. Confronted with these demands, the surety, without performing its duty under said bonds and without denying liability, instituted this action against Hutchinson in Bibb County and joined the owner-obligee who resides in Crisp County. The primary purpose of the suit is to compel Hutchinson to deposit $45,000 for the benefit of the surety and to compel him to perform his duties to the owner and creditors, some of whom have filed liens against the owner's property. None of the above is the concern of the owner since the surety is obligated to perform if Hutchinson, the principal in the bonds, fails. The only excuse for joining the owner is that it has a claim for damages against Hutchinson and refuses to pay the balance of the contract price amounting to $23,524.91 until the work is completed and bills for materials and labor paid, and it is sought to have the claim of damages adjudicated in this action. The owner filed a plea to the jurisdiction. General and special demurrers were also filed, and after a hearing in which stipulations were made as to the nonresidence of the defendant-partnership, the plaintiff in error herein, the court overruled the plea to the jurisdiction and overruled the general demurrers and sustained only one of the numerous special demurrers. The exception is to the judgment overruling the plea and the demurrers.
All suits in equity shall be filed in the county of the residence of one of the defendants against whom substantial equitable relief is prayed. Code Ann. § 2-4903 (Const. of 1945; Ga. L. 1945); Code § 3-202. This law has been uniformly construed to mean that in order to join a nonresident in such a suit, substantial equitable relief must be common to him and the resident defendant. This means that regardless of substantial relief sought against the resident defendant and other substantial equitable relief sought against the nonresident, the nonresident can not be joined. Sayer v. Bennett, 159 Ga. 369, 370 ( 125 S.E. 855); Fowler v. Southern Airlines, 192 Ga. 845 (5), 851 ( 16 S.E.2d 897); Grace v. Interstate Bond Co., 193 Ga. 810 ( 20 S.E.2d 131); Pearson v. Walker, 218 Ga. 469 ( 128 S.E.2d 328). Thus some of the prayers for substantial equitable relief must be common to both the nonresident and the resident defendant in order to obtain jurisdiction of the nonresident defendant. Rylee v. Abernathy, 210 Ga. 673 ( 82 S.E.2d 220); Persons v. Dallas, 178 Ga. 778, 783 ( 174 S.E. 699); Empire Land Co. v. Stokes, 212 Ga. 707 (3, 4), 710 (3, 4) ( 95 S.E.2d 283).
This court in Hayes v. Hayes, 214 Ga. 624 ( 106 S.E.2d 790), stated, we think incorrectly, that the ruling in Sayer v. Bennett, 159 Ga. 369 (3), supra, "To give a court of equity jurisdiction of a non-resident defendant, such substantial relief must be such as can be jointly enforced against the resident defendant and the non-resident defendant," was obiter dictum and unnecessary to a decision. The exception there was to a judgment sustaining a ground of a demurrer which challenged the jurisdiction, and the ruling was on that exception. Furthermore, when the court was found to have no jurisdiction, this ended the case and rendered rulings as to misjoinder obiter dicta. The ruling in the Hayes case also treated the ruling in Rylee v. Abernathy, 210 Ga. 673 (1), supra, as obiter dictum, that headnote being: "In order to obtain jurisdiction of a defendant in a different county from that in which he resides, some of the prayers of the petition must be common to both the nonresident and the resident defendants." As to this ruling it was said the misjoinder would have required a dismissal. This statement overlooked the fact that we were there deciding an exception to a ruling striking the plea to the jurisdiction filed by the defendant Thomas W. Rylee. This want of jurisdiction once established, any ruling on the merits of the pleadings as to multifariousness would have been obiter dictum. We believe this demonstration of the incorrectness of apparent criticism of the two cases should be made to remove doubts as to their soundness caused by the reference thereto in Hayes v. Hayes, 214 Ga. 624, supra. We again assert that an indispensable prerequisite to joining a nonresident in an equity suit is a prayer for substantial equitable relief which is common to the resident and nonresident defendants. Unless the two can be thus connected, they are independent and separate suits which must, under the Constitution ( Code Ann. § 2-4903; Const. of 1945; Ga. L. 1945) and statute ( Code § 3-202), be brought against each defendant in the county of his residence.
A mere glance at the allegations and prayers of this petition reveals that the entire relief sought against the resident defendant is strictly as to matters between the petitioner and that defendant. This nonresident owner cares not which of them does the things that the plaintiff seeks to compel the resident defendant to do. The petitioner makes no claim against the owner, and seeks only to compel it to litigate its claim against Hutchinson for damages and pay into court all sums over and above these damages due on the contract. When the surety performs its duties by completing the building and paying for labor and materials, it can then sue the owner in Crisp County where it resides for any unpaid balance. In that suit, the owner could set off any claim it has for damages, and a judgment thereon would finally conclude the entire matter, save a settlement between the surety and its principal. There is neither law to authorize nor an actual need for making the nonresident partnership a party to this suit in Bibb County. The bond does not require the surety to perform after it prosecutes litigation against its principal to compel him to perform, but rather its duty to perform arises instantly upon the failure of the principal to perform. The surety seeks to impose upon the owner the expense of litigation in order that it might avoid doing its duty, although in doing so the owner is denied the protection which the bonds guarantee.
The essential requisites to subjecting this nonresident to the jurisdiction being lacking, the plea was valid, and it was error to overrule the same. This ruling renders it unnecessary to rule upon the demurrers since all further proceedings become nugatory.
Judgment reversed. All the Justices concur.
ON REHEARING.
The motion asserts that the construction contract is the nexus common to all the parties and that since the defendant contractor, Hutchinson, had in his answer denied execution thereof, all the parties were interested therein. We can not accept this reasoning for the reason that the petitioner does not remotely seek even by its amendment — which recites what Hutchinson had pleaded — to question the validity of the contract or seek a judgment thereon. We considered this matter before rendering judgment. On rehearing we adhere to our original opinion and judgment.