Summary
In City of Hattiesburg v. Cobb Bros. Const. Co., 174 Miss. 20, 163 So. 676, the court said that § 722 Mississippi Code 1942 (appearing as § 2292 Mississippi Code 1930) covered all written contracts.
Summary of this case from Paul O'Leary Lumber Corp. v. Mill Equipment, Inc.Opinion
No. 31854.
October 28, 1935.
1. MUNICIPAL CORPORATIONS.
Money deposited by bidder for municipality's construction contract guaranteeing that it would enter into contract should bid be accepted can be recovered by bidder because of honest mistake in calculation in making bid, provided he gives notice of withdrawal of bid before action is taken thereon.
2. DISCOVERY.
Bill waiving answer under oath held insufficient as bill for discovery in absence of other equity.
3. DISCOVERY.
Bill for discovery must contain sufficient averments of facts to disclose actual existing cause of action, which are as definite as circumstances will permit, showing that matters sought are not within reasonable reach of complainant.
4. DISCOVERY.
Bill for discovery of municipality's advertisement for bids for sewer construction together with correspondence, letters, notice, documents, or other instruments respecting controversy in municipality's possession or control, or that of its officers, held insufficient as bill for discovery, since things for which discovery was sought were public records to which public was entitled to reasonable access.
5. LIMITATION OF ACTIONS.
Six-year statute of limitations covering all written contracts held to cover implied contract provable entirely by writing, although promise to pay is not expressed in writing and writing is not signed by promisor, where promise arises out of writing by implication and all material facts out of which promise arises are provable by writing without break in chain of writings requiring supplementary parol evidence (Code 1930, section 2292).
6. LIMITATION OF ACTIONS.
Implied contract based upon chain of writings in which there is break requiring supplementary parol evidence for proof of contract is governed by three-year statute of limitations covering actions on unwritten contracts (Code 1930, section 2299).
7. LIMITATION OF ACTIONS.
Action to recover money deposited by bidder for municipal sewer construction contract guaranteeing that it would enter into contract upon acceptance of bid commenced more than three years but less than six years after cause of action arose would be barred by three-year statute of limitations applicable to actions on unwritten contracts only in case of oral withdrawal of bid if written record had been kept of proceedings of city's mayor and commissioners in reference to matter (Code 1930, sections 2292, 2299).
APPEAL from the chancery court of Forrest county; HON. BEN STEVENS, Chancellor.
Heidelberg Roberts, of Hattiesburg, for appellant.
Section 2299 of the Mississippi Code of 1930, provides that actions "on any unwritten contract, express or implied," are barred within three years next after the cause of action accrued. The cause of action, if any, in this case accrued either in September or October, 1929, and the suit was not filed until more than five years thereafter. The action is clearly an action on an implied unwritten contract.
Palmetto Fire Ins. Co. v. Allen, 141 Miss. 681, 105 So. 769; Younglove v. Hoburg, 195 Iowa, 281, 191 N.W. 985; Bessler Movable Stairway Co. v. Bank, 140 So. 537, 106 So. 445; Willard v. Doran Wright Co., 1 N.Y. Supp. 588, 48 Hun. 402.
This suit is not and does not purport to be a suit upon any written contract, and if the complainant was ever entitled to any recourse whatsoever insofar as the recovery of the two thousand five hundred dollars in question is concerned, it was because the law implied upon the defendant a promise to repay that which it had received by mistake, thereby constituting the action as one upon an unwritten implied contract.
Musgrove v. Jackson, 59 Miss. 390; Buntyn et al. v. Building Loan Assn., 86 Miss. 454, 38 So. 345; Beck v. Tucker, 147 Miss. 401, 113 So. 209; Warren-Godwin Lbr. Co. v. Lbr. Mineral Co., 82 So. 257.
In order for a writing to be a written contract within the six year statute, it must be a writing evidencing an acknowledgment of indebtedness or promise to pay in such terms as to render any supplementary evidence unnecessary.
Foote v. Farmer, 71 Miss. 148; Wally v. L.N. Dantzler Lbr. Co., 81 So. 489; D.S. Pate Lbr. Co. v. Southern Ry. in Mississippi, 76 So. 481; Federal Land Bank v. Collins, 127 So. 570; Blount v. Miller, 160 So. 598; Gulf S.I.R. Co. v. Laurel Oil Fertilizer Co., 158 So. 779; Hawkins v. Ellis, 168 Miss. 428, 151 So. 569; Galveston H. S.A. Ry. Co. v. Lykes Bros., 294 Fed. 968; Phoenix Lbr. Co. v. Houston Water Co., 94 Tex. 456, 61 S.W. 707.
In view of the fact that the city authorities were criticised in the lower court for pleading the statute of limitations in this action, we call the court's attention to the fact that it was not only their privilege to do so, but their duty.
Trowbridge v. Schmidt, 82 Miss. 475, 34 So. 84.
Another point of law set forth in the answer and decided adversely by the court, was that the bill in this case sought to recover interest on the two thousand five hundred dollars in question. A municipality is not liable for interest in the absence of a contract authorized by statute.
City of Natchez v. McGehee, 127 So. 903.
There are two reasons why the bill is insufficient as a bill for discovery: first, it waives answer under oath.
Griffith's Chancery Practice, sec. 364, page 370.
Second, the information sought by way of discovery is information contained in public records, which are open to the inspection of everyone, including the appellee, and the bill does not charge that appellee had made any effort to find these records or that it had been denied access thereto.
Griffith's Chancery Practice, sec. 430, page 452.
This action is not an equitable proceeding to rescind a contract by reason of mistake, but on the contrary is a common law action for money had and received.
Younglove v. Hoburg, 195 Iowa, 281, 191 N.W. 985.
Stevens Currie, of Hattiesburg, for appellee.
The appellee insists that the three year statute does not apply, and that section 2299 of the Mississippi Code of 1930, has no relevance whatever. It is our position that the six year statute applies.
The obligation in the present case amounts to more than an unwritten implied contract, and is, we insist, if an implied contract at all, one that rests upon written instruments, and one that is therefore governed by the six year statute.
Complainant in the present case is not relying upon the canceled and endorsed check alone, but the check is a mere circumstance, and a mere piece of evidence, which when taken in connection with the bid and all the other documents, we submit, establishes liability on the part of the city.
Counsel suggest that in the event this cause is reversed and remanded, it should be sent to the circuit court, and not to the chancery court. We submit the chancery court is a proper forum. The facts of this case render it peculiarly appropriate for equity jurisdiction. We insist there was no error on the part of the lower court in overruling the demurrer, but if there is, that the cause should be reversed and remanded to the chancery court for an amendment of the bill. It is easily within the contemplation of the bill, if amendment is necessary, to require the defendant's answer under oath to the discovery, and that of course could only be done in a chancery court.
Washington v. Soria, 19 So. 485; Cock et al. v. Abernathy, 28 So. 18; Fowlkes v. Lea, 36 So. 1036; Masonic Benefit Assn. of Stringer Grand Lodge v. First State Bank of Columbus, 55 So. 408; Yazoo Miss. Valley Ry. Co. v. Willis, 71 So. 563; Illinois Central Ry. Co. v. Jackson Oil Refining Company, 71 So. 568.
The three-year statute of limitation (section 3099, Code of 1906, section 2463, Hemingway's Code) applies alone to actions on open or stated accounts not acknowledged in writing, signed by the debtor, and on unwritten contracts expressed or implied, while section 3097, Code 1906 (section 2461, Hemingway's Code), governs among other causes of action written contracts expressed or implied not signed by the debtor.
Blodgett v. Pearl River County, 98 So. 227; DeSoto County v. Wood, 116 So. 738; Milam v. Paxton et al., 134 So. 171; Dunn v. Dent et al., 153 So. 798.
Argued orally by Rowland W. Heidelberg, for appellant, and by George W. Currie, for appellee.
Appellee filed its bill in the chancery court of Forrest county against appellant to recover the sum of two thousand five hundred dollars, and for discovery in aid thereof. Appellant answered the bill, and embodied in its answer grounds of demurrer separately set out as authorized by section 378, Code 1930. The demurrer was overruled, and an appeal granted to settle the principles of the cause.
The bill charged, in substance, the following facts: That on September 12, 1929, appellant advertised for bids from contractors for the construction of certain sewer lines in the city. That appellee, among others, filed a bid for the doing of the work and furnishing the specified materials provided for in the advertisement and plans and specifications on file in the office of the city engineer, and tendered with its bid a certified check in the sum of two thousand five hundred dollars as a guaranty that it would enter into the contract to do the work in the event its bid should be accepted. That by inadvertence and mistake appellee had erroneously calculated the amount of the costs of the work and the materials, and when this was discovered, which was prior to the acceptance of its bid, it notified appellant's mayor and commissioners that it desired to withdraw its bid; that on account of such error it was far too low. That appellee called upon appellant to return its guaranty check, with notice that it would not enter into the contract if its bid was accepted. That appellant declined to return the check, and on October 3, 1929, undertook to accept the bid and award the contract to appellee, which appellee refused to enter into. That on the 17th day of October, 1929, appellant, by ordinance, seized and appropriated to its own use the two thousand five hundred dollars. And in addition, the bill asked that appellant be required to discover and produce a copy of the advertisement for bids, appellee's bid, together with any and all correspondence, letters, notice, documents, or other instruments in appellant's possession or under its control, or in the possession or control of appellant's clerk or mayor and commissioners, "respecting the said advertisement or bid and respecting the controversy herein." The bill waived answer under oath.
There seems to be no controversy between the parties with reference to the proposition that appellee had the right to withdraw its bid before the municipal authorities took any action thereon. A guaranty deposit can be recovered back by the bidder because of an honest mistake in calculation in making the bid, provided he gives notice of his withdrawal of the bid before any action is taken thereon. 44 C.J., p. 107, sec. 2197.
The mooted questions are whether or not the chancery court had jurisdiction, and whether or not the three years' or the six years' statute of limitations applies, the bill having been filed more than three years after the cause of action arose and less than six years.
The sole ground of equity jurisdiction was discovery. The bill is insufficient for that purpose; it states no ground for discovery. In the first place, an answer under oath is waived. Where that is done, there can be no discovery; an answer under oath is essential. If there be no other equity in the case, the jurisdiction fails. Griffith's Chancery Practice, sec. 431. See, also, Dodson v. Hutchinson, 148 Miss. 640, 114 So. 736; Palmetto Fire Ins. Co. v. Allen, 141 Miss. 681, 105 So. 482, 769. There are other requisites for discovery — the bill must contain sufficient averments of facts to disclose an actual existing cause of action, and these averments must be as definite and positive as the circumstances will permit; they must show that the matters sought are not within the reasonable reach of the complainant. Griffith's Chancery Practice, sec. 429. According to the averments of the bill, the things of which discovery is sought are all public records of the municipality, unless appellee's withdrawal of its bid was oral instead of in writing. The public generally is entitled to reasonable access to such records with an opportunity to examine them. It follows from these views that the chancery court was without jurisdiction.
Appellant contends that the three years' statute of limitations applies under the principle that money paid to another by mistake of fact may be recovered in an action for money had and received, citing Bessler Movable Stairway Co. v. Bank, 140 Miss. 537, 106 So. 445, and other Mississippi decisions and decisions from other jurisdictions along the same line. The trouble with that contention is that appellee did not turn over to appellant the two thousand five hundred dollars through mistake. Appellee actually intended to put up that amount as a guaranty of good faith. The mistake occurred back of that; it occurred in the calculation of the costs of materials and the work necessary to do the job; if no mistake had been made in that respect, still the two thousand five hundred dollars would have been put up.
Section 2299, Code 1930, provides that actions on open account or stated account not acknowledged in writing, signed by the debtor, and on any unwritten contract, express or implied, shall be commenced within three years after the cause of action accrued, and not after. Section 2292 provides that all actions for which no other period of limitation is prescribed shall be commenced within six years next after the cause of action accrued, and not after. Section 2292 covers all written contracts. Does it cover an implied contract provable entirely by writing? We think it does, and that this conclusion is supported by Washington v. Soria, 73 Miss. 665, 19 So. 485, 55 Am. St. Rep. 555; Cock v. Abernathy, 77 Miss. 872, 28 So. 18; Fowlkes v. Lea, 84 Miss. 509, 36 So. 1036, 68 L.R.A. 925, 2 Ann. Cas. 466; Masonic Benefit Association v. First State Bank of Columbus, 99 Miss. 610, 55 So. 408; Illinois Cent. R. Co. v. Jackson Oil Refining Co., 111 Miss. 320, 71 So. 568; Blodgett v. Pearl River County, 134 Miss. 816, 98 So. 227; De Soto County v. Wood, 150 Miss. 432, 116 So. 738; Milam v. Paxton, 160 Miss. 562, 134 So. 171.
The promise to pay need not be expressed in writing, nor is it necessary for the writing to be signed by the promisor. However, the promise to pay must arise out of the writing by implication, and, furthermore, the entire material facts out of which the implied promise to pay arises must be provable by writing; it may be one writing or several. If there is any break in the chain of the writings and such break has to be supplied by parol testimony, then the three years' statute applies and not the six years'. Applying those principles to this case: If there was, as required by law, a written record of the proceedings of appellant's mayor and commissioners in reference to this matter, and in addition appellee withdrew its bid in writing, and implied promise to return the two thousand five hundred dollars would arise, provable entirely by writings. As stated, however, a break in the chain — such as appellee's withdrawal of its bid orally and not in writing — would bring into operation the three years' statute instead of the six.
Buntyn v. National Mutual Building Loan Association, 86 Miss. 454, 38 So. 345; Beck v. Tucker, 147 Miss. 401, 113 So. 209; Warren Godwin Lumber Co. v. Lumber Mineral Co., 120 Miss. 346, 82 So. 257; Federal Land Bank v. Collins, 156 Miss. 893, 127 So. 570, 69 A.L.R. 1068; Blount v. Miller, 172 Miss. 492, 160 So. 598, and other decisions of this court referred to by appellant, are not in real conflict with Washington v. Soria and the other cases along that line above referred to. The narrow question is whether all of the material facts out of which the implied promise arises are provable by writing; if they are, the six years' statute applies, if not, the three years' statute. Any break in the writing or writings which is material and provable only by parol brings the three years' statute into operation.
Appellee may or may not on remand be able to make the case under these principles.
Reversed and remanded.