Opinion
22861.
ARGUED FEBRUARY 9, 1965.
DECIDED MARCH 15, 1965.
Equitable petition. Fulton Superior Court. Before Judge Tanksley.
E. T. Hendon, Jr., for plaintiff in error.
Smith, Swift, Currie, McGhee Hancock, Glover McGhee, Donald D. Smith, Luther P. House, Jr., Wendell C. Lindsey, Hansell, Post, Brandon Dorsey, W. Rhett Tanner, John H. Boone, J. William Gibson, contra.
1. The petition did not affirmatively show that the plaintiff was barred by laches.
2. Insolvency of the defendant and inability to respond to such damages as the plaintiff might recover for breach of the contract is ground for equitable intervention.
3. A suit against a principal and surety who are residents of different counties may be brought in the county of either.
ARGUED FEBRUARY 9, 1965 — DECIDED MARCH 15, 1965.
Mechanical Contractors Engineers, Inc. (hereinafter referred to as Mechanical), brought its equitable action in Fulton Superior Court against Concrete Coring Contractors, Inc., a Georgia corporation located in DeKalb County, National Union Fire Insurance Company, a foreign corporation having an office and place of business in Fulton County, and Statham Machinery Equipment Company, a Georgia corporation with its principal office and place of business in Fulton County (the defendants will be referred to as Concrete, National and Statham, respectively).
The allegations of the petition were: that the Beck Company entered into a subcontract agreement with the plaintiff Mechanical, under the terms of a government contract, by which Mechanical furnished the Beck Company a performance and payment bond; that Mechanical further subcontracted with the defendant Concrete, under which agreement Concrete, as principal, and the defendant National, as surety, furnished Mechanical a performance and payment bond; that Concrete agreed to furnish an outside sewer system "except all cast iron pipe required for performance of said work would be furnished and installed by others"; that the subcontract contained an option as to the type pipe material to be used in the sewer system, which option was exercised by Concrete to use corrugated steel pipe for the storm sewer and vitrified clay pipe for the sanitary sewer (as allowed under government specifications); that shortly after the defendant Concrete commenced work a dispute arose; that Concrete contended that the specifications required cast iron soil pipe under roads, hence installment of such pipe was not part of its work since the contract provided cast iron pipe was to be furnished and installed by others; that Mechanical contended the specifications did not require cast iron pipe when optional material was used; that the contract provided factual disputes would be referred to the government contracting officer for resolution; that this was done and the contracting officer resolved the dispute in favor of Mechanical; that Mechanical notified Concrete of the decision and requested it to proceed promptly; that Concrete refused in writing to proceed with its work.
The petition alleged that Concrete defaulted: (1) by failing to perform the work in compliance with the decision, (2) by delaying the work of Mechanical and others by leaving open ditches, (3) by failing to construct headwalls in accordance with specifications, (4) by laying non-specification pipe, (5) by failing to complete the work rapidly as required by the contract; that Mechanical notified Concrete to move from the job site and undertook to perform Concrete's part of the contract in order to fulfill its contract with Beck Company; that Concrete was bound to fully perform its work for $63,885.65; that Mechanical suffered $25,586.44 as damages, the difference between the contract amount and the expense to Mechanical of $89,472.09 to perform the work; that the failure to perform also increased Mechanical's other costs.
The petition further alleged: that on December 11, 1963, Concrete filed suit against Mechanical in the Civil and Criminal Court of DeKalb County (Civil Division) alleging a breach of contract, to which suit Mechanical answered and filed a cross-action; action; that Mechanical does not have an adequate remedy at law; that on September 11, 1964, Mechanical discovered several unsatisfied judgments against Concrete which were entered on the general execution docket from June 5 to August 25, 1964; that Concrete is insolvent and unable to respond to any judgment in the DeKalb court; that, although National is a joint obligor and equally liable, it is not a party in the DeKalb court and can not be compelled to become one; that a judgment in favor of Mechanical against Concrete would not be binding on National, the surety, and Mechanical would be exposed to the inconvenience and hazard of another suit; that the defendant Statham informed Mechanical that Concrete owes it $1,140.10 for rental equipment and that in defense of the suit Mechanical is entitled to credit or setoff the amount of all valid claims against Mechanical's payment bond caused by Concrete's non-payment of bills; that such defense is not available in DeKalb and such court can not grant an injunction to prevent a multiplicity of suits, order a proceeding in the nature of interpleader, nor mould its decrees to give full and complete justice and meet the exigencies of this case; that the demands of the parties arise out of the same transaction; that the plaintiff will suffer irreparable injury if the trial be held in the DeKalb court since the rights of Mechanical and Concrete will be determined but other parties' rights, although inextricably interwoven with theirs, will not be adjudicated and Mechanical will be exposed to a multiplicity of suits; that unless a court of equity intervenes Mechanical will be without an adequate remedy at law, will be irreparably damaged and a multiplicity of suits and circuity of actions will result.
The prayers were: that Concrete be temporarily and permanently enjoined from further prosecution of the suit in DeKalb; that all the defendants be temporarily and permanently enjoined from instituting action against the plaintiff and that they be required to set up in this case all claims they may have against the plaintiff; that the court take jurisdiction of the entire controversy, direct the parties to set up their claims or otherwise join issue if they so desire and that the several claims or rights of all parties at interest be considered and adjudicated and their respective rights enforced by proper order and decree.
The petition was filed on September 16, 1964.
The defendant Concrete demurred on the following grounds: that the petition set forth no cause of action either in law or equity; that the petition shows on its face that the plaintiff has an adequate and complete remedy at law in the case in the DeKalb court; that the petition shows on its face that the Fulton Superior Court is without jurisdiction since no party defendant against whom substantial relief is sought is a resident of Fulton County.
The trial judge entered an order which overruled the demurrers and granted the plaintiff's prayers for temporary injunction. From the adverse judgment the defendant Concrete excepted and assigns error. It brings the case to this court for review naming the plaintiff Mechanical and the defendant National and Statham as defendants in error.
In its brief to this court the defendant Concrete, the plaintiff in error, makes no argument concerning the grant of the injunction and appears to have abandoned ground 3 of the demurrers since it only argues that no cause of action is set forth because the petition shows on its face that the plaintiff is guilty of laches (ground 1) and that the plaintiff has an adequate remedy at law (ground 2). However, National, one of the defendants in error, in its brief urges that ground 3 of the demurrers, that the Fulton Superior Court is without jurisdiction, should have been sustained. Thus, in this opinion we pass upon the three grounds of demurrer.
1. While a general demurrer asserting that no cause of action is set forth does not raise the question of whether the plaintiff is barred by laches, Pittman v. Pittman, 196 Ga. 397, 412 (6) ( 26 S.E.2d 764), Hunnicutt v. Archer, 163 Ga. 868 (1), 870 ( 137 S.E. 253), in the present case it appears that the plaintiff was not guilty of laches. The petition affirmatively shows that suit was brought well within the statute of limitation and within a few days after evidence of Concrete's insolvency was discovered. While we give full recognition to the maxim "that equity aids the vigilant, not the slothful," Raines v. Clay, 161 Ga. 574, 578 ( 131 S.E. 499), there is no showing of any lack of diligence on Mechanical's part nor that it, in the exercise of ordinary prudence, might have ascertained the facts at an earlier time. Furthermore, the record does not disclose such delay as would work hurt or inconvenience to any defendant nor act to obscure the truth or render its ascertainment more difficult. Cooper v. Aycock, 199 Ga. 658, 666 ( 34 S.E.2d 895); Henderson v. Henderson, 219 Ga. 310 (6) ( 133 S.E.2d 251).
2. We now consider the question as to whether the plaintiff has an adequate remedy at law. The rule is: "A remedy at law, to exclude appropriate relief in equity, must be complete and the substantial equivalent of the equitable relief. It is not enough that there is a remedy at law. It must be plain and adequate, or, in other words, as practical and as efficient to the ends of justice and its prompt administration as the remedy in equity." Atlantic C. L. R. Co. v. Gunn, 185 Ga. 108, 110 (3) ( 194 S.E. 365). Here the plaintiff alleged the defendant Concrete owed it in excess of $25,000 as damages for breaching the parties' contract and that Concrete was insolvent. In these circumstances it is apparent that, as alleged in the petition, Mechanical would be unable to satisfy any judgment it obtained against Concrete in the DeKalb court.
Insolvency of the defendant and inability to respond to such damages as the plaintiff might recover for breach of the contract is ground for equitable intervention. Tanner v. Campbell, 182 Ga. 121, 123 ( 184 S.E. 705). By bringing in the surety whose principal was insolvent the plaintiff would be able to obtain full relief. Clearly, the plaintiff's legal remedy would not be complete or as effective and efficient to the ends of justice as that which could be afforded by a court of equity. Code § 37-120. Ford v. Finney, 35 Ga. 258, 261.
3. The last ground of the defendant Concrete's demurrer is: "Defendant demurs generally to said petition upon the ground that said petition shows upon its face that the Superior Court of Fulton County is without jurisdiction in said matter, said petition showing that no party defendant against whom substantial relief is sought is a resident of Fulton County, Georgia." The petition alleges the defendant National, a resident of Fulton County, was surety on a performance bond given by Concrete to the plaintiff, a copy of which is attached to the petition. The suit is, according to the averments of the petition, brought to enforce the obligations of this bond and for the recovery of such sums as may be due the plaintiff under the terms of the same. Art. VI, Sec. XIV, Par. IV of the State Constitution ( Code Ann. § 2-4904) provides: "Suits against joint obligors, joint promissors, copartners, or joint trespassers, residing in different counties, may be tried in either county." It is apparent that the Superior Court of Fulton County had jurisdiction of National, the resident defendant, and of the defendant Concrete.
It is provided by a statute of the State, Code § 37-901, and held by this court, Latham v. Fowler, 192 Ga. 686, 690 (1) ( 16 S.E.2d 591), that legal and equitable cases may be joined in the same suit. Had there been a demurrer that pointed out that the Superior Court of Fulton County only had jurisdiction of the resident defendant National for the purpose of granting legal relief against such defendant and showing the equitable features of the case should be eliminated, the question presented for consideration might have been different, Cooper v. Oglethorpe Savings c. Co., 147 Ga. 570 ( 94 S.E. 1006), but there was no such demurrer.
The petition was not subject to any of the grounds of demurrer.
Judgment affirmed. All the Justices concur.