Morgan v. United States Fidelity & Guaranty Co.

191 So. 2d 851, 1966 Miss. LEXIS 1230
CourtMississippi Supreme Court
DecidedNovember 7, 1966
Docket44113
StatusPublished
Cited by19 cases

This text of 191 So. 2d 851 (Morgan v. United States Fidelity & Guaranty Co.) is published on Counsel Stack Legal Research, covering Mississippi Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Morgan v. United States Fidelity & Guaranty Co., 191 So. 2d 851, 1966 Miss. LEXIS 1230 (Mich. 1966).

Opinion

191 So.2d 851 (1966)

E.E. MORGAN
v.
UNITED STATES FIDELITY & GUARANTY COMPANY.

No. 44113.

Supreme Court of Mississippi.

November 7, 1966.

*852 Cox, Dunn & Clark, Jackson, for appellant.

Butler, Snow, O'Mara, Stevens & Cannada, Jackson, J.A. Covington, Meridian, for appellee.

GILLESPIE, Presiding Justice:

This is an appeal by E.E. Morgan from a decree of the chancery court adjudging him guilty of contempt for failure to obey a former decree of the court.

The United States Fidelity and Guaranty Company, hereinafter called Guaranty Company, is a surety company authorized to write surety bonds in this and other states. Morgan is a partner in a firm engaged in the general construction business. Morgan and his partner also control certain corporations engaged in the construction business. Morgan and other parties entered into certain construction contracts, all of which required the contractor to furnish performance and payment bonds, and in order to induce Guaranty Company to write the bonds on numerous construction contracts, Morgan executed applications and agreements of indemnity in favor of Guaranty Company. Pursuant to these agreements of indemnity, Guaranty Company bound itself as surety on twelve different construction bonds.

The principal in all the surety bonds defaulted, and various creditors filed suits against Guaranty Company upon the surety bonds for labor and materials furnished in the performance of the contracts. Guaranty Company called upon the principals to defend these suits, but the principals failed to do so. As a result, numerous judgments were rendered against Guaranty Company and various items of expense were incurred in connection therewith, all of which Guaranty Company paid. In addition thereto, other large claims were still pending against the principals and against Guaranty Company. Morgan was either a principal in or indemnitor on all such construction bonds.

After Guaranty Company had been compelled to pay the aforesaid judgments and expenses, it sued Morgan and other individual and corporate defendants for reimbursement, indemnity, exoneration, and specific performance. The amounts already paid out by Guaranty Company amounted to several million dollars, and the outstanding claims amounted to several hundred thousand dollars. In its suit against Morgan and the other defendants, Guaranty Company alleged that Morgan and the other indemnitors were under a duty to perform all obligations for which Guaranty Company was bound, and that Guaranty Company was entitled to exoneration and specific performance, including the right to be secured by all available assets of Morgan and other indemnitors and the right to be placed in funds to meet the pending claims. Personal service of process was had upon Morgan, and he appeared in person and by attorney. The case was tried on its merits, resulting in a final decree on July 23, 1965 for money judgments in various amounts against the several individual and corporate defendants. The decree provided also as follows:

That the bond applications and indemnity agreements signed by R.W. Hyde, Jr., E.E. Morgan, Morgan Investments, Inc., 3100 Corporation, Hyde Construction Company, Inc., H & F Engineering Company, Incorporated, Lacoste, Inc., Talbert & Brown Contractors, Inc., Universal Bridge Company and Slade and McElroy, Inc. are valid and binding obligations upon said defendants; that complainant is entitled to reimbursement, indemnification and exoneration by said defendants pursuant to the terms and provisions of said bond applications and indemnity agreements; and said defendants are obligated to perform specifically each and every obligation assumed by them under the terms of each of the various bond applications and indemnity agreements signed by them in regard to the jobs and bonds described in the Bill of Complaint, as amended; * * *.

*853 The applications and indemnity agreements were not annexed to the decree and were not otherwise identified or described in the decree.

When the original bill was filed, the court issued a preliminary injunction restraining Morgan and two corporations controlled by him from transferring or further encumbering the assets of E.E. Morgan or the corporations he controlled. This injunction was not brought forward in the final decree.

One of the applications and indemnity agreements signed by Morgan to induce Guaranty Company to issue a bond in connection with a contract for construction of a sewer system in Shively, Kentucky contained a provision that Morgan "will furnish to sureties, upon request and at such reasonable intervals of time as sureties may designate, financial statements showing the current financial position of the applicant of whom such request for a statement is made."

On September 3, 1965, Guaranty Company wrote Morgan a letter referring to the aforesaid decree and the provisions of the application in connection with the sewerage construction contract for the City of Shively, Kentucky, demanding and requesting that Morgan furnish Guaranty Company within ten days a financial statement showing his current financial position. In the meantime, Morgan had perfected an appeal without supersedeas from the decree of July 23, 1965. (See ___ So.2d ___, this day decided, affirming that decree.) The letter written by Guaranty Company to Morgan was returned unclaimed, but a copy of it was mailed to the attorneys who represented Morgan in the suit which resulted in the decree of July 23, 1965. Morgan did not furnish a financial statement, and on October 29, 1965, Guaranty Company filed in the chancery court, where the July 23, 1965, decree was rendered, and in the same case, a petition for issuance of a citation for contempt, setting forth substantially the facts as hereinabove stated. Pursuant to this petition the chancery court entered an order directing a citation requiring Morgan to appear on the 10th day of November 1965, to show cause why he should not be adjudged in contempt of court for failing and refusing to obey the decree of July 23, 1965, by reason of his failure and refusal to furnish Guaranty Company a financial statement. The court found also that Morgan had absented himself from the state and could not be found for service of process, and it directed process to be served on the attorneys who represented Morgan in the suit already referred to. The citation was thereupon issued and served upon one of the attorneys. Neither Morgan nor his attorneys appeared in response to the citation, and a decree pro confesso was entered taking as confessed all of the averments of the verified petition for issuance of citation for contempt. On November 12, 1965, a decree was entered in which Morgan was adjudged guilty of contempt for failing to furnish Guaranty Company the financial statement, and the sheriff was commanded to take Morgan into his custody and commit him to jail until he purged himself of the contempt. Upon the entry of this decree, Morgan perfected an appeal with supersedeas to this Court.

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Bluebook (online)
191 So. 2d 851, 1966 Miss. LEXIS 1230, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morgan-v-united-states-fidelity-guaranty-co-miss-1966.