Boyles Galvanizing & Plating Co. v. Hartford Acc. & Ind. Co.
| Decision Date | 03 February 1967 |
| Docket Number | 8411.,No. 8410,8410 |
| Parties | BOYLES GALVANIZING & PLATING COMPANY, an Oklahoma Corporation, Appellant, v. HARTFORD ACCIDENT & INDEMNITY COMPANY, a Foreign Corporation, Appellee. HARTFORD ACCIDENT & INDEMNITY COMPANY, a Foreign Corporation, Appellant, v. BOYLES GALVANIZING & PLATING COMPANY, an Oklahoma Corporation, Appellee. |
| Court | U.S. Court of Appeals — Tenth Circuit |
William K. Powers, Tulsa, Okl. (Dyer, Powers, Gotcher, Marsh & Kamins, Tulsa, Okl., of counsel; Gerald E. Kamins, Tulsa, Okl., with him on the brief), for Boyles Galvanizing & Plating Co.
David M. Thornton, Tulsa, Okl. (Andrew T. Dalton, Jr., Tulsa, Okl., with him on the brief), for Hartford Accident & Indemnity Co.
Before BREITENSTEIN and SETH, Circuit Judges, and KERR, District Judge.
Boyles Galvanizing & Plating Company (Boyles) obtained a judgment against Hartford Accident & Indemnity Company (Hartford) in an action on a surety bond tried to the court without a jury. Both parties have appealed. The principal issues on appeal concern a default judgment entered against Hartford's principal, Indiana Steel Tank Corporation (Indiana Steel), whether Hartford as a surety was released by lack of notice of its principal's default, and the proper amount of the judgment.
The record shows that Indiana Steel had contracts to erect steel towers for the Federal Aviation Agency. The steel used had to be galvanized and Boyles undertook to do this work. Some of the steel parts were shipped to the Boyles plant in Tulsa, Oklahoma, and were galvanized; however, a disagreement arose between Indiana Steel and Boyles over payment for the work and the handling of the finished parts. Boyles stopped work, and Indiana Steel in October 1963 filed suit against Boyles for damages in the United States District Court for the Northern District of Oklahoma (Cause No. 5813). The complaint also asked for an injunction to cause Boyles to release possession of some of the finished items. The parties to the action did not proceed to trial but instead signed a stipulation which set out a payment schedule to be followed by Indiana, provided for the handling of the finished steel parts, and stated other details. The most important portion of the stipulation to this action was a provision whereby Indiana agreed to furnish an "indemnity bond" which would "* * * guarantee payment for galvanizing, packaging and shipment on * * *" both Federal Aviation contracts. It also stated that such "indemnity and guaranty bond" be acceptable to Boyles and be deposited with the clerk of the court. The stipulation also provided that the case could be reopened on motion of either party. The court approved the stipulation by an order, and the bond or bonds here in issue were provided by Hartford as the surety.
The record shows that Indiana did not make the payments as provided in the above stipulation and did not otherwise proceed. Boyles then reopened the suit in which the stipulation was filed (No. 5813) by filing an answer and a cross-complaint on February 10, 1964. These pleadings sought judgment against Indiana in the amount provided in the stipulation and the original agreement without adjustments. This was computed by Boyles to be the sum of $39,326.14. Hartford was not made a party to the action, but a witness for Boyles testified that Hartford's claim office at Tulsa was advised of Indiana's failure to pay and of the reopening of the suit. Hartford's witness testified that the company had no record of this advice. Thereafter there was correspondence between Boyles and Indiana with advice to Hartford. Hartford's attorney sought an extension of time, advised Boyles' attorney that it would employ local counsel and have an answer filed. The pleading was not filed, no extension of time for Indiana to answer the counterclaim could be secured, and a default judgment was entered on March 27, 1964, by the clerk of the court in the absence of the judge. Motion was filed by Boyles for judgment on Hartford's bond. A conference was held by the trial judge who suggested that Hartford file a motion to vacate the default judgment, but Hartford did not do so.
Apparently no further proceedings were had in the original case (No. 5813), and Boyles thereafter commenced the suit with which we are here concerned (No. 6060) against Hartford on its bond. Boyles sought a summary judgment against Hartford, but it was denied. The case was then tried to the court, and judgment was rendered against Hartford for $28,601.00. No attorney's fees were allowed.
During the course of the trial the invoices, shipment records, schedules, material on hand, records of payment, and other data relative to the performance by Boyles and by Indiana were introduced, and witnesses heard. The stipulation in No. 5813 was introduced together with the bond or bonds filed pursuant to it. The record shows that when Indiana and Boyles stopped work there remained at the Boyles plant a considerable quantity of steel parts.
The court found that the contract referred to in the bond was the stipulation entered in Cause No. 5813, and that the performance which the surety guaranteed was payment by Indiana for the galvanizing by Boyles. The court further found that Indiana had defaulted in failing to make the stipulated payments. It also found that the default judgment taken by Boyles against Indiana should have been signed by the court after notice, rather than by the clerk. The court found that Boyles had presented an accounting, and Hartford was liable in the amount of $28,601.00.
The court concluded that the default judgment in No. 5813 signed by the clerk was "voidable only," and was "* * * prima facie evidence against Hartford Accident & Indemnity Company, who may show all matters which might have been asserted by the principal on the bond." The court then concluded that this was an action on a contract, not on an open account, and refused to allow attorney's fees to the plaintiff Boyles.
On these appeals Boyles urges that the trial court should have granted it a summary judgment, and should not have "gone behind" the default judgment in No. 5813. These points need not be considered because the denial of the motion for summary judgment is not appealable and the issues "behind" the default judgment were litigated in the trial court in this action.
Boyles also urges that the judgment should have been for $39,326.14, the amount of the default judgment, rather than $28,601.00 as rendered; and further, that it should have been allowed attorney's fees.
The trial court found, as described above, that Indiana failed to make the payments agreed to by it, and required of it by the stipulation in No....
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