Fid. &. Deposit Co v. Mason

• Decision Date: 17 June 1926
• Citation: Fid. &. Deposit Co v. Mason, 145 Va. 138, 133 S.E. 793 (1926)
• Court: Virginia Supreme Court
• Parties: FIDELITY &. DEPOSIT CO. OF MARYLAND. v. MASON.

133 S.E. 793

FIDELITY &. DEPOSIT CO.OF MARYLAND.

v.MASON.

Supreme Court of Appeals of Virginia.

June 17, 1926.

[Ed. Note.—For other definitions, see Words and Phrases, Second Series, Labor and Material.]

Error to Circuit Court of City of Richmond.

Action by notice of motion by Landon R. Mason, Jr., against the Fidelity & Deposit Company of Maryland. Judgment for plaintiff, and defendant brings error. Affirmed.

McGuire, Riely & Eggleston and Aubrey R. Bowles, Jr., all of Richmond, for plaintiff in

error.

Hall, Hall & Peachy, of Richmond, for defendant in error.

CHICHESTER, J. On the 9th day of April,

1923, Carson-Davis Construction Company, Inc., entered into a written contract with the commonwealth of Virginia, acting through the state highway commission, for the construction of about 5.2 miles of macadam roadway in Bedford and Amherst counties.

Pursuant to the statute (Michie's Va. Code

1924, § 1969h), the construction company entered into a contract bond, in the penal sum of $57,725, with the Fidelity & Deposit Company of Maryland as surety, conditioned that the "principal shall in all respects comply with the terms and conditions of the said contract and his obligations thereunder, * * * and shall promptly pay all just claims * * * for labor and material, incurred by said principal in or about the construction or improvement contracted for."

On April 20, 1924, Landon R. Mason, hereafter called plaintiff, was employed as superintendent of the work of construction contracted for, at a salary of $300 per month, expenses, etc., and on August 6, 1924, the construction company failed and went into the hand of receivers. There was a balance due plaintiff at this time of $1,150.50.

On October 13, 1924, plaintiff brought action by notice of motion against the Fidelity & Deposit Company of Maryland, hereafter referred to as surety company, in the circuit court of the city of Richmond, and, a jury being waived and all matters of law and fact being submitted to the court, judgment was rendered in favor of the plaintiff against the surety company for $1,150.50, with interest from September 1, 1924, and costs.

The surety company moved the court to reverse and set aside the judgment because it was contrary to the law and the evidence, which motion the court overruled. This judgment is before us for review, upon writ of error duly granted.

There was a stipulation of counsel as to the facts, the substance of which has been heretofore set out.

There were seven grounds of defense relied on by the surety company as follows:

(1) The defendant is not indebted to the plaintiff as alleged in the notice of motion for judgment herein, or for any amount, or on any ground whatsoever.

(2) ' The contract bond mentioned in the notice of motion for judgment herein was entered into by the defendant with and for the benefit of the state of Virginia only, and bond creates no liability on the part of the defendant to the plaintiff.

(3) The liability, if any, of the defendant by virtue of said bond to said state of Virginia has not been, and cannot yet be, ascertained and fixed. Therefore, even if any liability existed by the defendant to the plaintiff under said bond, which the defendant denies, such liability could not be ascertained at this time, and therefore this proceeding is prematurely brought and should be dismissed.

(4) No contractual relation has existed at any time between the plaintiff and the defendant, directly or indirectly, under the contract bond mentioned in the notice of motion for judgment herein, or otherwise, and there Is no legal ground, contractual or otherwise, on which the alleged liability of the defendant to the plaintiff may be based.

(5) Any provisions of said contract bond. alleged or supposed to create liability by the defendant to the plaintiff, as alleged herein, were unauthorized by law, and are therefore, invalid and void, and the plaintiff is without rights of any nature thereunder.

(6) Even if the plaintiff would be entitled under any circumstances to any right under or benefit from said contract bond, or any provision thereof, which the defendant denies, the services performed by the plaintiff and the expenses incurred in connection therewith, as alleged herein, were not within the meaning and benefit of said bond or any provision thereof.

(7) The plaintiff did not render services and incur expenses as alleged in the notice of motion for judgment herein in or about the construction of the road from Big Island to Snowden, in Bedford and Amherst counties, Va.

Since the granting of the writ of error in this case all these grounds of defense in an action of this kind, involving the legality of a bond and the construction contract identical with the bond and contract under consideration here, have been decided against the contention of the surety company, with exception of two.

In.(Etna Casualty & Surety Co. v. Earle-Lansdell Co., 142 Va. 435, 129 S. E, 263, 130 S. E. 235, this court, speaking through Prentis, P., held, in effect, that section 5143, Code 1919, authorized one furnishing labor and material for the construction of a highway under such a contract as this to sue the surety on the contractor's undertaking bond for labor and material furnished in or about the construction of the highway; that such a contractor's bond is legal, and may contain any conditions not prohibited by statute.

Thus all questions raised in the instant case have been decided against the contention of the surety company, except—

(1) The prematureness of the action; and (2) The question as to whether the particular services performed by the plaintiff were within the meaning and benefit of the bond or any provisions thereof.

1. As to the first question, it is conceded now that there are ample funds, well within the limited liability of the surety company on the bond, to pay all proper claims, including that of the state of Virginia, for the additional expense incurred in the completion of the contract. As this ground of defense was based upon the possibility that the claims of the state and of laborers and materialmen might in the aggregate exceed the penal amount of the bond, that the claims of creditors would have to be prorated, and that this could not be done in an action at law, this possibility no longer exists, and the question, so far as this case is concerned, is a moot question. We therefore express no opinion as to it, except to say this, as was said in Ætna Casualty & Surety Co. v. EarleLansdell Co., supra, "Section 5143 * * * authorizes the plaintiff to sue upon such a bond, so made in part for its benefit, " and it would seem to follow that if from the facts and circumstances of a particular case equity could best administer justice, this is a matter of defense, and the appropriate steps to invoke equity should be taken by the defendant.

2. This question involves a construction ot the bond and contract as applied to the facts of this particular case. The plaintiff was employed by the contractor at the suggestion and upon the recommendation of the surety company, after the contractor had fallen behind in his work and was without proper equipment and funds to proceed with it. His time, in addition to superintending the road construction work, was taken up in securing proper machinery, having the equipment on hand repaired, and in securing funds to meet the...