United States Fidelity & Guaranty Co. v. Worthington & Co.
| Decision Date | 02 June 1925 |
| Docket Number | No. 4546.,4546. |
| Citation | 6 F.2d 502 |
| Parties | UNITED STATES FIDELITY & GUARANTY CO. v. WORTHINGTON & CO. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Phares Coleman and M. C. Stewart, both of Birmingham, Ala., for plaintiff in error.
Le Roy P. Percy, of Birmingham, Ala. (Percy, Benners & Burr, of Birmingham, Ala., on the brief), for defendant in error.
Before WALKER, BRYAN, and FOSTER, Circuit Judges.
In this case it appears that the defendant in error (hereafter called plaintiff) secured a contract from the state of Alabama to build about 4 miles of concrete highway near Selma, and gave bond for the faithful performance of the work, with the plaintiff in error (hereafter referred to as defendant) as surety.
The bond provided that, upon the failure of plaintiff to promptly and efficiently prosecute the work in accordance with the contract, defendant should take charge, complete the work at its own expense, and receive any balance due under said contract.
At the time of making the bond an indemnity agreement on a form prepared by defendant was executed by plaintiff, by which an assignment was made to defendant of all materials and equipment on the work, and of all deferred payments and retained percentages due plaintiff by the state for the work already completed, with subrogation of the surety to all the rights of the principal in the premises. This assignment was to become effective in the event of plaintiff's default on the work. The indemnity agreement contained also the following provision: "That the vouchers or other evidence of payments made by the company under its obligations of suretyship shall be conclusive evidence of the fact and extent of the liability of the undersigned to the said company under said obligation, whether said payments were made to discharge a penalty thereunder, incurred in the investigation of a claim made thereon, adjusting a loss or claim in connection therewith, or in completing the work covered by said contract, and whether voluntarily made or paid after suit and judgment against said company."
For reasons not disclosed by the record, plaintiff quit the job after about one-third of the work had been done, and the state notified defendant that it must complete the work. Defendant took possession of all plaintiff's materials and equipment, and, without notice to plaintiff, made a contract with one R. L. Lacy, whereby he agreed to complete the work and receive in payment therefor all of plaintiff's materials and equipment then on the job, all of the retained percentages and money then due on estimates, as a bonus or additional compensation, and the contract prices for the balance of the work. The work was completed by Lacy to the satisfaction of the state, and on January 16, 1924, the final estimate was issued and paid to defendant. There still remained some curative work to be done, but to guarantee this Lacy gave his certified check to the state.
Thereafter, in July, 1924, plaintiff brought suit for $37,655.45 on various counts. Demurrers were sustained to some of the counts, and a count for conversion was not submitted to the jury, leaving the complaint eventually with three counts for money had and received and one count for property received. Defendant pleaded in short by consent, under the Alabama practice, and the case was tried on the issues thus joined. At the close of the case defendant in various forms moved for an instructed verdict which was denied. The case went to the jury and resulted in a verdict in favor of plaintiff for $15,000, on which judgment was entered.
No error is assigned to the overruling of the demurrers, but the same questions are raised by requests for special charges and the motions to direct. There are some twenty assignments of error. Nine of these run to the admission of evidence and one to the rejection of evidence. These ten assignments are plainly without merit, and need not be further considered.
Defendant contends: First, that an action for money had and received cannot be maintained on the facts in this case; second, that the provision of the contract making vouchers or other evidence of payment by defendant conclusive evidence should have been strictly enforced by the court and entitled it to a verdict. All of the other assignments of error run to these two points.
Considering the evidence before the jury, it appears that defendant received $15,970.36 in cash on the retained percentages and estimate due...
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