Adams Supply Co. v. U.S. Fidelity & Guaranty Co.
| Decision Date | 26 March 1959 |
| Docket Number | 3 Div. 805 |
| Citation | 269 Ala. 171,111 So.2d 906 |
| Court | Alabama Supreme Court |
| Parties | ADAMS SUPPLY CO. v. UNITED STATES FIDELITY & GUARANTY CO. et al. |
Knabe & Nachman and Jack Crenshaw, Montgomery, for appellant.
Rushton, Stakely & Johnston, Montgomery, for appellee.
On, to-wit, June 29, 1950, Dallas Homes, Inc., Clover Homes, Inc., and Happiness Homes, Inc., hereafter referred to as owners, entered into contracts with Folmar-Flinn Corporation as general contractor, hereafter referred to as Folmar-Flinn, for the construction of a large number of dwellings in the City of Montgomery.
On July 25th and 27th, 1950, Folmar-Flinn as general contractor entered into subcontracts with J. B. Whitehead, doing business as Whitehead Plumbing and Heating Company, hereafter referred to as Whitehead, for the plumbing and heating work required under Folmar-Flinn's contracts with the owners. These subcontracts contain the following provisions, among others:
* * *'
On the same days that the subcontracts were entered into United States Fidelity and Guaranty Company, a corporation, hereafter referred to as U.S.F. & G. executed bonds as surety for Whitehead as principal with Folmar-Flinn as sole obligee. Those bonds were not conditioned as provided in the subcontracts, but were conditioned as follows:
'Now, Therefore, The Condition of the foregoing obligation is such that if the said Principal shall well and truly indemnify and save harmless the said Obligee from any peculiar loss resulting from the breach of any of the terms, covenants and conditions of the said contract on the part of the said Principal to be performed, then this obligation shall be void; otherwise to remain in full force and effect in law; Provided, however, that this Bond is issued subject to the following conditions and limitations: * * *.'
Adams Supply Company, a corporation, hereafter referred to as Adams, supplied Whitehead with the plumbing and heating equipment which Whitehead used in attempting to perform his subcontracts with Folmar-Flinn. Folmar-Flinn was aware of the fact that Adams was supplying Whitehead as early as August of 1950.
On October 14, 1950, Whitehead wrote Folmar-Flinn, with copy to Adams, a letter in pertinent part as follows:
'Reference is herewith made to the subject 146 units that we have under contract with you.
'It is requested that all future payments due us for performance of this work be made in the form of checks payable jointly to J. B. Whitehead and Adams Supply Company.
'This acknowledges that said Adams Supply Company is material supplier for the subject projects.
'It will be greatly appreciated if you will acknowledge your cooperation with this request.'
At the time the above quoted letter was presented to Folmar-Flinn, Adams claimed Whitehead owed it the sum of $11,887. Thereafter Folmar-Flinn paid to Adams and Whitehead jointly the sum of $9,692.87 which amount Adams claimed to be $2,194.13 less than the amount which Whitehead owed Adams on October 14, 1950.
Whitehead was unable to completely perform his subcontracts with Folmar-Flinn and subsequently went into bankruptcy.
In June of 1951, Adams filed its bill in the circuit court of Montgomery County, in equity, against U.S.F. & G. The bill sought declaratory relief only and prayed that the court declare that U.S.F. & G. was liable to Adams for the sum of $15,545.69 with interest from October 25, 1950, which sum represents the entire amount which Whitehead owed Adams on supplies furnished and used in carrying out Whitehead's subcontracts. The bill further prayed as follows:
'If complainant be mistaken in the relief prayed for, then complainant prays that this Honorable Court will render a declaratory judgment and decree stating that respondent is responsible for the amount of $2,194.13, with interest from October 25, 1950.'
A demurrer interposed by U.S.F. & G. was sustained to the bill filed by Adams. Thereafter Adams filed a bill wherein the original bill was completely redrafted and Folmar-Flinn and Whitehead were added as parties respondent. The substituted bill like the original bill sought only declaratory relief. U.S.F. & G. interposed a demurrer to the substituted bill which the trial court and counsel for all parties treated as having been filed on behalf of Folmar-Flinn and Whitehead, as well as U.S.F. & G. The demurrer contained grounds addressed to the bill as a whole and to certain so-called aspects. The demurrer was sustained to the bill as a whole and to the several aspects which the demurrant conceived the bill to encompass. Adams appealed to this court. The averments of the substituted bill are fully set out in the opinion written on that appeal. We reversed and remanded. Adams Supply Company v. United States Fidelity & Guaranty Co., 265 Ala. 178, 90 So.2d 284. Our reversal was predicated on the ground that the substituted bill showed a justiciable controversy which the respondents did not want settled on demurrer.
After remandment the respondents, U.S.F. & G. and Folmar-Flinn, answered the substituted bill. Adams later filed two amendments. U.S.F. & G. and Folmar-Flinn answered the substituted bill, as amended.
Following a hearing wherein the testimony was taken in the presence of the trial court, the final decree was entered, the declarations of which are adverse to Adams. From that decree Adams has appealed to this court.
The decree of the trial court, including the court's findings as to the facts, reads as follows:
'This case coming on to be heard was submitted for final decree upon the Bill of Complaint as last amended and the answer of the Respondents, Folmar-Flinn Corporation and United States Fidelity & Guaranty Company, as last amended, the Exhibits and the testimony taken orally before the Court, and upon consideration of the same, the Court finds as follows:
'1. That Respondent, Folmar-Flinn Corporation, in 1950 as general contractor entered into contracts with Dallas Homes, Inc. for the construction of 50 housing units, with Clover Homes, Inc. for the construction of 41 housing units and with Happiness Homes, Inc. for the construction of 55 housing units, all in the City of Montgomery, Alabama. That on July 25, 1950, the Respondent J. B. Whitehead doing business as J. B. Whitehead Plumbing & Heating Company entered into three (3) subcontracts with the Respondent Folmar-Flinn Corporation for the plumbing and heating work in said housing units, and that said subcontracts contained among others the following clauses:
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