Aetna Indemnity Company v. Little Rock

• Decision Date: 18 January 1909
• Citation: 115 S.W. 960,89 Ark. 95
• Parties: AETNA INDEMNITY COMPANY v. LITTLE ROCK
• Court: Arkansas Supreme Court

115 S.W. 960

89 Ark. 95

AETNA INDEMNITY COMPANY v. LITTLE ROCK

Supreme Court of Arkansas

January 18, 1909

[Copyrighted Material Omitted]

Appeal from Pulaski Circuit Court, First Division; Robert J. Lea Judge; affirmed.

STATEMENT BY THE COURT.

The Board of Public Affairs of the city of Little Rock let a contract for the paving of West Markham Street. The Arkansas Asphalt Company was the successful bidder, and entered into a contract to construct an asphaltum pavement on the designated portion of West Markham Street, and to maintain the same in good order and condition for a period of ten years. The Arkansas Asphalt Company assigned its contract to the Green River Asphalt Company.

The contractor was required to give two bonds, one for $ 10,000 for the proper construction of the pavement and to indemnify the city against all claims for labor and material; and the other one for $ 5,000 for the maintenance of the pavement for ten years. This bond was as follows:

"Whereas, the Arkansas Asphalt Company has entered into a contract with the Board of Public Affairs of the city of Little Rock, acting for said city, for the grading paving and other work incidental thereto, of West Markham Street, from the east line of Louisiana Street to the west line of Cross Street, in said city, bearing date of the third day of September, 1902; and

"Whereas, the city has required a bond guarantying the said pavement for a term of ten years;

"Now, therefore, the condition of this obligation is such that if the said Arkansas Asphalt Company or the Green River Asphalt Company constructs a good, serviceable and substantial pavement under said contract, and keeps and maintains said pavement in first class and good condition and repair for and during a term of ten [10] years from the date of the acceptance of said pavement by said city, then this obligation shall be null and void; but otherwise it shall remain in full force and effect."

There was a double track of street railway down the middle of Markham Street, and the street car company was, under an ordinance, obligated to pave between its tracks and for two feet on each side of them with the same kind of pavement with which the rest of the street was paved; and if it should fail to do so then the city could pave said part of the street and charge the cost thereof to the street car company.

The contract contained a provision that if the city, on failure of the street car company to comply with the ordinance elected to pave the space required to be paved by the street car company, then the contractor [The Arkansas Asphalt Company] should pave said space under the conditions, terms and specifications provided in the contract for the paving of the other parts of the street. Subsequent to this contract, the city and the street car company agreed that said space might be paved with brick, and it was paved with brick under a contract between the city and a third party. Neither the Asphalt Company, nor the sureties on its bonds, consented to the change agreed upon between the city and the street car company.

Testimony was adduced tending to prove that the city did not take proper care of the street, in that it permitted mud, water and manure to accumulate upon it.

It was proved, and undisputed, that after about two years' use the street fell into bad condition, and that the city called upon the contractor and its sureties to maintain and repair it, and upon their failure to do so proceeded to make necessary repairs, and in doing so expended about $ 5,300. At the close of the testimony, the court directed a verdict for the plaintiff against the surety company for the full amount of the bond sued upon, $ 5,000; and the surety company appeals.

Judgment is affirmed.

Bradshaw, Rhoton & Helm, for appellant.

1. The original contract, that of September 3, 1902, called for an all asphalt street. The maintenance bond sued on was given to cover that contract, and was conditioned for the construction of a good, serviceable, substantial pavement under said contract. When the city, by its ordinance afterwards passed, gave permission to the Little Rock Traction & Electric Company to pave between its tracks and for two feet on each side thereof with brick, this was a change in the contract which, not having been agreed to by the surety, discharged it from liability. 6 Cyc. 83; 2 Brandt, Suretyship, § 278; Stearns, Suretyship, § § 72, 73; 65 Ark. 552; 6 Current Law, 1595, n. 66; 66 Ark. 287; 71 Ark. 199; 79 Ark. 523; 73 Ark. 473; 82 Ark. 594; 96 Mo.App. 467; 42 Ore. 386; Fed. Cas. No. 14871; 53 Kan. 358; 125 Mo. 72. The surety is not liable because the bond was executed under the representation on the part of the city that the street car company would be required to pave a certain portion of the street with like material, the contract reciting an ordinance to that effect. When it changed this representation by changing its law in that respect, the transaction amounts to obtaining the bond under misrepresentation, and is a fraud upon appellant, releasing it from liability. 5 Cyc. 817.

2. The bond is void because the city had no authority to make the contract. Kirby's Digest, § 5456; 98 Cal. 12; 32 P. 702; 130 Cal. 226; Kirby's Digest, § § 5643, 5644; 33 Ore. 307; 92 Wis. 456; 9 Wash. 273; 56 Hun, 81; 99 Ky. 380; 131 Mo. 26.

3. Appellant should have been permitted to introduce proof to show at what degree of heat the asphalt was laid. If the stipulations of the contract were not complied with in that respect, appellant was entitled to a peremptory instruction.

4. The question of the city's negligence in failing to keep the street free from dirt, mud, gravel and other deleterious substances ought to have been submitted to the jury.

5. The cause should have been removed to the Federal court, pursuant to the petition and bond filed for that purpose. Where a plaintiff joins resident defendants with nonresident defendants in an action, and, after the statutory time for removal has expired, dismisses as to the resident defendants, he is estopped to set up the expiration of the time for removal. 2 Rose's Code, § 1136 [L.]; 169 U.S. 928; 65 F. 138; 70 F. 277. The petition was filed within the time allowed for filing a motion for new trial. It was not too late. 2 Rose's Code, § 1136 [J.]; 33 F. 84; 53 F. 307; 81 F. 417; 83 F. 853; 45 F. 802; 37 F. 545.

W. B. Brooks, City Attorney; J. C. Marshall and J. H. Carmichael, for appellee.

It was the duty of the street car company under its franchise to pave between its tracks and for two feet on either side thereof at such time as the other portions should be paved. The contract therefore did not contemplate the paving of the street in its entire width by the asphalt company or its assignee, except upon the contingency of refusal by the street car company to comply with its contract. That contingency never arose, and there was never any change in the contract so far as the asphalt company was concerned. The contract was substantially complied with, as appears from the evidence and the fact of acceptance of the pavement and payment of the balance at the solicitation of counsel. 34 Ark. 197. There was no misrepresentation. The bond sued on did not become operative until acceptance of the pavement, and this was done at request of one who, although he claims to have acted for the Green River Asphalt Company, was also agent for the appellant, and had full knowledge of the facts. The agent's knowledge in this case estops the principal 52 Ark. 11; 29 Ark. 99.

2. The city had authority to make the contract. Kirby's Digest, § 5436; 1 Dillon, Mun. Corp., 4 Ed. § 89; Elliott on Roads & Streets, [2d Ed.], § § 532, 533; 54 Am. St. Rep. 695; 34 Neb. 220; 41 Neb. 655; 54 Mich. 345; 147 Mo. 467; 48 L.R.A. 285; 104 Ia. 160; 107 Ia. 90; 66 Hun, 179; 137 Mo. 540. The undertaking of the contractor and appellant as guarantor was absolute. The consideration demanded by it was paid, and such part thereof as was paid it by the contractor was repaid to him by the city. 89 Ala. 362. See, also, 44 L.R.A. 527.

3. There was no sufficient evidence to justify submitting to the jury the question of the city's negligence in failing to keep the street clean. Moreover, a city is under no legal duty or obligation to clean its streets.

4. After the case had gone to trial, verdict and judgment rendered, it was then too late to move a transfer into the Federal court. The application must be made before trial in the State court. 175 U.S. 635; 60 L.R.A. 949; 169 U.S. 92; 65 F. 129.

OPINION

HILL, C. J., [after stating the facts].

I. It is said that the sureties were relieved by the change of the pavement required of the street car company. It was understood from an existing ordinance, and by a descriptive clause in the contract, that the space occupied by the street car company, and two feet on each side thereof, was to be paved with whatever material the rest of the street was paved--in this instance, asphalt. This contract provides that in a certain contingency mentioned therein the contractor could be required to pave this space with asphalt under similar terms and conditions and specifications as the work contracted for. This, however, was at the option of the city. Unless the city exercised that option and required it to pave this space, the contractor had no concern with this space. It was not a matter affecting the performance of his contract and its only relation to the work done was its...