Alfred E. Joy Co., Inc. v. New Amsterdam Cas. Co.

• Citation: 98 Conn. 794,120 A. 684
• Court: Supreme Court of Connecticut
• Decision Date: 18 April 1923
• Parties: ALFRED E. JOY CO., INC., v. NEW AMSTERDAM CASUALTY CO. ET AL.

120 A. 684

98 Conn. 794

ALFRED E. JOY CO., INC., v. NEW AMSTERDAM CASUALTY CO. ET AL.

Supreme Court of Errors of Connecticut.

April 18, 1923

Appeal from Superior Court, New Haven County; William M. Maltbie and Isaac Wolfe, Judges.

Action by the Alfred E. Joy Company, Inc., against the New Amsterdam Casualty Company and others, to recover damages for breach of a bond, and to secure relief by way of a declaratory judgment. From a judgment in favor of the Casualty Company when plaintiff refused to plead further, after a demurrer to the amended complaint was sustained in part and overruled in part, plaintiff appeals. Error, and judgment set aside.

The allegations of the amended complaint set forth, in substance the following situation:

The plaintiff in July, 1919, contracted with the defendant, the Grace Hospital Society, to paint a building on their land and provide material therefor for the sum of $10,995, and on January 31, 1921, he made a subcontract with one R. R. Hawley by which Hawley " agreed to provide all materials and perform all the work for the painting" the building in question for the sum of $10,000; this agreement also contained provisions to the effect that, should Hawley refuse or neglect to supply sufficient workmen or materials, the plaintiff should be at liberty to provide such labor or materials, and deduct the cost thereof from money due or to become due Hawley, and that, there being sufficient ground for such action, the plaintiff might terminate Hawley's employment and complete the work, and that, if the expense of completing the work should exceed the unpaid amount due under the agreement, Hawley should pay the difference to the plaintiff, and that Hawley should refund to plaintiff all moneys that plaintiff should be compelled to pay in discharging any claim or lien on the premises made obligatory in consequence of Hawley's default.

About March 15, 1921, Hawley, as principal, and defendant the New Amsterdam Casualty Company, as surety, entered into a bond in the penal sum of $2,000 to plaintiff as obligee, conditioned for the faithful performance by Hawley of his contract of January 31, 1921, with the plaintiff. Thereupon Hawley entered upon the execution of his agreement with the plaintiff, and partially performed it, but on or about the _______ day of September, 1921, he ceased work upon the painting and abandoned the job, and repudiated all of his obligations under the agreement. Thereupon, pursuant to the request and direction of the Grace Hospital Society and the casualty company, the plaintiff completed its contract with the hospital, on or about October 15, 1921.

In October, 1921, the defendant Hodges & Bro. filed a certificate of mechanic's lien upon the building and land in question to secure an alleged claim for materials furnished Hawley in his work thereon to the amount of $758.40 and interest, and also the defendant Merrels & Whitfield, Inc., filed a like certificate of lien thereon for the sum of $911.98 and interest. By reason of the filing and pendency of these liens and of the claims thereunder, the hospital society refuses to pay the plaintiff the sum of $1,890.86 still unpaid on its contract.

The plaintiff is ignorant as to the validity and amounts of the alleged liens. The subcontract with Hawley has cost the plaintiff $8,376.48 paid Hawley, and $1,560.55 paid to complete its contract with the hospital, plus such amounts if any, that may be due under the liens above mentioned. The hospital society has refused to bring a suit for the purpose of determining the rights of the lienors although requested by plaintiff to do so.

The plaintiff has made demand upon Hawley and upon the casualty company his surety as aforesaid, that they pay or satisfy any valid claims of said Hodges & Bro., and of said Merrels &amp Whitfield, Incorporated, and that they take action to cause their claims to be withdrawn and to cause the mechanic's liens to be released, but they have refused to do so. Hawley has not since his breach of his contract with plaintiff any property subject to attachment or other legal process, and now has no such property, and is and at all times has been financially irresponsible.

The bond referred to contains the following, stated as an express condition precedent to any action upon the bond, to wit:

" That any suits at law or proceedings in equity brought on this bond to recover any claim hereunder must be instituted within twelve months after the completion of said contract."

The Hospital Society claims the right to deduct from the amount due plaintiff the amount of each of the claims of the lienors, and the lienors claim the right to be paid the amount of their respective claims by the hospital society out of the amount claimed from the hospital society by plaintiff, and the hospital society refuses to pay plaintiff the amount claimed by him because of the claims of the lienors, and for no other reason whatever.

There are actual bona fide and substantial questions and issues in dispute between all the parties and substantial uncertainty of legal relations between all the parties to this suit which require settlement and judicial determination. All the persons who have an interest in the subject-matter of the complaint are parties to this action.

The plaintiff prays for:

(1) A declaratory judgment as to the existence or nonexistence of the rights, powers, privileges, and immunities of the parties upon the facts alleged in the complaint and of the existence or nonexistence of the facts upin which such rights, powers, privileges, and immunities now exist or will arise in the future.

(2) A declaratory judgment determining:

(a) Whether or not said defendants Hodges have a valid or subsisting mechanic's lien upon the said building and the land on which it stands in the amount of $758.40, with interest, or any part thereof.

(b) Whether or not Merrels & Whitfield, Incorporated, have a valid and subsisting mechanic's lien upon the said building and the land upon which it stands in the sum of $911.98, with interest, or any part thereof.

(c) How much is or will be due from said hospital society to said Merrels & Whitfield, Incorporated, and to said Hodges and to the plaintiffs.

(d) The amount which is or will be due to the plaintiff from the defendant Hawley.

(e) The amount which is or will be due the plaintiff from said defendant New Amsterdam Casualty Company.

The plaintiff prays for consequential relief as follows:

(1) Judgment against said hospital society for said sum of $1,890.86 and interest; or, in the alternative,

(2) Judgment against said hospital society for so much of said balance of $1,890.86 and interest as may be due the plaintiff after said alleged claims of Hodges & Bro., and of Merrels & Whitfield, Incorporated, if any, or so much thereof as may be found due to said claimants, if any, have been satisfied.

(3) $2,000 damages against said Hawley and said New Amsterdam Casualty Company.

(4) Judgment against said Hawley and said New Amsterdam Casualty Company for the difference between the contract price of said work and materials agreed to be rendered and furnished by said Hawley under said agreement of January 31, 1921, and the cost to plaintiff caused by said Hawley's breach thereof, being the amounts so paid to said Hawley, plus plaintiff's charges and disbursements for the completing of said painting work, plus such amount or amounts, if any, of the said alleged claims of said Hodges & Bro., and of said Merrels & Whitfield, Incorporated, as may be adjudged valid and subsisting claims in this suit.

Frederick H. Wiggin, of New Haven, for appellant.

Samuel E. Hoyt, of New Haven, for appellee New Amsterdam Casualty Co.

CURTIS, J. (after stating the facts as above).

The defendant the casualty company demurred to the amended complaint setting forth, in substance, the foregoing facts for the following, among other reasons:

(1) Upon the ground that the undertaking of Hawley and the casualty company as surety was to refund any amounts that the plaintiff would be compelled to pay to discharge any liens, and the right of action of the plaintiff to sue upon the bond cannot become effective until the plaintiff has paid something; and (2) that the amount that the job has cost the plaintiff to date does not exceed the amount that he agreed to pay, and therefore no cause of action exists against the defendant Hawley or the casualty company.

The court sustained the demurrer upon these two grounds, and overruled it as to the remaining grounds, the plaintiff refused to plead further, and judgment was entered for the casualty company, and the plaintiff appealed, assigning as its reason of appeal the sustaining of this demurrer.

We will first consider whether the court correctly sustained the demurrer on the first ground.

The complaint sets up that, in the agreement of Hawley with the plaintiff of January 31, 1921, Hawley " agreed to provide all materials and perform all the work for the painting" of the hospital building in question for $10,100. The complaint also alleges that the bond of Hawley...