American Fidelity Co. v. Cray
| Decision Date | 05 November 1963 |
| Parties | AMERICAN FIDELITY COMPANY v. Eugene P. CRAY et al. |
| Court | New Hampshire Supreme Court |
Wiggin, Nourie, Sundeen, Nassikas & Pingree and T. William Bigelow, Manchester, for plaintiff.
Bell & Bell and Peter S. Espiefs, Keene, for defendants, Eugene P. Cray and Paul Cray d/b/a Cray Oil Co.
William Maynard, Atty. Gen., and Alexander J. Kalinski, Asst. Atty. Gen., for the State of New Hampshire, furnished no brief.
Francis G. Moulton, Littleton, for Kenneth E. Curran, Inc., furnished no brief.
RSA 447:16 provides in part that officers who contract in behalf of the State for the construction of public highways shall 'obtain as a condition precedent to the execution of the contract, sufficient security by bond or otherwise * * * conditioned upon the payment by the contractors and subcontractors for all labor performed or furnished * * * for all material used and for fuels, lubricants * * * and supplies purchased by said principal and used in carrying out said contract'.
On March 24, 1958, the plaintiff issued a contract bond as surety. The principal was LaClair Bros. Construction Inc., under a contract with the State of New Hampshire to rebuild the Lincoln-Livermore highway. In addition to the obligation of the principal to perform all agreements, terms and conditions in the contract and to pay all lawful taxes, this bond was conditioned on the payment by the principal of all the items enumerated in the above statute 'this agreement to make such payment being in compliance with the requirements of Revised Statutes Annotated 447:16 to furnish security thereunder and being in fact such security'.
RSA 447:17 provides that to obtain the benefit of the bond a claimant for labor performed or materials furnished 'shall within ninety days after said claimant ceases to perform said labor or furnish said materials * * * file * * * with the department of public works and highways * * * a statement of the claim; a copy of which shall forthwith be sent by mail by the office where it is filed to the principal and surety'.
Section 18 of this chapter provides in part that '[s]aid claimant shall, within one year after filing such claim, file a petition in the superior court for the county within which the contract shall be principally performed to enforce his claim * * * with copy to the principal and surety, and such further notice as the court may order'.
LaClair shut down the job for the winter on October 24, 1958, moved its equipment off the project on October 27 next, and never performed any work thereafter. It was estimated at that time that LaClair had completed 74% of the construction but it subsequently developed that it had performed 64% of the final amount on a dollar basis.
May 12, 1959, American Fidelity Company notified the State that LaClair was unable to perform. American completed the contract through its agent, Weaver Bros. Construction Co. This work started May 25, 1959, and the project was accepted October 9, 1959. The plaintiff, American, expended $196,016.38 to complete the contract. It has received $81,233.33 from the State and the balance of $7,000 due from the State has been deposited in court.
During the period from May 27, 1958, to about November, 1958, when LaClair was on the job, Cray Oil Company supplied fuels and lubricants to LaClair used in carrying out this project. Cray alleges it is owed therefor a balance of $4,009.82. It filed its claim with the Department of Public Works and Highways on May 29, 1959, and commenced an action against the plaintiff American for this balance by writ dated March 3, 1961. Cray states in its brief that it brought a suit against LaClair for this amount by writ dated July 6, 1959, which action was continued for judgment after LaClair was defaulted.
The claim of Kenneth E. Curran, Inc., in the amount of $272.07 is for services performed for LaClair on this project during the month of October, 1958. It filed a claim with the Department of Public Works and Highways by letter dated May 12, 1959, but has never brought a suit to collect its claim.
Defendant Cray first contends that because the bond issued by American contains obligations which are broader than those required by RSA 447:16 it is not a statutory bond and may be sued upon as a valid common law obligation even if the requirements of RSA 447:17, 18, are not complied with.
American's bond in addition to securing the performance by LaClair of all the obligations required by the statute also guaranteed that LaClair would perform its contract with the State, pay all lawful taxes and save the State harmless against all claims and suits for damage to person or property resulting from its negligence. It also had many more obligations not contained in the statute.
This court held in Petition of Leon Keyser, Inc., 97 N.H. 404, 407, 89 A.2d 917, that if a surety undertook extrastatutory provisions claims arising under those obligations could be enforced as valid common law obligations without the need of complying with the requirements as to notice and the filing of a claim provided in RSA 447:18. Robinson Clay Product Co. v. Beacon Const. Co. of Mass., 339 Mass. 406, 159 N.E.2d 530. However Cray's claim arises not under an extrastatutory obligation by American but from its obligation to guarantee the payment of fuels and lubricants which is specifically required by the statute and undertaken by American as such an obligation.
Furthermore, unlike the bond in the Keyser case we find no provision in this bond which could be construed to give Cray rights in addition to or independent of those provided by the state. There is no provision in this bond which could be interpreted as were those in the Keyser case, to constitute a waiver by American of the statutory requirements that notice shall be given within ninety days after the claimant ceases to perform labor or furnish material and that a petition shall be filed within one year (§§ 17, 18 supra). Therrien v. Maryland Casualty Company, 97 N.H. 180, 84 A.2d 179. The statute creates Cray's rights and it follows that they can only be enforced...
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...statutory requirement that a statement of claim be filed with the designated party "is usually held fatal." American Fidelity Co. v. Cray, 105 N.H. 132, 136, 194 A.2d 763 (1963) ; see Fastrack Crushing Servs. v. Abatement Int'l/Advatex Assocs., 149 N.H. 661, 666, 827 A.2d 1019 (2003) (Fastr......
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