Brower Co. v. Noise Control of Seattle, Inc.

• Decision Date: 06 May 1965
• Docket Number: No. 37669,37669
• Citation: 401 P.2d 860,66 Wn.2d 204
• Parties: The BROWER COMPANY, a Washington corporation, Appellant, v. NOISE CONTROL OF SEATTLE, INC., a corporation, Ernest A. Jonson, Seattle-First National Bank, a corporation, General Insurance Company of America, a corporation, Sound Construction & Engineering Company, Respondents.
• Court: Washington Supreme Court

Page 204

66 Wn.2d 204

401 P.2d 860

The BROWER COMPANY, a Washington corporation, Appellant, v. NOISE CONTROL OF SEATTLE, INC., a corporation, Ernest A Jonson, Seattle-First National Bank, a corporation, General Insurance Company of America, a corporation, Sound Construction & Engineering Company, Respondents.

No. 37669.

Supreme Court of Washington, Department 2.

May 6, 1965.

Lycette, Diamond & Sylvester, John P. Lycette, Jr., Seattle, for appellant.

Donald E. Spickard, Bruce Maines, Miracle, Treadwell & Pruzan, Kenneth Treadwell, Seattle, for respondents.

BARNETT, Judge. ¹

This appeal involves an action brought by the plaintiff (appellant) on a building contract to collect the entire contract balance due, coupled with an action to foreclose the lien on the real property upon which the labor and materials were furnished in the performance of a subcontract. Also involved is an alternate action by the plaintiff to collect the amount earned under the subcontract against a performance and payment bond executed by the defendant (respondent) General Insurance Company of America (hereinafter referred to as General Insurance). As additional feature of this case concerns itself with the garnishment by plaintiff of certain sums of money which were due and owing to the defendant (respondent) Noise Control of Seattle, Inc. (hereinafter referred to as Noise Control). Plaintiff and defendants are corporations authorized to do business in this state.

The defendant (respondent) Seattle-First National Bank (hereinafter referred to as Seattle-First) and Sound Construction & Engineering Company (hereinafter referred to as Sound Construction) on January 30, 1962, entered into a contract for the construction of a structure known as a data processing center in Seattle. On February 8, 1962 Sound Construction entered into a subcontract with defendant Noise Control for the completion of certain work on the data processing center. The subcontract called for Noise Control to do certain lath and plaster, acoustical, marblecrate, rigid insulation and cemesto panels. On March 2, 1962, Noise Control entered into a sub-subcontract with the plaintiff, The Brower Company, to perform certain work called for under the subcontract of February 8, 1962, entered into between Sound Construction and Noise Control.

Plaintiff performed all of the work called for under its agreement. The agreed price for the work was $19,350. In addition to the work called for under the sub-subcontract, plaintiff performed certain extra work amounting to $414.50, making a total of $19,764.50 due plaintiff. The Superior Court of King County found that the reasonable value of the labor performed on the job was $7,968.80 and the reasonable value of the materials supplied was $11,795.70.

A notice of claim of lien was filed by plaintiff on November 15, 1962, with the Auditor of King County, covering the real property upon which the data processing center was being built for Seattle-First. The lien was filed within 90 days of the last delivery of materials and performance of work. Plaintiff commenced furnishing materials on April 5, 1962. The last day labor and materials were performed and supplied was October 23, 1962. Notice was sent by registered mail on October 29, 1962, to Sound Construction, Seattle-First, and General Insurance that materials were being supplied. However, no materialman's notice pursuant to RCW 60.04.020 had previously been mailed.

General Insurance executed a performance and payment bond as surety with Noise Control as principal on February 16, 1962. The bond provided for the payment to all persons supplying labor and materials and other obligations incurred by the principal in the event of default by Noise Control. On October 19, 1962, Noise Control appointed Ernest A. Jonson as liquidating trustee. This was done pursuant to an action by two thirds of the stockholders of Noise Control and not pursuant to a court order. The effective date of the appointment was October 22, 1962, when the stockholders' resolution was filed with the Secretary of State and the Auditor of King County. Noise Control was insolvent at that time.

Sound Construction was garnished on January 8, 1963, and it answered that there was an unexpended balance due Noise Control of $11,622.24. Of this amount, the court directed that $7,968.80 be treated as funds paid by Sound Construction into court on behalf of Seattle-First and the balance of $3,653.44 be received by the liquidating trustee.

On March 28, 1963, a writ of garnishment was issued against Cawdrey and Vemo, Inc., and it answered owing $45,922.50 to Noise Control. The trial court held that the plaintiff was not entitled to garnish this amount and it is now in the custody of the liquidating trustee.

The court granted a recovery to plaintiff against Ernest A. Jonson, as liquidating trustee for Noise Control, in the sum of $19,764.50, and also ordered foreclosure of appellant's lien in the amount of the labor performed on the subcontract, $7,968.80, part of the garnished amount owing to Noise Control from Sound Construction. The court denied foreclosure of the lien as to the part of the subcontract attributable to materials that were supplied, and denied recovery by the plaintiff against General Insurance based upon the second alternate cause of action. No interest, attorneys' fees or costs were granted to the plaintiff against Seattle-First.

Assignments of error present questions which we will discuss in the order they were raised.

The first assignment of error concerns the trial court's disallowance of the lien for materials supplied.

Appellant failed to file with the owner a notice of intention to claim a lien for materials within 60 days of the furnishing of the first materials to the job. Is appellant entitled to a lien? Appellant contends that a reading of RCW 60.04.010, 60.04.020, 60.04.130 together eliminates the requirement of notice for furnishing materials.

Appellant's position is that a subcontractor has a lien for his contract price and does not have to give notice to enforce his lien as to the materials thereof and that any Washington cases to the contrary should be overruled.

However, this court, in the following cases, has construed the statutes contrary to appellant's contention: Heim v. Elliott, 66 Wash. 361, 119 P. 826; Hallett v. Phillips, 73 Wash. 457, 132 P. 51; Hayes v. Gwinn, 49 Wash.2d 908, 307 P.2d 1063. We adhere to those decisions. The legislature has not changed the statutes since those decisions were rendered. In not so doing, we think it has acquiesced in our interpretation of them.

The second assignment of error raises the question of whether the appellant has a right of action against General Insurance by virtue of the performance and payment bond executed by them, wherein Noise Control was the principal. The bond provided for the payment to all persons supplying labor and materials and other obligations incurred by the principal in the event of default by Noise Control. The bond of the subcontractor expresses no intention that persons in appellant's position should have a right to sue on the bond. Appellant argues that, even though the owner is the only obligee in the bond and even though there is no provision that it shall inure to the benefit of laborers or materialmen, they may avail themselves of the security thereof. This court, however, has ruled that a third party supplier of labor and material has no right against a common law bond on private construction unless the terms of the bond expressly give that right.

See Armour & Co. v. Western Constr. Co., 36 Wash. 529, 78 P. 1106; Spokane Merchants Ass'n v. Pacific Surety Co., 86 Wash. 489, 150 P. 1054; Rust v. United States Fidelity & Guar. Co., 87 Wash. 93, 151 P. 248; DuPont DeNemours Powder Co. v. National Surety Co., 90 Wash. 227, 155 P. 1050; Forsyth v. New York Indem. Co., 159 Wash. 318, 293 P. 284; Boise Cascade Corp. v. Pence, 64 Wash.Dec.2d 812, 394 P.2d 359.

We reiterated the third party beneficiary rule in this state in Priestley v. Peterson, 19 Wash.2d 820, 838, 145 P.2d 253, 262: 'In the case of Pacific Mercantile Agency v. First Nat. Bank, 187 Wash. 149, 60 P.2d 6, 7, we said:

"Before a third party can recover upon a contract made for his benefit and to which he is not a party, it must appear to have been the intention of the parties to secure to him personally the benefit of the provisions of the contract. * * *

"Contracts which only create a general obligation to pay the costs of performing a particular undertaking do not show an intention to make such contract for the benefit of a third person who may have furnished materials necessary to the performance thereof."

The trial court's ruling was in conformity with the above decisions to which we adhere.

By assignments of error No. 3 and No. 4, the right to costs, interest, and attorneys' fees is asserted. The appellant permitted the inspection of its records to determine the breakdown between labor and material, but it refused to make this breakdown itself. Seattle-First was willing to pay the labor lien at all times before suit. The duty of making the breakdown was that of appellant.

The allowance of attorneys' fees and costs is discretionary. The pertinent parts of RCW 60.04.130 read: '* * * The court may allow * * * costs * * * and a reasonable attorney's fee * * *.'

Under the circumstances of this case, the trial court did not abuse its discretion in not allowing attorneys' fees and costs. See Hughes Co. v. Flint, 61 Wash. 460, 112 P. 633; Walsh Services, Inc. v. Feek, 45 Wash.2d 289, 274 P.2d 117; Forrester v. Craddock, 51 Wash.2d 315, 317 P.2d 1077.

The granting of or the failure to grant interest presents a different problem from the statutory discretionary power available to the trial court in the granting of costs and attorneys' fees. The statute does not provide for the payment of interest. There are, however, numerous cases in...