Carpenter v. Massachusetts Bonding & Ins. Co.

• Court: Maine Supreme Court
• Writing for the Court: Before WILLIAMSON; MARDEN
• Citation: Carpenter v. Massachusetts Bonding & Ins. Co., 206 A.2d 225, 161 Me. 1 (Me. 1965)
• Decision Date: 07 January 1965
• Parties: Frank S. CARPENTER, Treasurer of the State of Maine v. MASSACHUSETTS BONDING & INSURANCE CO. et al.

Page 225

206 A.2d 225

161 Me. 1

Frank S. CARPENTER, Treasurer of the State of Maine v. MASSACHUSETTS BONDING & INSURANCE CO. et al.

Supreme Judicial Court of Maine.

Jan. 7, 1965.

Linnell, Perkins, Thompson, Hinckley & Thaxter, by Franklin G. Hinckley and Charles P. Barnes, II, Portland, for plaintiff.

Verrill, Dana, Walker, Philbrick & Whitehouse, by Roger A. Putnam and Loyall F. Sewall, Portland, for defendant.

Before WILLIAMSON, C. J., and WEBBER, TAPLEY, SULLIVAN, SIDDALL and MARDEN, JJ.

MARDEN, Justice.

On appeal from a denial by the Superior Court, upon motion, to reject a referee's report awarding plaintiff damages.

A contract for the construction of the so-called State Office Building was executed by the State and one Rugo as prime contractor. A sub-contract for certain of the interior work was executed between Rugo and Sherman Plastering Corp. (Sherman). By the terms of the prime contract Rugo furnished a performance bond with the three defendant corporate sureties ¹, hereinafter referred to as 'defendant', running to the Treasurer of the State of Maine and conditioned upon his faithful performance of the contract and, later, conditioned upon satisfaction of all bills for labor, material and equipment contracted for or used by him. From controversies arising out of the sub-contract Sherman brought an action of debt on the bond, under our prerule practice in the name of the State Treasurer, to recover amounts alleged to be due him. The prime contractor, Rugo, is not a party defendant.

Sherman's claims are of two categories:

(a) For a balance due upon his subcontract, in the amount of $37,041.05.

(b) For work and material supplied as 'extras' to his sub-contract, in the amount of $16,531.01.

To these claims totalling $53,572.06, defendant pleaded multiple defenses, including failure of Sherman to comply with his contract, denial of authority from Rugo within the prime contract terms to perform some of the alleged extra work and denial of obligation by Rugo on the remaining items.

By agreement the matter was heard by a member of the Superior Court, as a referee, with right of appeal reserved, whose report favored Sherman as to the balance allegedly due under the sub-contract in the amount demanded.

$37,041.05

Extra No. 1:

Change in finish of certain interior columns, $9,540.00, which $ 954.00

amount had been paid except for the 10% retained.

Extra No. 4:

Removal of rubbish without chute. $ 1,948.10

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$39,943.15

Claims for the other extras were denied.

The referee also awarded interest upon the total award from November 20, 1956.

During trial the defendant offered evidence of charges which the prime contractor, Rugo, had against Sherman. Over objection defendant was allowed to introduce evidence de bene of such of these charges as were related to performance by Sherman of his sub-contract, but excluded evidence bearing upon non-performance-related claims. Ultimately the referee refused to consider as relevant any evidence of counter-claims by Rugo based upon the Rugo-Sherman contract.

To the acceptance of the referee's report defendant's points of appeal challenge the validity of:

(1) The refusal of the referee to consider 'back charges' of Rugo against Sherman;

(2) permitting Sherman to recover upon a bond not in existence at the time the prime contract was executed;

(3) finding that any breach of the contract by Sherman was immaterial;

(4) finding that failure by Sherman to request arbitration was not a bar to his complaint;

(5) finding that Sherman had insurance coverage as required by the prime contract;

(6) allowing so-called extras to Sherman which were not authorized in writing in accordance with the prime contract;

(7) allowing Sherman Extra No. 1 (finish of interior columns);

(8) allowing Sherman Extra No. 4 (work occasioned by absence of rubbish chute);

(9) finding defendants jointly and severally liable;

(10) ordering execution in the amount of his findings, and

(11) allowing interest from November 20, 1956.

These points of appeal will be considered in order.

Point 1. Back-Charges

This proceeding seeks to enforce defendant's guarantee. The prime contractor is not a party. Defendant evidenced no assignment to him of Rugo claims against Sherman. The referee held that Rumery Co. v. Merrill Trust Co. et al., 127 Me. 298, 143 A. 54, controls this phase of the issue. We agree, and excluding consideration of Rugo's alleged set-off charges was not error.

Point 2. Bond

Within the 'Instruction to Bidders' on the prime contract, which was executed June 9, 1954, the contents of which were a part of the contract, the successful bidder was obligated to deliver to owner an executed bond in the amount of 100% of the accepted bid 'as surety for the faithful performance of his contract and for payment of all persons performing labor or furnishing materials in connection therewith.' with.' (Plaintiff's Exhibit #1, Page 5.) Rugo seasonably furnished a bond for 'faithful performance' but the additional condition covering 'payment of all persons' was omitted. Although the prime contract was by reference made a part of the bond, after the work on the building was substantially completed the absence of the 'payment' condition in the bond was discovered and a new bond, including the previously omitted condition, was supplied, with an additional provision that 'the effective date of this bond shall be the 9th day of June, 1954.' Defendant's contention that there was no consideration for the latter bond must fail. The bond being under seal, consideration is presumed. Goodwin, Executor, Estate of Harry E. Gustin v. Cabot Amusement Company, 129 Me. 36, 41, 149 A. 574. There is no evidence to overcome the presumption. See also Van Valkenburgh v. Smith, 60 Me. 97, 98.

Points 3 and 5. Insurance Coverage

It is obvious, by stipulation, that Sherman seasonably applied and paid for the liability and workmans' compensation insurance required by Article 4 of his subcontract, and his insurer did in fact process a claim for personal injury sustained by one of his employees, although by inadvertence the certificate of such coverage was not seasonably filed with Rugo. While this tardiness was a breach of Sherman's obligation, Rugo's remedy which he chose not to apply, was contract provided (in Articles 4 and 6), and the certificates were ultimately supplied. Work and materials were accepted from Sherman for several months between the dates of technical default and the filing with Rugo of the certificates. Sherman's performance was accepted as full. No damage resulted from the lapse. The referee held this assigned breach as immaterial. We hold it to be a 'trifle', within the maxim de minimis non curat lex, which does not bar plaintiff's recovery. See Van Clief et al. v. Van Vechten et al., 130 N.Y. 571, 29 N.E. 1017, 1019 (1st Col.) (1892); LeRoy Dyal Co., Inc. v. Allen, 161 F.2d 152, [5, 6] 156 (4 CCA 1947); A. Belanger & Sons Inc. v. United States of America for the Use and Benefit of National U. S. Radiator Corporation, 275 F.2d 372, 376 (1 CCA 1960).

Point 4. Arbitration

Defendant's challenge of the proceeding upon the basis that plaintiff had not followed arbitration procedure is specifically waived in brief.

Points 6, 7, and 8. Extras

The resolution of these issues is factual, as to which the referee's finding, if supported by any credible evidence, is conclusive. Marshall, Collector v. Inhabitants of Town of Bar Harbor, 154 Me. 372, 380, 148 A.2d 687.

The factual dispute pertaining to Extra No. 1, is clarified significantly by documentary evidence in the way of letters, drawings or clauses in the contracts, upon which no finding other than that which the referee made could be maintained. Not only did the State concede that Sherman was requested to perform this extra work, but the cost of the work had been paid to Sherman during the course of construction, but for the ten percent held back under the terms of the prime contract. Liability of the State for this extra had been acknowledged before the building was accepted.

As to Extra No. 4 (rubbish chute), the prime contract (Plaintiff's Exhibit No. 1) section 15, paragraph 10, page 109 provides that Rugo should provide rubbish chutes for 'all contractors' which chutes were to be maintained during the progress of the work. Under prime contract section 13, paragraph 10, Sherman is charged with removing his surplus material from the premises.

Admittedly rubbish chutes never existed, but by agreement a hoist was installed and made available to Sherman in lieu of the chute. This hoist was removed by Rugo before Sherman completed his work and the charge presented by Sherman for this 'clean up' was allowed. The evidence supporting the referee's so finding is completely adequate. Point 9. Defendant's liability, nature of

Error is alleged in the referee's finding of 'joint and several' liability. As we read the report, the liability was imposed as 'joint.' The obligation of the bond was assumed 'jointly and severally' and the respective 'several' portions of the penal sum each exceed the total award. The point raised by defendant is not clear and was not briefed. We find no error.

Point 10. Order for Execution.

Technically the authority of the referee ended at his determination of condition (of the bonds) broken and estimate (assessment) of the damage (Chapter 113, § 53, R.S.) Inhabitants of Machiasport v. Small et al., 77 Me. 109, 111. Reference to issue or stay of execution was a matter for the court upon action upon the acceptance of the report, but such orders from the standpoint of the reference are 'mere surplusage, unless such parts affect, to the prejudice of the excepting party, the portions of the award which are authorized and valid.' Hexter v. Equitable Fire and Marine Insurance Company, 123 Me. 77, 78, 121 A. 555. There is no prejudice to the defendant to be found in this surplusage.

Point 11. Interest

The date or dates...