Concrete Steel Company v. Metropolitan Casualty Insurance Company of New York.

• Decision Date: 03 July 1930
• Docket Number: 13,749,13,751
• Citation: 173 N.E. 651,95 Ind.App. 649
• Parties: CONCRETE STEEL COMPANY METROPOLITAN CASUALTY INSURANCE COMPANY OF NEW YORK. HERMITAGE PORTLAND CEMENT COMPANY v. METROPOLITAN CASUALTY INSURANCE COMPANY OF NEW YORK. TRUSCON STEEL COMPANY v. METROPOLITAN CASUALTY INSURANCE COMPANY OF NEW YORK.
• Court: Indiana Appellate Court

173 N.E. 651

95 Ind.App. 649

CONCRETE STEEL COMPANY v. METROPOLITAN CASUALTY INSURANCE COMPANY OF NEW YORK.

HERMITAGE PORTLAND CEMENT COMPANY v. METROPOLITAN CASUALTY INSURANCE COMPANY OF NEW YORK.

TRUSCON STEEL COMPANY v. METROPOLITAN CASUALTY INSURANCE COMPANY OF NEW YORK.

Nos. 13,749, 13,751

Court of Appeals of Indiana

July 3, 1930

Rehearing denied November 19, 1930. Transfer denied February 2, 1933.

From Vanderburgh Circuit Court; Charles P. Bock, Judge.

Separate actions by the Concrete Steel Company, the Hermitage Portland Cement Company and the Truscon Steel Company against Charles F. Hanely and Larkin E. Crouch, as principals on a contractor's bond, and the Metropolitan Casualty Insurance Company of New York as surety thereon. From the judgments rendered therein for defendants on demurrers to the complaints, the plaintiffs appealed.

Reversed.

Will R Manier, Jr., Larkin E. Crouch, Frank H. Hatfield, Louis L Roberts, for appellants.

Pickens, Davidson, Gause, Gilliom & Pickens, and Noel, Hickam, Boyd & Armstrong, for appellees.

MCMAHAN J. Nichols, J., dissents and reserves right to file dissenting opinion.

OPINION

MCMAHAN, J.

On May 11, 1927, Charles F. Hanley and J. Howard Laughlin, doing business under the name of Peerless Constructing Company, entered into a contract with the city of Tell City for the improvement of certain streets, and in that connection, they, as principals, with appellee insurance company as surety, executed a bond in the sum of $ 119,000, in which the city is named as obligee, conditioned that the construction company should faithfully and fully perform the contract according to the strict terms thereof, and expressly stipulating that "any person or persons, firm or corporation having unpaid claims for labor performed on the improvements required by this contract and required by these specifications, or for tools or materials furnished them to be used in or upon said improvement, may recover the same in an action or actions in their own names on this bond."

The Concrete Steel Company, appellant in No. 13,749 and the Truscon Steel Company, appellant in No. 13,751, each furnished said contractors steel and iron required and used in constructing said streets under said contract. The Hermitage Portland Cement Company, appellant in No. 13,750, furnished cement. Each appellant, as plaintiff, filed a complaint against said contractors and said insurance company on said bond to recover the balance owing each of them for the material so furnished and used in the construction of said streets. A demurrer was sustained to each complaint. This was followed by an appeal by each plaintiff and a consolidation of the three appeals for briefing and decision.

The complaint neither alleges that the plaintiff within sixty days after the last item of material was furnished nor at any other time, filed with the common council of the city or with any other board or office of the city, a verified statement of the amount due and owing plaintiff by said contractor. Each complaint was filed within one year from the date when the material was furnished.

Section 10284 Burns 1926, Clause 25, § 53, Acts 1905, [95 Ind.App. 653] p. 246, gives the common council of every city the power "to compel persons about to undertake dangerous improvements to execute bonds, with sufficient surety, conditioned that the owner or contractor will pay all damages that may be sustained by any person from such work." Section 10342 Burns 1926, § 95 of the Municipal Code of 1905, Acts 1905, p. 281, gives the council authority to "impose further conditions upon bidders with regard to bond and surety, guaranteeing the good faith and responsibility of such bidders, or insuring the faithful completion of such work according to contract, or for keeping the same in repair for any length of time, or for any other purpose." This section gave the common council of the city of Tell City authority to require a bond for the protection of materialmen and laborers, as well as for the protection of the city, and each appellant was authorized to maintain an action thereon in its own name for materials furnished. Aetna Indemnity Co. v. Indianapolis, etc., Fuel Co. (1912), 178 Ind. 70, 98 N.E. 706; U. S. Fidelity, etc., Co. v. American Blower Co. (1908), 41 Ind.App. 620, 84 N.E. 555. There is nothing in the above mentioned sections of the statute requiring that materialmen shall file with the common council, or with any other officer or representative of the city, a verified statement of his account, or a statement showing the amount due and owing on his account.

Appellee insists there can be no recovery for the reason that neither appellant, within sixty days after the last item of material was furnished, filed with an officer of the city a duplicate verified statement of the amount due and owing in accordance with the provisions of § 6122 Burns 1926, which is section 2, Ch. 173, Acts 1911, as amended in 1925, Acts 1925, p. 129.

Section 1 of the act of 1911, provides that all boards of trustees of state institutions and commissioners appointed for the building of state buildings, county commissioners, township trustees, or any county or township boards authorized to contract for any public building or improvement, and officers or boards of state, county or township authorized to distribute funds and pay contractors, shall withhold full payment to the contractor until such contractor has paid the subcontractors or laborers employed, all bills due and owing them, with provision that if there is not a sufficient amount owing the contractor to pay such bills in full, the same shall be paid pro rata, and that the subcontractors or laborers shall file with the proper officer or board or commission their claim within thirty days from the completion of the work. Section 2 of this act provides that in all contracts for the construction of the state, county or township buildings or other public improvements, provision shall be made in the contract for the payment of labor and subcontractors by withholding funds sufficient from the contract price to pay for all labor and material and subcontractors, and that the bond given by the contractor be conditioned so that the sureties shall be liable for labor, material, and to the subcontractor, provided such parties shall file their claims within thirty days after the labor is performed or the material furnished.

Section 3 is as follows: "This act shall not be construed as conflicting with any other laws for the protection of labor, subcontractors or materialmen, but is supplemental thereto."

In Illinois Surety Co. v. State ex rel. (1911), 69 Ind.App. 450, 122 N.E. 30, 31, George B. Lynch entered into a contract for the improvement of certain highways pursuant to § 8393 Burns 1926, § 7723 Burns 1914, Acts 1905, p. 521, § 74, which provides inter alia that each bidder shall, with his proposal submit his bond payable to the state, conditioned for the faithful performance of the work, and that such bond shall be for the benefit of any person who shall suffer loss or damages by reason of any failure or neglect to pay for any labor or material. The contract and bond involved in that case were exacted in November, 1911, which was after the Act of 1911 went into force. The relator, a materialman, failed to file its claim with the board of commissioners within thirty days after furnishing the material. In response to the contention of the surety that there could be no recovery because the claim had not been filed in accordance with the Act of 1911, the court said: "But that procedure is not exclusive, and the failure to adopt the method certainly did not preclude the relator from obtaining judgment against Lynch. But appellant insists that because of that failure there can be no recovery against the surety on the bond. There is nothing in the statute, nor in the contract for the performance of which the bond was given, which made it obligatory on the relator to file its claim with the board of commissioners, either for its own benefit or for the protection of the surety on the bond. Since the procedure provided by the statute is a mere privilege, of which the relator might have availed itself at its option, appellant cannot escape liability merely because the relator did not intercept the contractor's pay and apply it on the claim." To the same effect see Equitable Surety Co. v. Indiana Fuel, etc., Co. (1919), 70 Ind.App. 75, 123 N.E. 22, where the court, speaking of the Act of 1911, said: "This statute was designed to further protect the parties named therein, as it expressly declares. The construction thereof contended for by the appellant would deprive these persons of rights they theretofore had, and make any right they sought to enforce dependent upon the doing by claimant of a preliminary act, filing his claim within thirty days, etc. Such a construction would turn the act in question in one for the protection of bondsmen on contractors' bonds, by having the effect of limiting the liability, and would in no way give additional protection to those who are, by its express terms, made within its provisions."

These two cases were followed in U. S. Fidelity, etc., Co v. State, ex rel. (1919), 71 Ind.App. 648, 125 N.E. 420, and in Equitable Surety Co. v. State, ex rel. (1919), 71 Ind.App. 702, 125 N.E. 202, and it is a well settled rule of statutory construction that where a statute has been construed by the courts of a state, and is thereafter substantially re-enacted, the legislature thereby adopts such construction unless the contrary is clearly shown by the language of the act. State v. Ensley (1912), 177 Ind. 483, 97 N.E. 113, Ann. Cas. 1914D, 1306. In view of this rule we hold that the legislature,...