Federal Surety Co. v. Basin Const. Co.

• Decision Date: 02 December 1931
• Docket Number: 6821.
• Citation: 5 P.2d 775,91 Mont. 114
• Parties: FEDERAL SURETY CO. v. BASIN CONST. CO. et al.
• Court: Montana Supreme Court

5 P.2d 775

91 Mont. 114

FEDERAL SURETY CO. v. BASIN CONST. CO. et al.

No. 6821.

Supreme Court of Montana

December 2, 1931

Rehearing Denied Dec. 28, 1931.

Appeal from District Court, Lewis and Clark County; A. J. Horsky Judge.

Action by the Federal Surety Company against the Basin Construction Company and another. From a judgment for plaintiffs defendants appeal.

Judgment modified, and, as modified, affirmed.

T. B Weir and Harry P. Bennett, both of Helena, for appellants.

Gunn Rasch, Hall & Gunn, of Helena, for respondents.

GALEN J.

This action was instituted by the plaintiff, Federal Surety Company, to recover the sum of $13.989.13 from the defendants, Basin Construction Company and the Fidelity & Deposit Company, for an alleged breach of contract for the construction of a portion of a federal aid highway between Billings and Hardin. A jury was waived and the cause was tried to the court, after the conclusion of which the court made and entered its findings of fact and conclusions of law in accordance with the prayer of the plaintiff's complaint awarding to the plaintiff the sum of $10,139.75 for loss of profits, $2,849.49 for money actually expended in excess of the amount received from the state of Montana on completion of the work, together with interest on $12,989.13, the total of these sums, from July 29, 1929, and additionally the sum of $1,000 found to be a reasonable attorney's fee incurred in prosecution of the action. Judgment was entered accordingly, from which the defendants have appealed.

Defendants have assigned many errors alleged to have been committed as reason for reversal of the judgment, but in our opinion but two questions are necessary to be considered in disposition of this appeal, viz.: (1) Is the complaint sufficient upon which to predicate the judgment; and (2) did the court err in allowing attorney's fees to the plaintiff as a part of its damages?

In plaintiff's complaint it is alleged that on or about March 21, 1928, one C. W. Eggers entered into a written contract with the state of Montana through the state highway commission "to furnish and deliver all the materials and to furnish all tools, machinery and implements, and to do and perform all the work and labor in the construction" of the portion of the highway described in consideration of the sum of $77,458.38; that by the terms of such contract the contractor was to be paid and receive the sum of $2.40 per cubic yard for crushed gravel surfacing in place; that Eggers as principal, and the plaintiff as surety, made, executed, and delivered to the state of Montana a bond for the faithful performance of the contract, which, among other things, required the work to be completed on or before November 1, 1928, otherwise that the contractor should be subject to the payment of a penalty of $15 per day for every day thereafter the completion of the work was delayed; that on January 15, 1929, Eggers having defaulted in the performance of his contract, the plaintiff took over the work and became subrogated to the rights of Eggers thereunder; that on the 30th day of January, 1929, the plaintiff for the purpose of completing the work in accordance with the Eggers' contract, and with the consent of the state highway commission, entered into a written agreement with the defendant Basin Construction Company, by which the latter was to surface the road with gravel in accordance with the plans and specifications of the state highway commission and to the satisfaction of such commission, for the sum of $1.90 per cubic yard, for the faithful performance of which contract the Fidelity & Deposit Company of Maryland became surety. By the terms of the last-mentioned contract, it in part provided:

"That, whereas, the party of the first part has taken over the contract between the State of Montana and C. W. Eggers of Great Falls, Montana, doing business under the name and style of the Good Roads Construction Company, for the construction of Federal Aid Project 187-D, Unit 8, also known as a part of the Billings-Hardin road, and whereas party of the first part is desirous of completing said Project *** by subletting the remainder of the work to be done under said contract, consisting of the crushing and spreading of the gravel only, to the satisfaction of the State Highway Commission;

Now, Therefore, the party of the second part, for and in consideration of the payment to be made to it by the said party of the first part, as hereinafter provided, does by these presents hereby covenant, contract and agree to finish the graveling only, on Federal Aid project known as Project No. 187-D, Unit 8, said graveling consisting of crushing and spreading between 14,000 and 16,000 cubic yards of gravel, according to the plans and specifications of the State Engineers of the State of Montana, and to furnish all necessary equipment and labor to perform the crushing and laying of the gravel, in a good and workmanlike manner so as to meet with the approval of the State Highway Commission and to do whatever trenching is necessary to complete the job, and said party of the second part further covenants and agrees to move onto the said project and start work as soon as weather conditions during the year 1929 permit, and to complete said work as soon as possible, weather permitting; using both day and night shift;

And the party of the first part hereby covenants, contracts and agrees to put the road bed on said project in perfect condition for graveling, it being understood that party of the second part is to do no earth work except the trenching and it being further understood by the parties hereto that the three and one-half miles of road at the West end of said project has already been completed by C. W. Eggers and that no work is to be done by party of the second part on said three and one-half miles."

In the complaint it is further alleged that after the plaintiff had entered into the contract with the Basin Construction Company, and executed bond for its faithful performance signed by the Fidelity & Deposit Company, as surety, it defaulted in performance and without the plaintiff's consent abandoned the contract, and made a pretended assignment thereof to one S. F. Ronde, an individual doing business under the name and style of S. F. Ronde, Inc. "and thereafter refused to perform or carry out any of the terms and conditions of said contract, or at all"; that it failed, neglected, and refused to put onto the project sufficient equipment and men to operate both day and night shifts, as required by the terms of the contract and as demanded by the plaintiff, or "to prosecute the work with reasonable diligence so as to complete the same as soon as possible, as required by said contract, and refused to supply additional equipment and labor to properly complete said...