Fidelity & Deposit Co. of Md. v. Whitson

• Decision Date: 28 December 1960
• Citation: 10 Cal.Rptr. 6,187 Cal.App.2d 751
• Court: California Court of Appeals Court of Appeals
• Parties: FIDELITY AND DEPOSIT COMPANY OF MARYLAND, a Corporation, Plaintiff and Respondent, v. Carl WHITSON, Defendant and Appellant. Civ. 24869.

Page 6

10 Cal.Rptr. 6

187 Cal.App.2d 751

FIDELITY AND DEPOSIT COMPANY OF MARYLAND, a Corporation, Plaintiff and Respondent, v. Carl WHITSON, Defendant and Appellant.

Civ. 24869.

District Court of Appeal, Second District, Division 1, California.

Dec. 28, 1960.

Rehearing Denied Jan. 13, 1961.

Hearing Denied Feb. 21, 1961.

Maurice H. Wallbert, Los Angeles, for respondent.

Carl Whitson, in pro. per., for appellant.

LILLIE, Justice.

Plaintiff's action sought to recover from defendant, as indemnitor under a contract of indemnity, the sum of $3,529.05 plus interest, reasonable attorneys' fees and costs. Of this sum, $2,500 represented monies paid by plaintiff as surety in compromise and settlement of a claim asserted under a labor and material bond executed on a construction job for the Long Beach Unified School District; the balance consisted of $1,000 paid by plaintiff to its counsel for services rendered in connection with matters said to have been covered by the contract of indemnity, and $29.05 expended in court costs. The trial court rendered judgment as prayed for, together with an additional award of $1,000 counsel fees for maintaining the instant action. Defendant has appealed from the judgment; plaintiff asks this court, in the event of an affirmance and pursuant to a pertinent paragraph of the contract, for an order awarding attorneys' fees on appeal. California Viking Sprinkler Co. v. Cheney, 182 Cal.App.2d 564, 6 Cal.Rptr. 197.

The salient facts, either admitted by defendant or otherwise found to be true, are as follows: On December 19, 1949, one Curtis, as contractor, entered into a written contract with the Long Beach Unified School District to construct a lunch room assembly building at a named Long Beach elementary school; on December 22, 1949, and in connection with such contract, Curtis requested plaintiff to execute and furnish the performance and labor and material bonds required by law (Govt.Code, § 4200 et seq.); at or about the same time defendant also requested plaintiff to execute for and on behalf of Curtis the required bonds, agreeing to furnish plaintiff with an 'Agreement of Indemnity' in connection therewith, which agreement was subsequently executed by defendant on February 17, 1950; following his entry upon the job contracted for, Curtis neglected to pay numerous claims of laborers, materialmen and subcontractors who, in due time, asserted their claims against plaintiff; defendant was advised by plaintiff that these claims were being asserted; plaintiff was required to, and did, employ counsel with respect to the processing of the aforesaid claims, all of which were paid, save one, from funds held by the school district or contributed by Curtis; the one exception just mentioned, that of Harbor Boat Building Company for labor and materials (plus attorney fees and costs), became the subject matter of a lawsuit and was settled before trial for $2,500, for which sum (and counsel fees in connection therewith) this action seeks reimbursement. Finally, the following matters alleged in the complaint were admitted by the failure of defendant to deny: On February 27, 1951, defendant instituted an action against plaintiff seeking declaratory relief respecting his liability under the 'Agreement of Indemnity'; plaintiff (as a defendant in said action) employed counsel to represent it and became obligated to pay reasonable attorney's fees; on motion of plaintiff, said action was subsequently dismissed for lack of prosecution.

Appellant's briefs are in the nature of a 'shotgun' attack on the judgment below; contrary to settled principles of appellate practice, they have placed an undue burden on this court to ascertain the exact points contended for ¹; we have determined, however, that appellant basically is claiming that the evidence is insufficient to support the various findings of the trial court. The claim is without merit. In the discussion which follows, we shall give our reasons for the conclusion reached, touching upon such of appellant's points as require comment.

The evidence amply supports the finding that an indemnity agreement was executed and delivered by appellant to respondent. Robert Hecht, employed by respondent for approximately thirty-three years, testified that he and a fellow employee met appellant at a Long Beach used car lot, then operated by appellant, about one week before the bonds on the school job were executed; they told appellant that their employer was reluctant to proceed 'without his (appellant) being in the picture'; appellant stated then or later (but prior to the execution of the bonds) that he would furnish an indemnity agreement to respondent on the particular project; Mr. Hecht also testified that respondent would not have executed the bonds except for appellant's promise in this connection. The agreement itself was introduced into evidence; it bears the signatures of appellant and Curtis, dated February 17, 1950, the signatures being acknowledged before a notary public the same day. Shown the original court file in the declaratory relief action filed by him against respondent, appellant testified that he signed the verification in blank (as was his practice when he was a party to a lawsuit); his attention was directed to paragraph VII of the complaint therein reading as follows: 'At the time of the execution of the faithful performance bond mentioned in paragraph VI above, the defendant Fidelity & Deposit Company requested and obtained from plaintiff his agreement to indemnify said defendant from any loss that he might suffer as a result from being held liable on said bond'; as to the foregoing allegations, appellant stated: 'I think they are generally true. I think the amount is true and I think that one is true.' There was evidence that the agreement was returned by appellant to respondent, the face of the instrument bearing the imprint 'Contract Dept. Feb. 27, 1950.'

Appellant contends that there was no consideration for the agreement; he argues that the 'alleged Agreement of Indemnity was signed and dated * * * about two months after the bond to pay labor and material was executed,' hence consideration failed in that the indemnity contract was not executed simultaneously with the principal obligation, citing 42 C. J.S. Indemnity § 6(2), p. 571; further, he asserts, there was no compliance with Section 2793, Civil Code, providing that a surety obligation must be in writing. First, appellant's reference to Section 2793, supra, presumably is based on the oral understanding between the parties in December of 1949 pursuant to which the written agreement was entered into; since the oral guaranty was later acted upon and fully executed, the point is without merit. Salomon v. Ellis, 34 Cal.App.2d 672, 679, 94 P.2d 393. Second, the rule cited by appellant (42 C.J.S. page 571, supra) also declares that a written agreement to indemnify need not be executed simultaneously with the contract indemnified if it be executed in pursuance of a prior agreement therefor. Fidelity & Deposit Co. of Maryland v. O'Bryan, 180 Ky. 277, 202 S.W. 645, 646, L.R.A.1918E, 574 [cited by appellant]; Title Guaranty & Surety Co. of Scranton, Pa. v. Packard, Co., 75 Wash. 178, 134 P. 812; 167 A.L.R. 1184-1185, citing generally McDonough v. Chu Chew Shong, 21 Cal.App.2d 257, 68 P.2d 976. There is here, of course, evidence of a prior agreement pursuant to which the contract in suit was subsequently executed; if this fact were not sufficiently dispositive of the matter, it also appears that appellant neglected to plead lack or failure of consideration as an affirmative defense and he is now foreclosed from urging the question. Williams v. Kinsey, 74 Cal.App.2d 583, 603, 169 P.2d 487.

Next the trial court found that respondent suffered a loss, reimbursable under the provisions of the contract of indemnity, by the payment of the sum sued for; specifically, the court found that the compromise and settlement of the Harbor Boat Building lawsuit by payment of $2,500 was entered into in good faith and upon recommendation of its counsel and in the honest belief that respondent was liable to said claimant, that respondent paid its counsel $1,000 for services rendered in the processing of claims connected with the school job including the Harbor Boat Company settlement as well as the defense of appellant's declaratory relief action, and that such sum was a reasonable fee. An indemnity agreement is to be construed like any other contract with a view to determining the actual intention of the parties; no artificial rules apply. United Air Lines, Inc. v. Western Air Lines, Inc., 132...