General Asbestos & Supply Co. v. Aetna Casualty & Surety Company of Hartford

• Decision Date: 20 December 1935
• Docket Number: 15,037
• Citation: 198 N.E. 813,101 Ind.App. 207
• Parties: GENERAL ASBESTOS & SUPPLY COMPANY v. AETNA CASUALTY & SURETY COMPANY OF HARTFORD
• Court: Indiana Appellate Court

198 N.E. 813

101 Ind.App. 207

GENERAL ASBESTOS & SUPPLY COMPANY v. AETNA CASUALTY & SURETY COMPANY OF HARTFORD

No. 15,037

Court of Appeals of Indiana

December 20, 1935

From Marshall Circuit Court; Albert B. Chipman, Judge.

Action by General Asbestos & Supply Company against Aetna Casualty & Surety Company of Hartford, Connecticut, on contractor's construction bond, submitted as agreed case. From a judgment for defendant, plaintiff appealed.

Reversed.

Eugene J. Payton and Aaron H. Huguenard, for appellant.

Noel Hickam, Boyd & Armstrong and Frank Martindale, for appellee.

OPINION

WOOD, J.

This is an appeal by the appellant from a judgment rendered against it by the Marshall Circuit Court on a trial by agreed case submitted to said court in accordance with secs. 2-2201 to 2-2203, inclusive, Burns 1933, Baldwin's Ind. St secs. 362 to 364, inclusive.

The facts contained in the agreed case necessary to be incorporated in this opinion for a proper consideration of the questions presented by this appeal may be summarized as follows. On April 5, 1929, the School City of South Bend entered into a written contract and bond with Gerber and Haley Company, a partnership, as general contractors, for the erection of an addition to the "James Whitcomb Riley School" in said city. The appellee joined in the execution of this contract and bond, as surety of its performance on the part of the general contractors. Among the terms and conditions contained in the contract and bond are the following:

"Provided that nothing herein contained nor any variation from the amount of the instalments of the contract price or from the manner and time of their payment shall be construed as impairing the right of the Owner or of those to whose benefit the bond given herein shall inure, to hold the Contractor and Surety liable on this contract and bond, for any breach of the terms and conditions of the same, nor as imposing upon the Owner any obligations to laborers, materialmen or sub-contractors or other persons except as to moneys coming to the Contractor hereunder and retained for their benefit. And said Contractor and said Surety agree that said Contractor and its successors or assigns, whether by operation of law or otherwise, and all its subtractors hereunder shall pay all indebtedness which may accrue to any person, firm or corporation on account of any labor or service performed or materials furnished or services rendered in the construction and erection of said building.

"FOR THE FAITHFUL PERFORMANCE of all and singular the terms, agreements, stipulations, conditions and covenants in this contract contained and to be observed and performed by the Contractor, the Contractor, as principal, and the Surety herein, in consideration of the premises, hereby jointly and severally bind themselves and their respective heirs, executors, administrators, successors, personal representatives and assigns unto the State of Indiana and said Owner in the principal sum of Ninety-four Thousand Nine Hundred Fifty Dollars ($ 94,950.00) lawful moneys of the United States.

"It is understood and agreed that the Surety expressly waives whatever right it may have to be notified of any alterations, modifications and additions which may be directed by the Architect or Owner under the terms hereof, and also waives whatever right it may have to be notified of, or consent to, any extension of time for the performance of this contract which may be allowed by the Architect or Owner, and acknowledges itself to be bound for all such alterations, modifications, additions and extensions as though proper notice thereof had been given to it and it had consented thereto. And it is expressly agreed that no change, modification, omission or addition in and to the terms or conditions of this contract, said plans, specifications, drawings or profiles or any irregularity or defect in this contract or in the proceedings preliminary to the letting and awarding thereof, shall in any wise affect or operate to relieve, release or discharge said Surety; and that the provisions and conditions of the Act of the General Assembly of the State of Indiana entitled 'An Act concerning Public Building and Public Improvement Contracts and declaring an emergency,' approved March 4th, 1911, as amended, including the amending act set forth in Chapter 44 of the Acts of said General Assembly in the Acts of 1925, shall be, operate and become a part of the terms of this contract and bound for the work covered by this contract, and this contract is made subject thereto.

"It is further agreed and understood that this bond shall directly inure to the benefit of all subcontractors, laborers, materialmen and those performing service in relation to or in connection with the construction and erection of said building who may have furnished or supplied labor, material or service for and on account of the construction of said work or directly in connection therewith or in relation thereto; provided that such sub-contractors, laborers, materialmen and those performing service in relation to or in connection with the construction and erection of said building, shall file their claims with said Owner within the time and in the manner required by law." (Our italics.)

On April 17, 1929, appellant entered into a written contract with the general contractors, to furnish and install roofing and sheet metal work required in the erection of said addition, which contract was fully executed by appellant. On August 31, 1929, when the last labor was performed, and material furnished, there was a balance due and unpaid to the appellant on its contract of $ 1,255.35, and there had been long and unreasonable delay in the payment of this sum, and it was agreed that if the court found for appellant, it should enter judgment for the sum of $ 1,255.35, with interest at the rate of six per cent per annum from February 22, 1930, to the date of such judgment. On February 19, 1930, the appellant filed with the school city a verified statement in duplicate of the amount due and owing to it for the material furnished and installed in said addition pursuant to its contract with the general contractors, and on February 22, 1930, the school city delivered one of these verified copies to the appellee. This agreed case was submitted April 10, 1933. On January 23, 1932, Gerber and Haley as individuals and as co-partners, were discharged in bankruptcy and released from liability on appellant's claim. Appellant claimed that the appellee was liable to it for the balance due on its contract with the general contractors, and the appellee denied liability solely on the ground that the appellant did not within sixty days after the completion of its contract with the general contractors and within sixty days after the last item of material and labor had been furnished under said contract file with the school city a verified statement in duplicate of the amount owing to the appellant under its contract.

On the agreed statement of facts the court concluded the law to be with the appellee, and pursuant thereto entered judgment against the appellant. Exceptions were properly taken to each conclusion of law by the appellant. The errors properly assigned for reversal, requiring our consideration, are that the court erred in its first and second conclusions of law. Hawks v. The Mayor (1895), 144 Ind. 343, 43 N.E. 304.

On appeal from a judgment rendered on a trial by agreed case, no presumptions are indulged in favor of the judgment of the trial court, because this court has the same means as the trial court of reaching a correct conclusion of law upon the agreed facts of the case, and they will be considered as if this court were trying the case originally. Jennings v. Hembree (1919), 71 Ind.App. 370, 124 N.E. 876, and authorities there cited.

The facts presented by the record, and the argument of counsel in their respective briefs, require an examination and application of secs. 53-201 to 53-203, inclusive, Burns 1933, secs. 14084 to 14086, inclusive, Baldwin's Ind. St. 1934, as heretofore interpreted and construed by our courts, to the contract and bond in question, in order to determine the respective rights of the parties thereunder, for they agree that the contract and bond are within the class required and controlled by the above sections of the statute.

The appellant contends that under those sections of the statute as heretofore construed and applied by our courts, it was not necessary for it to file a verified claim in duplicate of the amount owing to it from the general contractor with the school city, in order to assert successfully a claim against appellee on the bond, that those sections of the statute are not exclusive but cumulative, that whether it should file its verified claim was optional with appellant, and it is only when the sub-contractor, materialman, or laborer seeks to "impound" the funds of the contractor in the possession of the owner, in this case the school city, that it is necessary to file such verified claims. This contention is supported by the following cases, Illinois Surety Co. v. State ex rel. (1919), 69 Ind.App. 450, 122 N.E. 30; Equitable Surety Co. v. Indiana, etc., Co. (1919), 70 Ind.App. 75, 123 N.E. 22; United States Fidelity, etc., Co. v. State ex rel. (1919), 71 Ind.App. 648, 125 N.E. 420; Million v. Metropolitan, etc., Co. (1930), 95 Ind.App. 628, 172 N.E. 569 (Transfer denied by Supreme Court February 2, 1933); Concrete Steel Co. v. Metropolitan, etc., Co. (1930), 95 Ind.App. 649, 173 N.E. 651 (Transfer denied by Supreme Court February 2, 1933); Natural, etc., Corp. v. Highways, etc., Corp. (1930), 96 Ind.App. 120, 173 N.E. 330; Eagle, etc., Co. v. McGee (1931), 92 Ind.App. 537, 175 N.E. 663,...