Goodspeed v. Duby

• Decision Date: 10 December 1929
• Citation: 283 P. 6,131 Or. 275
• Parties: GOODSPEED v. DUBY ET AL.
• Court: Oregon Supreme Court

283 P. 6

131 Or. 275

GOODSPEED v. DUBY ET AL.

Supreme Court of Oregon

December 10, 1929

In Bank.

Appeal from Circuit Court, Multnomah County; Walter H. Evans, Judge.

Suit by Frank Goodspeed against William Duby and others. From the decree, defendant Independence Indemnity Company appeals and, from that part of the decree denying his attorney's fees, plaintiff appeals. Affirmed.

Plaintiff instituted a suit against defendants to recover from J. R Stephens & Bolderson and Independence Indemnity Company, a corporation, the sum of $2,150.67. Defendants Stephens and Bolderson were partners who entered into a contract to construct a bridge for the defendants constituting the state highway commission of the state of Oregon. Defendant Independence Indemnity Company was surety on the bond exacted from said partnership by state highway commission. After said suit was instituted, the state highway commission was made party for the purpose of requiring it to pay the claim of plaintiff, because plaintiff's claim represented the amount owing by said partnership for the wages of himself and assignors. Said partners failed, were unable to complete their contract with said highway commission, and the latter completed the undertaking of said partnership. The highway commission had in its possession the sum of $3,000, which had been retained under the terms of the contract between it and the said partnership. The other defendants also held claims against the said partnership and said Independence Indemnity Company for material supplied to either said partnership or the highway commission for the construction of said bridge. Said highway commission deposited the $3,000 for the benefit of plaintiff and his assignors upon said labor claims, which paid said claims in full. In adjusting the contention of the several parties, the learned circuit court allowed the plaintiff's claim to the sum in the hands of the commission. At that time the learned circuit court denied plaintiff's demand for attorney's fee temporarily with permission to plaintiff to present the claim again upon the conclusion of the suit. The other defendants who were claimants pressed their claims to conclusion and recovered judgment against said partnership and said indemnity company for the full amount of their claims, were allowed attorney's fee as well as costs and disbursements, and the court again denied the claim of plaintiff for attorney's fee. The penalty of the bond was not sufficient to pay the labor and material claims in full. Defendant indemnity company appealed from the judgment against it for attorney's fee. Plaintiff appeals from that part of the decree denying him attorney's fee. No other questions are involved in the two appeals.

P. J Gallagher, of Portland (John F. Conway, of Portland, on the brief), for plaintiff cross-appellant.

P. J. Gallagher, of Portland, for respondents Hunter, Linton, Baker, and Spencer.

A. G. Barry, of Portland (Barry & Morrison, and Wilbur, Beckett, Howell & Oppenheimer, all of Portland, on the brief), for appellant Independence Indemnity Co.

J. M. Devers, of Salem, for respondents Duby, Gates and Van Duzer.

A. L. Veazie, of Portland (Veazie & Veazie, of Portland, on the brief), for respondent Heintz.

M. D. White, for respondent Cathcart.

Dey, Hampson & Nelson and Andrew Koerner, all of Portland, for respondent Standard Oil Company.

James G. Wilson, of Portland (Arthur Clarke and Allan G. Carson, both of Corvallis, and Wilson, Reilly & Isaacs, of Portland, on the brief), for respondents Cathcart, Ash, Philomath State Bank, Berreman, Green, Whiteside & Locke, Hathaway, Farmers' & Merchants' Transport Co., and Willamette Grocery Co.

Raffety & Pickett, of Portland, for respondent McCracken-Ripley Co.

Robin D. Day, of Salem, for respondent Tweedie.

Winter & Maguire, of Portland, for respondent Independence Sand & Gravel Co.

James W. Crawford, of Portland, for respondent Evergreen Lumber Co.

Herbring & Smith, of Portland, for respondents Bishop and Thomas.

William C. Palmer, Chester Dolph, and Lester Humphreys, all of Portland, for respondent Oregon Portland Cement Co.

COSHOW C.J. (after stating the facts as above).

The contention of appellant Independence Indemnity Company is that it cannot be compelled to pay more than the penalty of its bond. The amount of costs and attorney's fee taxed against it is in excess of the penalty of its bond. The defendant claimants did not receive the full amount due them, but were compelled to prorate because the amount of the funds in the hands of defendant highway commission and the penalty of the bond were not sufficient to pay plaintiff and said claims for material in full. Defendant Independence Indemnity Company deposited in court with its answer the amount of the penalty of its bond, but continued to participate in the suit, contested the different claims under consideration, and prayed for a return to it of any balance that might remain of the fund it paid into court as aforesaid. It also asked for attorney's fee. The question to be determined is, Is a surety company liable for the costs of an action or suit and for attorney's fee beyond the penalty fixed in its bond of indemnity?

It is a general rule of law that a surety is not liable beyond the penalty fixed in its undertaking. 9 C.J. 131, § 243; 1 Brandt Suretyship Guaranty (3d Ed.) 270, § 126.

"But when the time has come for him to discharge that liability and he neglects or refuses to do so, it is equally reasonable, and altogether just, that he should compensate the creditor for the delay which he has interposed. * * * The question, in short, is, not what is the measure of a surety's liability under a penal bond, but what does the law exact of him for an unjust delay in payment after his liability is ascertained and the debt is actually due from him." Brainard v. Jones, 18 N.Y. 35, as quoted in 1 Brandt Suretyship Guaranty, above; Illinois Surety Co. v. John Davis Co., 244 U.S. 376, 37 S.Ct. 614, 61 L.Ed. 1206; Dwyer v. U.S. (C. C. A.) 93 F. 616; Getchell & Martin Lumber Co. v. Peterson, 124 Iowa, 599, 100...