Hardware Dealers Mut. Ins. Co. v. R.H. Hidey, Inc.
| Decision Date | 04 September 1957 |
| Docket Number | No. 7,7 |
| Citation | 349 Mich. 490,84 N.W.2d 795 |
| Parties | HARDWARE DEALERS MUTUAL INSURANCE COMPANY, subrogee of Elizabeth Verkeyn, et al., Plaintiffs and Appellants, v. The R. H. HIDEY, Inc., a Michigan Corporation, and United States Fidelity & Guaranty Company, a Maryland Corporation, Defendants and Appellees. |
| Court | Michigan Supreme Court |
Ward, Plunkett & Cooney, Detroit, for plaintiffs and appellants.
Walter A. Mansfield, David S. De Witt, Detroit, for appellant, United States Fidelity & Guaranty Company.
Before the Entire Bench, Except BOYLES, J.
The declaration filed by plaintiffs in this case averred that in June, 1947, the City of Detroit entered into a contract with defendant R. H. Hidey, Inc., a Michigan corporation, for the construction of a pumping station at Mack and Bluehill Avenues in said city. The work was required to be done in a proper manner and subject to certain general conditions incorporated by reference. Among such conditions were the following:
'The contractor shall continuously maintain adequate protection of all his work from damage and shall protect all city property and private abutting property from injury or loss arising in connection with this contract. He shall without delay make good any such damage, injury or loss, and shall defend and save the city harmless from all such damages or injuries occurring because of his work. He shall furnish and maintain all passageways, barricades, guard fences, lights and danger signals, provide watchmen and other facilities for protection required by public authority, by local conditions, or by order of the engineer, all at no additional cost to the city.
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'The contractor shall take out and maintain during the life of this contract such public liability and property damage insurance as shall protect him from claims for damages for personal injury, including wrongful death, as well as from claims for property damages, which may arise from operations under this contract.'
The contractor was also required to furnish surety company bonds to insure the construction and completion of the work in accordance with the contract documents, and for the protection of subcontractors, labor and material men, pursuant to the statute of the State. In accordance with the requirement a performance bond was executed by defendant R. H. Hidey, Inc., as principal, and the United States Fidelity and Guaranty Company as surety, on July 8, 1947, requiring said principal to comply in all respects with the terms and conditions of its contract with the city.
The declaration further alleged that during the period from September 1, 1948, to and including the month of December of the same year the defendant contractor in the course of its operations under the contract caused damage to private property. With the exception of the individual plaintiff Edward Michael, the owners of the property were protected from such damage by insurance policies severally issued by the plaintiffs herein. Plaintiff insurance companies further claimed that under the terms of their respective policies they expended a total of $5,970 for repairs, that each thereby became subrogated under its policy to the rights of the property owner insured thereby, and that plaintiff Michael was further damaged in the sum of $610 for repairs to his home. Plaintiffs asked in their pleading for a collective judgment in the sum of $6,580.
The defendant United States Fidelity and Guaranty Company entered a special appearance and moved to dismiss the declaration. In said motion it was asserted that plaintiffs' pleading failed to allege a cause of action against said defendant, and that the plaintiffs were not entitled to join their several causes, as alleged, in one action. The trial court granted the motion, and plaintiffs have appealed, contending that the entry of the order of dismissal was erroneous.
It is the position of the appellants that they were entitled to rely on the so-called third-party beneficiary act 1 on the ground that the performance bond executed by the defendants covered all the obligations assumed by the contractor in its agreement with the City of Detroit, and that the provision of said contract with reference to property damage claims, above quoted, was for the benefit of abutting property owners. In view of the specific obligations of the contract and the language of the bond with reference to the observance of the contractor's obligation we think it must be said that the situation presented here is fairly within the terms of the statute as construed in Guardian Depositors Corp. v. Brown, 290 Mich. 433, 287 N.W. 798, and Greenlees v. Owen Ames Kimball Company, 340 Mich. 670, 66 N.W.2d 227, 46 A.L.R.2d 1205.
It will be noted that the performance bond, in terms, is not restricted to cover possible failure on the part of the contractor to construct the pumping station in accordance with the plans and specifications, but extends to and includes all obligations assumed by said contractor under its agreement. The language used is sufficiently broad to cover the undertaking with reference to the assumption of liability resulting from property damage to certain third parties. The extent of the coverage into which appellee entered as surety does not affect the matter of enforceability. Lawrence v. American Surety Co. of New York, 263 Mich. 586, 249 N.W. 3, 88 A.L.R. 535. The bond must be construed in accordance with its provisions. Appellee's claim that plaintiffs could not rely on the third-party beneficiary act is not well-founded.
This brings us to the question whether plaintiffs were entitled to join in one action for the recovery of the aggregate damages sustained by the individual plaintiff and by the subrogors of the plaintiff insurance companies. Necessarily involved is the interpretation of the provisions pertinent to joinder of causes of action found in C.L.1948, § 608.1 (Stat.Ann. § 27.591). Said section reads as follows:
In view of the fact that the declaration was dismissed on motion we must accept as correct well-pleaded averments of fact therein. It does not appear, however, that the causes of action that plaintiffs have sought to join are actually joint within the meaning of the statute above quoted. Insofar as appellee is concerned the right to sue rests on the provisions of the performance bond. That undertaking, read in conjunction with the conditions of the contract, may not be regarded as the assumption of liability to respond, in a single action, for the aggregate of the damages claimed to have been suffered by abutting property owners. Assuming that each such property owner was entitled to bring action for damages the conclusion does not follow that all might join. In other words, the rights of action of said property holders were not joint. None was interested in the rights of the others, nor in possible recoveries thereby. Each had a single cause of action that, assuming his property to have been wrongfully damaged by the acts of the contractor, he was entitled to maintain.
The plaintiff insurance companies are in no better position than their subrogors. Each policyholder, under the terms of his insurance contract, was in the position of merely assigning the cause of action that he had. Certainly be could not assign the rights of other property owners, nor was there any attempt to do so. Had separate suits been started by plaintiffs or by their subrogors, it is conceivable that they might by agreement of the parties approved by the court, or by court order if the facts so justified, have been tried together, thus expediting the work of the court. However, the fact taht such procedure might have been observed does not affect the question as to the right to join such causes of action in one case.
In the final analysis each plaintiff is seeking merely to recover his own damages. Whether other plaintiffs recover is not its or his conern. We are not dealing with a situation in which a number of individuals are seeking precisely the same relief, as in a suit to enjoin the continuance of a nuisance or other like instances. In Latimer v. Piper, 261 Mich. 123, 246 N.W. 65, plaintiffs joined in a suit in equity for rescission of an agreement by parties found to have engaged in a joint venture. In Gardella v. Babigian, 263 Mich. 514, 248 N.W. 885, a joint venture was also involved. These and other decisions of like nature fairly suggest the situation obtaining where joinder has been permitted. The facts in the instant proceeding, as pleaded in the declaration, are not within the purview of such holdings.
Whether a particular situation involving the right of joinder of parties plaintiff arises in contract or in tort may not properly be regarded as of controlling importance. Each such case must be determined with reference to its own facts and...
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