Hartford Accident & Indem. Co. v. Casassa
| Decision Date | 06 October 1938 |
| Citation | 16 N.E.2d 860,301 Mass. 246 |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
| Parties | HARTFORD ACCIDENT & INDEMNITY CO. v. CASASSA et al. |
OPINION TEXT STARTS HERE
Bill in equity by the Hartford Accident & Indemnity Company against Andrew A. Casassa and others to reach and apply certain shares of stock, alleged to belong to one of the defendants, who, with the other defendants originally named in the bill, is alleged to have violated an agreement, made with the plaintiff, to indemnify it on a bond which these defendants, as principals, and the plaintiff, as surety, gave to the commonwealth. The defendants who answered and one Cohen, who was later joined as a defendant, set up counterclaims in their answers. All parties, except Cohen, appeal from the final decree.
Partly reversed, and partly affirmed as modified.Appeal from Superior Court, Suffolk County; Walsh, Judge.
A. E. Whittemore and L. Kaplan, both of Boston, for plaintiff.
J. M. Graham and John T. Coan, both of Boston, for defendant Chisholm and others.
W. P. Murray, of Boston, for defendant Casassa.
This is a bill in equity, inserted in a trustee writ, to reach and apply certain shares of stock, alleged to belong to one of the defendants, who, with the other defendants originally named in the bill, is alleged to have violated an agreement, made with the plaintiff, to indemnify it on a bond which these defendants, as principals, and the plaintiff, as surety, gave to the Commonwealth. Then defendants who answered, and one Cohen, who was later joined as a defendant, set up counterclaims in their answers. The case was referred to a master whose report was confirmed by interlocutory decree. A final decree was entered, giving money damages to the plaintiff and dismissing the bill as against Cohen. All parties, except Cohen, appeled from the final decree. Several of the defendants named in the writ filed no answers and there is no reference to them in any decree. The master reports that ‘The hearing proceeded upon the assumption that the persons who filed answers were the only respondents.’ The final decree seems to proceed upon the same assumption.
From the admission of the parties, and the master's report, it appears that the defendants, except Cohen, who were members of a voluntary association, the Amusement Division of the Revere Chamber of Commerce (hereinafter referred to as the division), planned to burn a vessel in the waters off Revere Beach, as a part of the ‘Night before the Fourth’ celebration of 1929. On June 26, 1929, the following steps were taken to carry out the plan. To secure the license which is required by G.L.(Ter.Ed.) c. 91, §§ 46, 47, the division agreed in writing with the Commonwealth's department of public works to complete the burning of the hulk of the vessel by one o'clock in the morning of July fourth, and to complete the removal of the hulk from tidewater, to the satisfaction of the department and without expense to the Commonwealth, on or before September 1, 1929. The division also filed, as required by the statute (section 47), a bond in the sum of $10,000, hereinafter referred to as the first bond, wherein the Commonwealth and the plaintiff are obligee and surety respectively, and which is conditioned upon the carrying out of all the provisions of the agreement ‘to remove the remains of this hulk from tide water.’ As a part of the transaction, the division gave the plaintiff a written agreement, indemnifying it against loss as surety on this bond. The division also entered into a written contract, hereinafter referred to as the main contract, with the defendant Cohen, whereby he was to sell and deliver to the division, at six o'clock in the afternoon of July 3, a vessel which they were to burn to the ‘floor of the first deck.’ Thereupon Cohen was to extinguish the fire and remove the hulk in conformity with State and government regulations. As a part of Cohen's contract, he gave a bond in the sum of $10,000, hereinafter referred to as the second bond, wherein the division and the plaintiff were obligees and surety respectively. This second bond was to indemnify the division against loss by reason of the first bond having been executed.
The burning of the vessel was not completed at one o'clock in the morning but it burned to the water's edge and sank. The facilities for extinguishing the fire which Cohen provided were inadequate, and the hulk was not removed on or before September 1, 1929. Thereafter the Commonwealth removed it and brought an action against the plaintiff to recover the reasonable and proper cost of removal, which was $9,500. The division were notified and asked to defend the action, but refused to do so. The action was settled by the plaintiff by the payment of $9,000, and the Commonwealth assigned to the plaintiff all rights against the division.
The division's counterclaim is that there was a breach of the second bond given by Cohen so that if they are liable on the first bond, then the plaintiff, as surety on the second bond, is liable to them, and they ask that the plaintiff be enjoined from prosecuting any suit or action against them on account of the indemnity agreements. The plaintiff, in answer to this, alleges that the division unwarrantably paid Cohen certain sums on account of the stipulated sum of $3,000, if he fully performed his contract, and also that Cohen's failure to perform was due to the conduct of the division in interfering with and obstructing his performance, so that the plaintiff is discharged from any liability to the division on the second bond. Cohen's counterclaim is that the division prevented performance by him of his contract and that the entire amount of payment rpovided therein is due. The plaintiff's position against Cohen is that, if it is enjoined from prosecuting any proceeding against the division, Cohen's liability to it should be determined.
No question is raised as to the breach of condition of the first bond or as to the discharge of the plaintiff's liability thereon by payment to the Commonwealth of a part of the reasonable cost of removing the hulk. This bond recites, so far as material, that The second bond recites, so far as material, that whereas Cohen has agreed to have the vessel towed to a designated point and ‘to burn a portion of said boat for celebration purposes during the evening of July 3rd and to remove from tide water all that remains of the hulk’ and whereas the division have given the first bond ‘conditioned upon the removal of said hulk from tide water, a copy of which bond is or may be attached hereto, and the present obligation is desired by the * * * [division] as counter-indemnity,’ the condition is that if Cohen shall indemnify the division against loss which they may suffer ‘by reason of having executed * * * [the first bond] * * *, then this obligation shall be null and void * * *.'
The plaintiff contends that the interference of the division with Cohen's performance of his contract arose from two sources, (1) their use of cumbustibles and (2) their delay in starting the fire; that the use of combustibles was contrary to their contract with Cohen and that the delay in starting the fire was contrary to their contract with the department of public works. It also contends that, as a result, it was released from liability on the second bond.
It is to be observed that the second bond is not one which insures the performance of another contract as in the cases of Davis v. Wells, 254 Mass. 118, 149 N.E. 693;Manufacturers' Finance Co. v. Rockwell, 278 Mass. 502, 180 N.E. 224;Union Market National Bank of Watertown v. Nonantum Investment Co., 291 Mass. 439, 441, 197 N.E. 57; and Merchants National Bank v. Stone, Mass., 5 N.E.2d 430. It provides indemnity against loss resulting from execution of the first bond in language which is clear and unmistakable, and it is evident that its sole purpose was to shift the ultimate responsibility under the first bond from the division to Cohen and, consequently, to his surety. Curtis v. Banker, 136 Mass. 355, 356. If there is liability under the first bond on the part of the division, nothing more appearing, this is just what the plaintiff undertook to take care of under the second bond. The reference in the second bond to the main contract is brief and, in one instance, inaccurate. It recites Cohen's agreement to have the vessel towed to a point to be designated by the division, ‘to burn a portion of said boat for celebration purposes * * *’ and to remove from tidewater the remains of the hulk. Cohen had not agreed to burn the vessel. The bond then recites the giving of the first bond, ‘conditioned upon the removal of said hulk from tide water,’ ‘in order to secure a permit,’ and that ‘the present obligation is desired by the * * * [division] as counter-indemnity.’ Clearly the first bond must be read with the second bond, and Cohen's undertaking as principal in the second bond was to indemnify the division from loss under the first bond.
It is true that the several agreements and documents bear the same date and are parts of the same general plan. But if we revert to the first bond, we find that the obligation, upon which the liability of the plaintiff on the second bond depends, is that of the division to ‘carry out all the provisions * * * [of their agreement] * * * to remove the remains of this hulk from tide water.’ See Canton Institution for Savings v. Murphy, 156 Mass. 305, 31 N.E. 285;Cook v. Finger, 270 Mass. 102,...
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