J. Jacob Shannon & Company v. Continental Casualty Company

• Decision Date: 03 February 1930
• Docket Number: Nos. 124, 126.,s. 124, 126.
• Citation: 148 A. 738,106 N.J.L. 200
• Court: New Jersey Supreme Court
• Parties: J. JACOB SHANNON & COMPANY, PLAINTIFF, v. CONTINENTAL CASUALTY COMPANY, A CORPORATION, DEFENDANT

148 A. 738

J. JACOB SHANNON & CO.

v. CONTINENTAL CASUALTY CO.

Nos. 124, 126.

Court of Errors and Appeals of New Jersey.

Feb. 3, 1930.

(Syllabus by the Court.)

Appeal from Supreme Court.

Action by J.Jacob Shannon & Co. against the Continental Casualty Company.From the judgment, both parties appeal.Affirmed on defendant's appeal, and reversed on plaintiff's appeal, and venire de novo awarded.

Andrew J. Whinery, of Newark, for plaintiff.

McCarter & English, of Newark, for defendant.

CASE, J.These are cross-appeals.Plaintiff furnished materials on a public work to a contractor who was bonded by the defendant under, and in substantially the language of, the statute.Chapter 75, P. L. 1918, § 4: 1 Cum. Supp. 1924, p. 1760, § 107—149 C(4).Plaintiff sued on the bond for $5,039.83, with interest.Verdict was directed for the plaintiff in the amount of $2,039.83, with interest Plaintiff appeals from the reduction in the amount claimed.Defendant appeals from the allowance of interest.

Plaintiff's contract figure was $5,600.It furnished extras in the amount of $39.83, making the total bill $5,639.83.Before rendition to the defendant of the statement of the amount claimed to be due, plaintiff had received from the contractor $600 in cash, for which full credit was given, reducing the claim to $5,039.83; and, in addition, plaintiff had received a trade acceptance and a promissory note aggregating $3,000, of which, however, no cognizance was taken either in the said statement or in the complaint instituting suit.The instruments matured subsequent to the furnishing of the statement, but before suit was brought, and, indeed, before the statutory 60-day waiting period (section 3) had elapsed.There was no proof that plaintiff had accepted these instruments, or either of them, in part payment of the debt.The trial judge, feeling constrained by the decision of the Supreme Court in the case of Taylor v. Wahl, 72 N. J. Law 10, 60 A. 63, determined that, inasmuch as the negotiable instruments had not matured when the statement was rendered, the portion of the claim represented by them was not due, and that therefore there must be a reduction from the claim of an amount equal to their aggregate sum, and consequently, in directing a verdict, struck off the sum of $3,000.

The statute(citedsupra) about which the litigation revolves, is entitled "An act to protect persons performing labor or furnishing materials for the construction, alteration or repair of public works."

Section 1 requires that, "when public buildings * * * are about to be constructed * * * it shall be the duty of the board * * * to require the usual bond * * * with an additional obligation for the payment by the contractor, and by all subcontractors, for all labor performed or materials furnished. * * *"

Section 2 provides that "such bond shall be * * * conditioned for the payment by the contractor, and by all subcontractors, of all indebtedness which may accrue to any person, firm or corporation, on account of any labor performed or materials furnished * * *" and "shall be * * * held * * * for the use of any party interested therein."

Section 3 provides that "any person, firm or corporation to whom any money shall be due on account of having performed any labor, or furnished any material in the construction * * * within eighty (80) days after the acceptance thereof by the duly authorized board or officer, shall furnish the sureties on said bond a statement of the amount due to any such person, firm, or corporation.No suit shall be brought against said sureties on said bond until the expiration of sixty (60) days after the furnishing of said statement. * * *"

Section 4 directs that the bond shall be of substantially the form therein set forth; a pertinent portion of the condition being as follows: "Now, if the said * * * shall pay all lawful claims * * * for labor performed and materials furnished * * * we agreeing and assenting that this undertaking shall be for the benefit of any materialman or laborer having a just claim, as well as for the obligee herein; then this obligation shall be void. * * *" The bond actually given was in substantial compliance with the statutory form and contained the language of the above excerpts from section 4.The bondsman thereon, the defendant in the suit, is a corporation engaged in the business of furnishing bonds.

Acceptance of promissory notes or their equivalent does not, in the absence of any agreement that it should have that effect— and there was no such agreement in this case —operate to discharge an antecedent debt.Joslin v. Giese, 59 N. J. Law, 130, 36 A. 680;Taylor v. Wahl, supra;Pry v. Patterson, 49 N. J. Law, 612, 10 A. 390.Indeed, defendant acknowledges that to be so, but, relying inter alia, upon the cases last cited, contends that such acceptance by the plaintiff extended the credit until the date of maturity, and that at the time the statement of indebtedness was furnished the amount in dispute was not "due," and consequently, under the statutes and the decisions, could neither be lawfully included in the statement nor successfully made the subject of the ensuing suit.This argument is predicated upon the applicability of Taylor v. Wahl, supra, a decision having to do with the' Mechanics' Lien Act(P. L.1898, p. 538 [3 Comp. St. 1910, p. 3290]), and particularly section 3(3 Comp. St. 1910, p. 3294, § 3), thereof, relating to stop notices and their effect.Two important points of distinction will serve to indicate why that case is not germane.In it the liability was purely statutory; the owner had assumed no obligation to the plaintiff other than was enjoined by the letter of the written law, whereas the present suit is on the defendant's own undertaking.The language of the Mechanics' Lien Act, and the procedure therein contained, are quite different from the statute involved with the instant case.The two statutes, in many ways, are not to be compared.Consequently it is not important, in the present case, that the word "due," as used in the stop notice provision of the Mechanics' Lien Act, has been given the import of "payable."

The word "due" does not always have that significance.The primary definition given by Webster's New International Dictionary is: "Owed or owing as a debt; of the nature of a financial obligation."Like interpretation has been given by this court in Smith v. Weaver, 76 N. J. Law, 584, 70 A. 1101, affirming75 N. J. Law, 31, 66 A. 941, and in Strong v. Gaskill, 53 N. J. Law, 665, 25 A. 19, affirming Supreme Court opinion in 59 A. 339; and by the Supreme Court in Metropolitan, etc., Fixture Co. v. Albrecht, 70 N. J. Law, 149, 56 A. 237.In construing the act of February 24, 1820(Rev. Laws 1821, p. 685), relating to the entry of judgment upon'a bond with warrant of attorney, it was said by Chief Justice Ewing in Scudder v. Scudder, 10 N. J. Law, 340: "The word 'due' has more than one signification or is used on different occasions to express distinct ideas.At times it signifies a simple indebtedness without reference to the time of payment.Debitum in present, solvendum in futuro.At other times it shows that the day of payment or render has passed.In the former sense it appears to have been used in the statute; as it is connected with a word of the like signification 'due and owing.'"To the same effect are Hoyt v. Hoyt, 16 N. J. Law, 138;Green v. McCrane, 55 N. J. Eq. 436, 37 A. 318;Lessler v. Paterson National Bank, 97 N. J. Eq. 396, 128 A. 800;Reading v. Reading, 24 N. J. Law, 358.Therefore, within the...