Maine Bonding & Cas. Co. v. Foundation Constructors, Inc.

• Decision Date: 07 August 1964
• Parties: MAINE BONDING & CASUALTY COMPANY v. FOUNDATION CONSTRUCTORS, INC. et al.
• Court: New Hampshire Supreme Court

Page 481

202 A.2d 481

105 N.H. 470

MAINE BONDING & CASUALTY COMPANY v. FOUNDATION CONSTRUCTORS, INC. et al.

Supreme Court of New Hampshire.

Argued May 5, 1964.

Decided July 17, 1964.

Rehearing Denied Aug. 7, 1964.

Devine, Millimet, McDonough, Stahl & Branch and John S. Holland, Manchester, for plaintiff.

Francis G. Moulton, Littleton (by brief and orally), for Russell W. Wood and other third party claimants.

Wiggin, Nourie, Sundeen, Nassikas & Pingree and T. William Bigelow, Manchester, for United Glass and Aluminum Co., Inc., a third party claimant.

WHEELER, Justice.

Petition for declaratory judgment to interpret a bond. The issues presently before us are stated in the reserved case as follows:

'This matter was originally transferred without ruling as to the obligation of Maine Bonding & Casualty Company to satisfy the claims of subcontractors who have no lien on the property and to whom Eastern Development Corp. is not obligated. This question involved a determination whether the bond in question was an indemnity or a performance (payment) bond. At the hearing before the prior transfer, the Court, after admitting parol evidence as a procedural device to prevent a further hearing in the event its ruling was in error, excluded the evidence subject to exception. The questions of law raised by that and other exceptions were also transferred.

'After hearing in the Supreme Court, the specifications were offered in evidence there by the defendants but were objected to by the plaintiff, which, as an alternative to exclusion by that Court, moved that the matter be remanded to this Court for the taking of further evidence as to the intention of the further and for a determination of the admissibility of the specifications.

'On remand to this Court, the specifications were admitted. Parol evidence of the intention of the parties was offered by the Bonding Company in this instance, the positions of the parties now being reversed as to its admissibility.'

This case was originally argued here February 5, 1963. After hearing and before decision by this Court the defendants filed a motion that this Court receive and consider the specifications and general conditions of the contract which were not available at the time of the original transfer here, but have since been located.

In the alternative defendants moved that the case be remanded to the Superior Court prior to a decision here for reception of evidence of the specifications and general conditions.

On February 28, 1963 this Court made the following order: 'Remanded to the Superior Court for consideration of matters presented by motion of Russell W. Wood et al. and United Glass & Aluminum Co. Inc., and the objections by the Maine Bonding & Casualty Co.'

The Court below after hearing pursuant to this order admitted in evidence the specifications and general conditions subject to the plaintiff's exception which was later waived. The Court subject to the defendants' exceptions permitted the plaintiff to introduce certain oral testimony. The exceptions of both parties to certain evidentiary rulings and to the findings and rulings were reserved and transferred by Grimes, J.

The Court made the following findings and rulings: 'It is ruled that the language of the bond is not ambiguous and that the parol evidence offered at the hearing after remand is not admissible. Plaintiff excepts.

'Realizing that determination of the intention of the parties from such evidence, if admissible, is for this Court in the first instance, I have considered the evidence to avoid a further remand in the event it is held admissible.

'It is found that the parties intended and contemplated an indemnity bond and that if the language of the bond and such parts of the contract and specifications as may properly be considered does not create a performance (payment) bond, there is nothing in the oral evidence that convinces me that one was intended. The defendants except.'

The position of the parties here with respect to the admissibility of oral testimony relating to the intention of the parties is now reversed. The plaintiff now contends it was entitled to introduce further oral testimony to show the intent of the parties and the defendants now argue that the language of the bond is not ambiguous and the Court's ruling to that effect should be sustained.

On November 18, 1960 the Maine Bonding and Casualty Co. executed a bond in the penal sum of $165,000 to the Eastern Development Corporation of Woburn, Massachusetts, the material conditions of which provided: 'WHEREAS, the Principal has, by written Agreement, dated November 18, 1960 entered into a contract with the Obligee for construction of a First National Store and...