Metropolitan Casualty Ins. Co. v. Smith & Smith
| Decision Date | 06 June 1932 |
| Docket Number | No. 6649.,6649. |
| Citation | 58 F.2d 699 |
| Parties | METROPOLITAN CASUALTY INS. CO. v. SMITH & SMITH, Inc. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Post, Russell, Davis & Paine, of Spokane, Wash., and Senn & Recken, of Portland, Or., for appellant.
Williams & Cornelius, of Spokane, Wash., for appellee.
Before WILBUR and SAWTELLE, Circuit Judges, and ST. SURE, District Judge.
This action was brought to recover upon a bond given by the appellant Metropolitan Casualty Insurance Company in connection with the performance of certain road work for the Department of Agriculture. Plaintiff having recovered the full penalty of the bond, the surety company appeals from the decision.
It seems that Albert L. Smith had entered into a contract with the Bureau of Public Roads, Department of Agriculture of the United States, for the construction of a road. A portion of this work Smith sublet to Logan Bros., and another portion he sublet to Poe Bros. Smith gave a surety bond for the faithful performance of his contract with the Bureau of Public Roads wherein it was agreed that all claims for labor and material under said contract should be paid by the contractor, Albert L. Smith. He sublet a portion of this work to Logan Bros., who in turn gave him the bond upon which this action was brought to recover for the failure of Logan Bros., to complete the work they had agreed by their sub-contract to perform, for which the sum of $4,661.67 was claimed. In addition thereto, appellee claims that material and labor claims aggregating $9,748.82 incurred by Logan Bros. in performance of the contract remained unpaid. The total amount of these two claims ($14,410.49) exceeding the penalty of the bond ($10,000), judgment was rendered for the full amount of the penalty of the bond, with interest. The appellant concedes its liability to the extent of a part of the loss suffered by the contractor Albert L. Smith by reason of the failure to complete the work Logan Bros. have agreed to perform, namely, $4,661.67. With reference to the loss suffered by reason of the failure of Logan Bros. to complete their contract, it is contended that $3,646.30 of that amount has been discharged by Logan Bros. by reason of work done by Logan Bros. on account of other subcontractors, Poe Bros., who had defaulted in their work.
As to claims for unpaid labor and materials furnished Logan Bros., appellant makes two contentions: First, that the bond was one of indemnity and that therefore Smith, the obligee, could not recover until he had paid these outstanding claims for labor and material.
It is also claimed that the court erred in the reception of the books of account of Smith with respect to such claim for labor and material, and that there was failure of competent evidence to establish these claims.
The primary question with relation to the unpaid claims for material and labor furnished to Logan Bros. turns upon whether or not the condition of the bond with reference to such claims is one of indemnity or surety. That provision of the bond is as follows: "Now therefore, the condition of this obligation is such that if the principal shall faithfully perform the contract on his part, and satisfy all claims and demands, incurred for the same, and shall fully indemnify and save harmless the owner from all cost and damage which he may suffer by reason of failure so to do, and shall fully reimburse and repay the owner all outlay and expense which the owner may incur in making good any such default * * * and shall pay all persons who have contracts directly with the principal for labor or materials, then this obligation shall be null and void; otherwise it shall remain in full force and effect."
It is contended by the appellee that this provision makes the appellant a surety for payment of such claims and that the principal having defaulted thereon the obligee can enforce the bond without having first paid the claims.
It was decided in Trinity Parish v. Aetna Indemnity Co., 37 Wash. 515, 79 P. 1097, where a bond given on behalf of a building contractor, conditioned upon its faithful performance of all the obligations of the...
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Graves v. Garvin, 7973.
...in it, is a book of original entry and admissible in evidence as such." This principle is supported by Metropolitan Casualty Ins. Co. v. Smith, 9 Cir., 1932, 58 F.2d 699, 701, wherein it is stated that if the books are kept in the ordinary course of business, they are competent evidence. Th......
- Logan v. United States, 574.