Million v. Metro. Cas. Ins. Co. , 13886.

• Decision Date: 08 September 1930
• Docket Number: No. 13886.,13886.
• Parties: MILLION et al. v. METROPOLITAN CASUALTY INS. CO. et al.
• Court: Indiana Appellate Court

95 Ind.App. 628

172 N.E. 569

MILLION et al.

v.METROPOLITAN CASUALTY INS. CO. et al.

No. 13886.

Appellate Court of Indiana, in Banc.

July 3, 1930.

Dissenting Opinion Sept. 8, 1930.

Appeal from St. Joseph Circuit Court; Andrew N. Hildebrand, Judge pro tem.

Action by Floyd Million and others against the Metropolitan Casualty Insurance Company and others. Judgment sustaining a demurrer to the complaint, and plaintiffs appeal.

Reversed with directions.

Hillis & Hillis, of Logansport, and McInerny & McInerny, of South Bend, for appellants.

Seebirt, Oare & Omacht, of South Bend, for appellees.

ENLOE, J.

The appellants furnished sand and gravel to the Highways Improvements Company, contractors, for the construction of a portion of State Road 30 (Valparaiso-Plymouth Road), in Starke county, Ind. The contract for the building of said road was made by the Highways Improvement Company with the state of Indiana, acting by and through the state highway commission, by John D. Williams, director. To secure the performance of its said contract, said contractor, agreeable to section 8285, Burns' Ann. St. 1926, executed its bond with the appellee the Metropolitan Casualty Insurance Company of New York, as surety thereon, conditioned, inter alia, that the said contractor would pay all lawful claims of materialmen, for materials furnished in the carrying forward and completing said contract, and expressly agreeing that said bond should be for the benefit of any materialman having a just claim against said contractor. This bond was duly approved and accepted by John D. Williams as director of said commission.

This contract was let and said bond given under and in accordance with the provisions of section 8285, Burns' Ann. St. 1926 (section 18 of the Highway Commission Act), in which section it is, among other things, provided: “*** 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 of such highway, within one year after the acceptance thereof by the duly authorized board of officers 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 the sureties on said bond until the expiration of sixty days after the furnishing of said statement. If said indebtedness shall not be paid in full at the expiration of said sixty days, said person, firm or corporation may bring an action in his own name upon such bond, said action to be commenced within one year from the date of acceptance of said highway.” (Our italics.)

It appears from the averments of the complaint that the said construction contract was entered into in March, 1927, and the bond given as before noted; that the appellantsfurnished materials, sand and gravel, used in the construction of said road; that said road had been fully completed and had been accepted by the state on December 15, 1928, and the final estimate thereon paid on that date. It also appears from said averments that the materials for which this suit was brought were furnished in July and August of 1927, and that in February, 1928, the appellants filed with the state highway commission, in duplicate, a verified statement of their account, and that on March 20, 1928, a copy of the claim so filed was given to the said surety. The complaint, the basis of this suit, was filed February 11, 1929. A demurrer thereto for want of facts was sustained, hence this appeal. The only question to be considered is the sufficiency of the complaint.

The contention of the appellees is embodied in their memorandum filed with their said demurrer, one of the specifications of which is as follows: “Each paragraph of said complaint shows on its face that the plaintiffs herein were subcontractors who furnished materials entering into the construction of said highway, but that the plaintiffs failed to comply with the terms of the statutes in said cases made and provided, in that the plaintiffs failed, within sixty days after the last item of material had been furnished by them, to file with the State Highway Commission duplicate verified statements of the amount due and owing by the contractor to them; the said plaintiffs, in failing to file such duplicate verified statements of the amount owing them, within the time required by statute, lost the right to proceed against the surety upon said contractor's bond.”

In short, it is the contention of the appellees that the remedy given by section 2 of the act of 1911 (Acts 1911, c. 173, p. 437), as amended by the act of 1925 (Acts 1925, c. 44, p. 130), the same being section 6122. Burns' Ann. St. 1926, is the sole and only remedy of which a subcontractor, laborer, or materialman may avail himself, as against the surety on such bond. On the other hand, it is the contention of the appellants that the remedy given by said act is optional, and that the remedy as the same existed prior to said amendment of 1925, for a breach of such bond, still remains to such creditor, upon his compliance with section 8285, supra.

Before the amendment of said act of 1911 by the act of 1925, this court had held in the cases of Equitable Surety Co. v. Indiana Fuel Supply Co. (1919) 70 Ind. App. 75, 123 N. E. 22, and Illinois Surety Co. v. State ex rel. (1919) 69 Ind. App. 450, 122 N. E. 30, that the remedy given by said act was cumulative; that the right of action on the bond, as at common law, still remained. The question therefore, which we are now called upon to answer, is: Did the amendment of 1925 take from the subcontractors, materialmen, and those performing any service in relation to or in connection with such construction, alteration, etc., as mentioned in said section as amended (section 6122, Burns' Ann. St. 1926), their right to bring suit upon a contractor's bond, as such right then existed, for a breach thereof by failing to pay their just claim for labor performed or materials furnished?

It will be noted that by said act of 1911, it was provided in section 1 (Burns' Ann. St. 1926, § 6121) that the disbursing officer or officers should withhold full payment to the contractor, until such contractor had “paid to the sub-contractor or sub-contractors or laborers employed in such construction, all bills due and owing the same,” and providing that if the money so retained should not be sufficient to pay claims in full, they should be prorated, and also providing that in cases where there was no dispute as to the amount of such claim the disbursing officer or officers should pay such claim, taking a receipt therefor, and that the amount so paid should be deducted from funds due the contractor. Said section also provided that said funds so held should be retained until such disputes as might arise as to amounts due were settled, when payment should be made.

By section 2 of said act it was provided that provision should be made in the construction contract for the withholding of funds to pay for labor, materials, and to subcontractors, and that the bond should be so conditioned as to render the sureties thereon liable for labor, materials, and to subcontractors, and said section then closed with a proviso that laborers, materialmen, and subcontractors should file their claims with the proper office within 30 days after the labor was performed or materials furnished.

By section 3 of said act (Acts 1911, c. 173) it was declared that said act should not be construed as repealing any other laws for the protection of laborers, subcontractor, or materialmen, but as being supplemental thereto. Said sections 1 and 2 were amended in 1925 (Acts 1925, c. 44, p. 129, sections 6121, 6122, Burns' Ann. St. 1926), but section 3 of said act of 1911 remained as at the time of its passage in 1911.

In Atz v. City of Indianapolis (1928) 87 App. 580, 158 N. E. 523, 524, this court said: “The general rule is that the court in arriving at the effect of an amendment to a statute must consider the amendment as a part of the original act, and the entire act as amended must be given the same construction as if the amendment had been a part of the original act.” So that we have said section 3 of said original act remaining unimpaired by the act of 1925. Blair v. Chicago (1906) 201 U. S. 400, 26 S. Ct. 427, 50 L. Ed. 801;Walsh et al. v. State (1895) 142 Ind. 357, 41 N. E. 65, 33 L. R. A. 392.

The amendment of 1925 broadened said act as to the persons who might claim the benefits thereof by providing, inter alia (section 2), that the bond given should be conditioned “for the payment by the contractor, his successors and assigns, whether by operation of law or otherwise, and by the sub-contractors, their successors and assigns, whether by operation of law or otherwise, of all indebtedness, which may accrue to any person, firm or corporation on account of any labor or service performed or materials furnished or service rendered as herein provided in the construction, erection, alteration or repair of any such building, work or improvement, which shall include all road, highway, street, alley, bridge, sewer, drain or any other public improvement of any nature or character whatsoever.” Said section as amended then further provided that persons within said act, who had any claim against any contractor or subcontractor, should within sixty days after the completion of said work, or within sixty days after the last item of material was furnished, file with the proper officer or board, duplicate verified statements of their account, and that a copy of such statement so filed, should be, at once, delivered to the surety on such contractor's bond. It then provided that no suit should be brought on said bond within the thirty days following the filing of said account, and that no suit should be brought after the expiration of one year.

It is the contention of the appellees, as before stated, that the remedy given by this statute, to the persons named...