Mills v. Indemnity Ins. Co. of North America

• Decision Date: 31 October 1933
• Docket Number: 7654.
• Parties: MILLS v. INDEMNITY INS. CO. OF NORTH AMERICA.
• Court: West Virginia Supreme Court

171 S.E. 532

114 W.Va. 263

MILLS v. INDEMNITY INS. CO. OF NORTH AMERICA.

No. 7654.

Supreme Court of Appeals of West Virginia.

October 31, 1933

Submitted October 18, 1933.

Syllabus by the Court.

Party committing breach of duty is liable for its natural and proximate effects, which may be immediate or through subsequent media of natural forces or other innocent causes.

Contract of paid surety should be construed most strongly in favor of obligee.

Defense of vis major may be successfully interposed only when party asserting it is not primarily at fault.

1. One who has committed a breach of duty is liable for its natural and proximate effects, which may be immediate or through the subsequent media of natural forces or other innocent causes.

2. The contract of a surety for a profit should be construed most strongly in favor of the obligee.

3. Vis major excuses the party asserting it only when he himself is not primarily at fault.

Error to Circuit Court, Kanawha County.

Action by E. R. Mills against the Indemnity Insurance Company of North America. To review a judgment in favor of the plaintiff, the defendant brings error.

Affirmed.

Henry S. Cato and Rummel, Blagg & Stone, all of Charleston, for defendant in error.

Robert H. C. Kay, Price, Smith & Spilman and J. M. Woods, all of Charleston, for plaintiff in error.

HATCHER Judge.

The litigation between these parties has been in this court twice before. The first case is reported in 108 W.Va. 317, 150 S.E 718, and the second in 166 S.E. 531. We take from the latter opinion a statement of the present case: "The plaintiff having contracted with the county court of Cabell County for the construction of a bridge in that county, sub-let a portion of the work to Metal Products Company, which furnished an indemnity bond to the plaintiff with the defendant as surety. By reason of failure of the sub-contractor, the plaintiff took over the work and completed it, with the assent of the subcontractor's surety, the defendant. Incurring large expense in completing the work, the plaintiff instituted this action of debt against the surety on the bond." The bond, dated April 27, 1926, was for $5,700 and was conditioned as follows "Now therefore, the condition of this obligation is such, that if the Principal shall indemnify the Obligee against loss or damage directly caused by the failure of the Principal to faithfully perform said contract, then this obligation shall be null and void; otherwise remain in full force and effect." The bond contained several sections limiting the liability of the surety, among which are section 5, exempting the surety in case of injury to the work by an "act of God"; and section 6, limiting the damages arising from delay in completion of the work to 10 per cent of the penalty of the bond.

The Metal Products Company never did any work on the bridge. It went into the hands of a receiver in June, 1926, and he notified plaintiff in July that he would not perform the work. Shortly afterwards, plaintiff commenced the construction.

The present appeal involves a directed verdict in favor of the plaintiff for $4,589.46. Of this amount the defendant complains of only $1,316.18. This item is for labor and material to replace certain temporary work in the river, necessary in erecting the span, which work was carried away on August 25, 1926, by a rise in the water (not exceptional) and through no negligence of the plaintiff.

Defendant takes the position (1) that damages should be assessed, if at all, as of the date of the default of the Metal Products Company; (2) that the high water was the proximate cause of the damage and not the failure of the Metal Products Company to perform; (3) that the damage was caused by an "act of God" and that defendant is not answerable therefor under the fifth section of the bond; and (4) that in any event, the sixth section would limit the amount recoverable to one-tenth of the penalty of the bond, or $570.

1. The plaintiff had suffered no damages prior to his substituted performance. He could not know at the inception of Metal Products Company's default, the amount of damages, if any, he would suffer in performing its contract. Therefore, defendant's first point is not well taken.

2. In constructing the bridge, the plaintiff was performing what the Metal Products Company had contracted to do for him. While the high water was the immediate cause of the loss, he would not have been placed in position to have incurred the loss had it not been for the wrongful act of the Metal Products Company. Had it been complying with its contract when the rise came, the loss would have fallen on it. The evidence shows that high water may occur in Cabell county at any time during the spring and summer months. The temporary bridge work in the river was inherently susceptible to damage from...