National Market Co. v. Maryland Cas. Co.
| Decision Date | 22 June 1918 |
| Docket Number | 14284. |
| Parties | NATIONAL MARKET CO. v. MARYLAND CASUALTY CO. |
| Court | Washington Supreme Court |
On rehearing. For former opinion, see 170 P. 1009. Affirmed.
This case was heretofore before this court, and a departmental decision was rendered which will be found in 170 P. 1009, to which reference is made for a fuller statement of the facts. After the filing of that opinion, a petition for rehearing en banc was filed, which was granted, and the case was reargued before the court en banc.
A sufficient statement of the facts for present purposes is That the appellant became the owner and holder of seven checks which it purchased from seven different payees. These checks were drawn by C. W. Coit & Co., and by them delivered to workmen employed upon a public contract which they were engaged in fulfilling. The Maryland Casualty Company, the respondent, furnished the surety bond upon such contract. The checks were the ordinary bank checks, drawn by the contractor in favor of the various laborers, on the Guardian Savings Bank of Seattle. There was nothing on the face of the checks to show what they were issued for, or differentiate them in any way from ordinary bank checks. These checks were indorsed by the various payees, and delivered to the appellant, who paid value therefor in cash or merchandise. Appellant alleges knowledge on its part, at the time of the purchasing of the checks that the same were issued to the various laborers for work done by them for Coit & Co. under their contract. It is stipulated, however, that no assignment has ever been made of the laborers' claims other than the ordinary indorsement and delivery of the checks.
The respondent, Maryland Casualty Company, demurred to appellant's complaint setting up these facts, upon the ground that the complaint did not state facts sufficient to constitute a cause of action. The trial court sustained the demurrer, appellant elected to stand upon its complaint, and judgment was entered, from which this appeal is taken.
We have repeatedly held that a labor claim assertable against the bond of the contractor engaged in a public work is assignable, and that the assignment of such a claim carries with it all of the laborer's right of action against the contractor, and operates as an equitable assignment of the laborer's right to assert his claim against the bond. Northwestern National Bank v. Guardian Casualty Co., 93 Wash. 635, 161 P. 473; Gilmore v. Westerman, 13 Wash. 390, 43 P. 345. Which leaves the only question to be decided here, the effect of the issuance of ordinary bank checks by a contractor to a laborer, and whether the indorsement of such checks carries with it an assignment of the laborer's claim against the contractor, and the right of lien, or to protection under the bond.
In Northwestern National Bank v. Guardian Casualty Co., supra it was held that the time checks there under consideration were certificates evidencing that each of the laborers had worked a certain time upon the public work at a certain rate and were entitled to a certain amount of money in payment from the contractor. And each time check bore the indorsement:
'For value received I hereby assign to the Northwestern National Bank all my right, title and interest to the within time check.'
The court, having these facts in mind, said:
-- a doctrine which we in no wise modify, but which is clearly distinguishable, we think, from the case under consideration.
In Small v. Smith, 120 Minn. 118, 139 N.W. 133, it is held that time checks are not negotiable under the law merchant, but are the 'evidence and symbol' of the claim for labor of the person therein named. It needs no argument to show that a time check, bearing on its face such facts as are referred to in the Northwestern National Bank Case, supra, is indeed the 'evidence and symbol' of the claim of the laborer, and that the assignment thereof is properly held to be an assignment of the laborer's claim, carrying with it all of the equitable rights. It seems to us equally clear that a time check, bearing the evidences before referred to, is in no wise a negotiable instrument, does not confer upon the payee or the indorsees any of the rights which would flow from a negotiable instrument, and that the purchaser of such a time check must know that he is taking by assignment the laborer's claim and nothing more, with no right whatever of recourse upon the laborer in any event.
A bill of exchange or negotiable instrument is defined by our negotiable instruments law substantially as follows:
'A bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand * * * a sum certain in money to order or to bearer.' Rem. & Bal. Code, § 3516.
Such an instrument is negotiated by indorsement and delivery, is indorsed by writing the signature of the payee thereon, and as provided in the Negotiable Instruments Act (Rem. & Bal. Code, § 3457), every indorser who indorses without qualification warrants to all subsequent holders in due course: (1) That the instrument is genuine; (2) that he has good title to it; (3) that all prior parties had capacity to contract; (4) that the...
To continue reading
Request your trial