Simon v. Aetna Cas. & Sur. Co.
| Decision Date | 12 June 1929 |
| Docket Number | 12678. |
| Citation | 148 S.E. 648,151 S.C. 44 |
| Parties | SIMON v. ÆTNA CASUALTY & SURETY CO. |
| Court | South Carolina Supreme Court |
Appeal from Common Pleas Circuit Court of Greenville County; T. J Mauldin, Judge.
Action by H. H. Simon against the Ætna Casualty & Surety Company. Judgment for plaintiff, and defendant appeals. Reversed and remanded.
Mann & Plyler, of Greenville, for appellant.
Dakyns B. Stover and Dean, Cothran & Wyche, all of Greenville, for respondent.
This is an action for damages, and arises out of default on a building contract entered into between the plaintiff, Simon as owner of the building, and J. Archie Willis & Co., as contractor; the defendant, Ætna Casualty & Insurance Company having the contract to indemnify the owner against loss. Suit was commenced on October 2, 1926, against both the contractor and the surety company.
The complaint alleges that, on August 4, 1925, Willis & Co. contracted to erect for the plaintiff, for a consideration of $32,000, a two-story salesroom, shop, and storage building, in the city of Greenville, according to plans, specifications, and drawings referred to in the contract; that thereafter, August 21, 1925, the defendant, Ætna Casualty & Insurance Company, in consideration of a cash premium of $480, executed and delivered to the plaintiff its bond and insurance policy, in writing, whereby it agreed to indemnify the plaintiff in the sum of $32,000, against any and all loss directly arising by reason of the failure of J. Archie Willis & Co. to faithfully perform its agreement; that up to the time of the default, the contractor had failed to perform its work, in many instances and in numerous particulars, in a skillful and workmanlike manner and in accordance with the plans and specifications; that on January 2, 1926, the contractor abandoned the contract and ceased to perform any work on the building or to carry out the provisions of its agreement; that such default resulted in mechanic's liens being filed against the property, to plaintiff's loss and damage; that the surety company was immediately notified of the default, but it did not elect to assume completion of the abandoned contract, and the plaintiff himself was compelled to do so at an excess cost over the contract price. He asked for $30,000 damages.
The contractor, Willis & Co., made no answer to the complaint. The surety company interposed a general denial, and pleaded that plaintiff had violated the terms of the bond in failing to retain 10 per cent., as required by its provisions, of the value of all work and materials furnished on the job in making payments on the contract price, and in making payments on account of the contract in advance of the progress of the work, and in advancing to the contractor on the contract price several thousand dollars not supported by any claim for materials; that he had ordered many expensive changes in the building, and failed and neglected to let the subcontracts direct to the subcontractors; and that in completing the building he had done so at an unnecessarily great expense, making many alterations and additions not allowed under the terms of the contract.
The case was tried at Greenville, before Judge Mauldin and a jury on June 22, 1927, and resulted in a verdict for the plaintiff in the sum of $21,480.32. At the proper time during the trial of the case, the surety company made a motion, on numerous grounds, for a directed verdict, which was refused by the court. A motion for a new trial, heard some time after the case was tried, was also overruled by the court. The surety company now appeals to this court, alleging that Judge Mauldin committed numerous errors-- in the trial of the case, and in refusing the motions for a directed verdict and for a new trial.
The exceptions are 20 in number. In our discussion, however, we shall group them wherever that may be done, following, in the main, the plan adopted by the respondent in his argument.
We shall group and consider, first, exceptions 1, 2, 3, and 5, which allege error on the part of the trial court in refusing to direct a verdict for the defendant: (1) Because the plaintiff materially altered and varied the contract to the injury of the surety, in that (a) he made payments to the contractor without requiring the architect's certificates as the basis of same, and (b) he failed to let subcontracts direct to the subcontractors; (2) because the plaintiff violated the express terms and provisions of the bond, in that (a) in making payments on the contract price, he failed to retain, as required by the bond, 10 per cent. of the value of all work and materials furnished on the job, and (b) he made alterations and additions in erecting the building, which increased the cost to complete it more than 20 per cent., without the written consent of the surety; (3) because the plaintiff made excessive payments to the contractor prior to default, in that (a) he made payments in advance of the progress of the work, and (b) he advanced large sums of money to or for the benefit of the contractor which had not been earned under the terms of the contract; and (5) because the provisions for the financing of the contract, as well as those relating to the prosecution of the work, were materially altered and disregarded by the plaintiff.
We have given much time and study to the voluminous record in this case. Our careful examination of the testimony leads to the conclusion that the conflicting evidence, as to subdivision (b) of exception (2), as to subdivisions (a) and (b) of exception (3), and as to exception (5), required the submission to the jury of the questions here involved, as to whether or not the plaintiff had violated the provisions of the contract and the terms of the bond in the particulars specified. As to subdivisions (a) and (b) of exception (1), it was admitted by the plaintiff and the architect that payments were made to the contractors without the architect's certificates as required by the contract, and that the subcontracts were not let direct by the plaintiff to subcontractors as the contract required, and as to subdivision (a) of exception (2), Simon himself testified that "there was no effort to retain any 10%." From this testimony and these admissions, it is clear that the contract was violated in such particulars; and unless it appeared that the bonding company suffered no injury thereby, or that it waived the forfeiture thus created, a verdict for the defendant should have been directed by the trial court.
As to whether there was waiver by the defendant bonding company of the forfeiture of the bond by the respondent, the testimony is in sharp conflict; and we think that this question, in view of the evidence adduced, was properly submitted to the jury. There was testimony tending to show that the bonding company, through its agents, after knowledge of the alleged forfeiture of the bond by the respondent, did certain things from which a waiver on its part of such forfeiture might be reasonably inferred by the jury. The trial judge properly refused the motion to direct a verdict on the grounds set out in these exceptions.
In its motion for a directed verdict the appellant relied also on the following ground: "That the reasonable and necessary cost of completing the building in accordance with the contract, plans and specifications did not exceed the balance due on the contract price after allowing proper credit for the amount that plaintiff should have retained, advance improperly made and the cost of extras."
The motion on this ground was refused, and the appellant brings error by its fourth exception. We do not think there was error. The testimony on this point was conflicting, was susceptible of more than one inference, and made a question of fact for the jury.
The sixth exception imputes error to the trial judge in admitting in evidence a letter of Ben H. Wiseberg to the respondent, dated August 11, 1925; the specifications of error being that: (a) The letter was written prior to the execution of the bond and by one who was not an agent of the defendant, but was, on the contrary, the agent of the plaintiff; and (b) the letter varies or alters the terms of the bond, which was executed ten days later and the terms of which are clear and unambiguous.
It appears that the respondent wrote to his uncle, Ben H. Wiseberg, of Atlanta, Ga., with reference to procuring a bond covering the building contract. Wiseberg's reply is the letter objected to.
As to specification (a), the appellant contends that Wiseberg was merely a broker and was the respondent's agent, under the general principle that an insurance broker is the agent of the insured, and that the Wiseberg letter is merely a letter from an agent to his principal, citing 14 R. C. L. 868, in support of this position: See, also, 4 R. C. L. 242, 256.
The respondent, in answer to this objection, contends that under the law of this state Wiseberg was the agent of the surety company, citing section 4089, vol. 3, 1922 Civil Code, as follows: "Any person who solicits insurance in behalf of any insurance company not...
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