Simpson Logging Co. v. Northwest Bridge Co.

• Decision Date: 05 December 1913
• Parties: SIMPSON LOGGING CO. v. NORTHWEST BRIDGE CO. et al.
• Court: Washington Supreme Court

137 P. 127

76 Wash. 533

SIMPSON LOGGING CO. v. NORTHWEST BRIDGE CO. et al.

Supreme Court of Washington

December 5, 1913

Department 1. Appeal from Superior Court, Pierce County; Ernest M. Card Judge.

Action by the Simpson Logging Company against the Northwest Bridge Company and the American Bonding Company of Baltimore. From a judgment in favor of the bonding company, plaintiff appeals. Affirmed.

T. P. Fisk and Gorden & Easterday, all of Tacoma for appellant.

Chapman & Bailey and Frank H. Kelley, all of Tacoma, for respondents.

CHADWICK J.

This action was begun by plaintiff against the defendant to recover the sum of $2,606.44. Judgment was entered against the Northwest Bridge Company and in favor of the American Bonding Company. On January 23, 1911, the bridge company entered into a contract with the plaintiff to furnish all material and labor necessary to construct a bridge over the Satsop river, in Chehalis county, for the sum of $31,000. Payments were to be made as follows: $7,000 on March 10 1911; $7,000 on April 10, 1911; $10,000 on May 10, 1911, and the balance of $7,000 as soon as the work was completed and accepted. The bridge was to be completed on or before June 15, 1911. The contract provided, among other things, that in the event that the bridge company did not make a profit of 10 per cent. on the cost of the bridge, the plaintiff would make the 10 per cent. good up to a maximum sum of $32,500. The engagement of the bonding company was as follows: 'If the said principal shall faithfully perform said contract on its part, according to the terms, specifications, covenants, and conditions thereof (except as hereinafter provided), then this obligation shall be null and void, otherwise to remain in full force and effect.' It was further provided: 'The said owner shall notify the surety in writing before the last payment, or any reserve due the principal under said contract shall be paid.' The bridge company began the construction of the bridge and completed it about August 1, 1911. The contract was completed according to the specifications and no liens have been filed against it. The bridge covered by the contract is referred to in the evidence as 'bridge No. 2.' It also appears that at the time the contract was made, the bridge company was under contract to furnish the labor and material to construct another bridge, which is referred to as 'bridge No. 1.' Bridge No. 1 was about three-fourths completed at the time work was begun on bridge No. 2, and was entirely completed in March, 1911. The testimony does not show that the bridge company failed to make a profit of 10 per cent. on bridge No. 2. It shows a substantial loss on bridge No. 1, and probably shows that no loss was incurred by the bridge company on bridge No. 2. At the time the first bridge was finished, the bridge company was indebted to the Lumberman's Mercantile Company in a large sum of money, approximately $6,000. Payments on bridge No. 2 were made as follows: $7,000 on March 9, 1911; $7,000 on April 8, 1911; $7,000 on May 8, 1911, and $3,000 on June 13, 1911. The logging company furnished to the bridge company tools, appliances, provisions, and board for its workmen. It also paid to one H. E. Ford, on the bridge company's order, the sum of $1,500 for lumber. All of these sums were charged against the bridge company. On June 30, 1911, the account shows that the plaintiff had paid the bridge company $26,538.90, or $4,538.90 more than was then due under the contract. On July 14th the bridge company notified plaintiff that it would not have enough money to meet its obligations, whereupon plaintiff wired the bonding company as follows: 'The contractor informs us that the bridge will be ready for acceptance within a few days and that there are outstanding claims and bills to the amount of approximately ten thousand dollars, with a credit still due him as a final payment on the contract of seven thousand dollars, leaving approximately three thousand deficiency which he is unable to meet at this time and which we look to you to protect. Shall we apply the final payment of seven thousand dollars in liquidation of pressing claims and await final settlement of the remaining claims through your office.' The bonding company replied as follows: 'We consent to your applying balance of contract price in settlement of such lienable claims as may be approved for payment by the Northwest Bridge Company. This wire will not be construed as an admission of liability or waiver of any defenses under bond.' At the time the bonding company was notified, there was an actual balance due the bridge company of $4,461.10. Upon receipt of the last telegram quoted, plaintiff paid the following claims:

1911.

July 28th W. S. Lumber Co....... $1,137 48

August 10th J. E. Connolly...... 439 38

August 21st H. E. Ford.......... 1,981 48

July 20th Jos. Lazerous......... 33 35

November 14th Pen. Ry. Co....... 101 95

November 14th Lumberman's Merch.

Co............................ 3,748 49

The difference between the amount owing and the amount paid is the sum sued for in this action. From a judgment dismissing the complaint the plaintiff has appealed. We will refer to the bonding company as the defendant.

We agree with the conclusions of the trial judge that the evidence and the bill of exceptions rendered by plaintiff are so confusing that a court cannot determine with any degree of certainty which items are lienable and which are not. Many legal propositions are advanced by the respondent to sustain the judgment. We will not discuss all of them, but content ourselves with inquiring whether plaintiff made overpayments in violation of its contract, and whether there were any misapplications of payments.

It will be remembered that at the time plaintiff notified defendant that the bridge company had defaulted, it told it that there was due the final award of $7,000. If this had been so, no liability would have come to the defendant. In this, however the plaintiff was mistaken. The notification, nevertheless, must have indicated to the defendant that there had been no overpayment. It accordingly directed that that sum be applied in payment of lienable items. By the terms of the contract, defendant was entitled to have two things concur--notice of the last payment, and that the whole of the reserved payment be at hand at the time notice was given to it. It was the duty of the plaintiff to keep available the remedy that defendant had reserved unto itself. Peters v. MacKay, 20 Wash. 172, 54 P....