Town of Wakefield v. American Surety Co.

• Decision Date: 19 May 1911
• Citation: Town of Wakefield v. American Surety Co., 209 Mass. 173, 95 N.E. 350 (Mass. 1911)
• Parties: TOWN OF WAKEFIELD v. AMERICAN SURETY CO.
• Court: Supreme Judicial Court of Massachusetts

209 Mass. 173

95 N.E. 350

TOWN OF WAKEFIELD v. AMERICAN SURETY CO.

Supreme Judicial Court of Massachusetts, Suffolk.

May 19, 1911

COUNSEL

M. E S. Clemons, for plaintiff.

John P Leahy, Jos. C. Pelletier, and Francis T. Leahy, for defendant.

OPINION

RUGG J.

This is an action brought for the breach of three bonds, each executed by Minehan & Costa, partners, as principals, and the defendant as surety, to secure faithful performance by said partners of contracts between them and the plaintiff to construct portions of its sewer system. The execution of the contracts and bonds was admitted. The case was sent to an auditor, who found that the work to be done under the contract was abandoned by said partners, and that thereby there was a breach of the condition of each of said bonds. Each contract provided that the copartners 'will not assign any portion of said work, unless by the previous consent of the board [of sewer commissioners of the plaintiff town] to be signified by indorsement of this agreement.' The auditor found that no previous assent to any assignment was so given, and that no assent was indorsed on said contracts or given in any manner, and that said contracts were in fact assigned by said partners to the Conway Construction Company. He also found that there had been no advance payment made by the plaintiff to said partners, and found generally for the plaintiff. The case was then tried with a jury in the superior court. In addition to the auditor's report testimony was introduced from several witnesses to the effect that after the assignment of the contract neither of the partners were upon the work or had anything to do with it, but that it was prosecuted to the knowledge of and without objection by the sewer commissioners wholly by the assignee claiming under the assignment. After the assignee had been at work about six months, the work was stopped by notice to the effect that it was not being prosecuted as required, and that it would be completed by the plaintiff as provided in the contract. The work was so completed at a cost greater than the contract price. At the close of the evidence in the superior court, the defendant having admitted that proper notices of discontinuance of the work by Minehan & Costa and of claim for excess cost over contract price were sent and no question being raised as to the amount of the damages, verdict was directed for the plaintiff.

Since it was admitted that proper notice of discontinuance of the contract was given, a decisive point is whether there was an assignment of the contract by the partners assented to by the plaintiff. Upon this issue the auditor, as above stated, made definite findings in favor of the plaintiff to the effect that there had been assignments which were never at any time assented to by the plaintiff. It is plain under the terms of the contract that an assignment without such assent constituted a breach of the contract. The auditor does not set out the facts or evidence upon which he based this finding. The effect of an auditor's report under such circumstances is stated in Anderson v. Metropolitan Stock Exchange, 191 Mass. 117, at page 121, 77 N.E. 706, at page 707, by the present Chief Justice as follows: 'The auditor's report finding generally for the plaintiff and finding specially these facts is prima facie evidence, which requires a verdict for the plaintiff, unless there is other evidence, either in the report or outside of it to control the findings.' In substance the same proposition was laid down in Phillips v. Cornell, 133 Mass. 546, in these words: 'While the burden of proof is not shifted by the auditor's report, yet as it makes out a prima facie case, it is incumbent on the other party to meet and control it or it will be conclusive against him.' To the same effect is Fisher v. Doe, 204 Mass. 34-40, 90 N.E. 592. The result of these decisions is that where the auditor makes a simple finding in favor of one party without reporting the testimony, and there is no other evidence, a verdict should be directed in accordance with his finding. The case does not stand as it does upon uncontradicted evidence of witnesses, for there the jury may disbelieve the testimony. The statute has clothed an auditor's report with a special evidential character; which in the absence of controlling evidence either stated in the report or put in outside the report, must be accepted by court and jury as final. Where only one conclusion is possible as matter of law, a verdict must be directed.

The question presented is whether there was any evidence to control the auditor's finding to the effect that the contracts had been assigned by the original contractors, and that at no time had such assignments been assented to by the plaintiff. If this finding stands there was a breach of the contract. The plaintiff's officers knew of the assignments, and they permitted work to proceed by the assignee. But there was a considerable correspondence between the attorney for the plaintiff and the defendant, in which the former repeatedly asserted that the town would not assent to the assignments except upon conditions which never have been complied with. The checks of the town in payment for work done all were made to...