Union Indem. Co. v. Ricks

• Decision Date: 10 March 1932
• Docket Number: 6 Div. 751.
• Citation: 224 Ala. 514,140 So. 597
• Parties: UNION INDEMNITY CO. v. RICKS ET AL.
• Court: Alabama Supreme Court

140 So. 597

224 Ala. 514

UNION INDEMNITY CO. v. RICKS ET AL.

6 Div. 751.

Supreme Court of Alabama

March 10, 1932

Rehearing Denied April 7, 1932.

Appeal from Circuit Court, Blount County; Woodson J. Martin, Judge.

Suit on road contractor's bond by J. R. Ricks against the Union Indemnity Company, and intervention of claims by R. D Chambers, A. L. Bains, J. W. Wallace, Albert Holmes, and others. From judgments in favor of the named interveners defendant appeals.

Affirmed.

London Yancey & Brower and J. K. Jackson, all of Birmingham, for appellant.

Inzer, Inzer & Davis, of Gadsden, for appellees.

BOULDIN J.

The action is against the surety upon a contractor's bond for construction of a state highway, project S-170, in Blount county. Gen. Acts 1927, p. 356, § 28.

The appeal is to review judgments rendered in favor of certain interveners, upon claims against the contractor for labor and materials.

The point is here raised that the original suit, brought by J. R. Ricks, in which all other claimants intervened as per statute and order of court, was prematurely brought.

Under our statute, no suit on the bond shall be "commenced until after the complete performance of said contract and final settlement thereof." This means after the date "when the amount due under the contract is determined by the appropriate administrative authority." United States Fidelity & Guaranty Co. v. Benson Hardware Co., 222 Ala. 431, 435, 132 So. 622, 625.

The amount due is so "determined" when the final estimate of the highway department is approved by the Governor. United States Fidelity & Guaranty Co. v. Andalusia Mfg. Co., 222 Ala. 637, 134 So. 18.

The claimants introduced in evidence, over objection of defendant, a certified copy of the auditor's warrant on file in the office of the state treasurer, drawn in favor of W. C. McCoy, the contractor and principal in the bond, purporting to be in payment of final estimate on this project. This warrant was dated September 26, 1929, the date of final settlement alleged in the original complaint in this cause filed October 3, 1929. While this warrant might not be evidence of the date of final settlement as against a plea of the statute of limitations, it was evidence of a final settlement prior to date of its issuance by the constituted legal authority, evidence that the suit was not prematurely filed.

But it is claimed the record discloses that in fact a final settlement for the entire performance of the contract was not made until some days after the suit was filed; that a final settlement prior to bringing suit must be averred and proven as part of plaintiff's case in such actions.

Reliance is had upon the federal rule in actions on contractor's bond of this character. Illinois Surety Co. v. United States, 240 U.S. 214, 218, 221, 222, 36 S.Ct. 321, 60 L.Ed. 609; Fleischmann v. United States, 270 U.S. 349, 46 S.Ct. 284, 70 L.Ed. 624.

Appellees insist the federal rule is founded upon the federal law, under which the United States is given the first security and right of action on the bond, actions by materialmen being subordinated and postponed for six months after final settlement, etc.; that under our statute a defense that the action was prematurely brought should be set up by plea in abatement. This upon the authority of Herndon v. Garrison, 5 Ala. 380; Mahoney v. O'Leary, 34 Ala. 97; Foster v. Napier, 73 Ala. 595.

Under a statute like ours, where only one suit may be brought, and that within sixty days after final settlement, a statute requiring notice to all known creditors of the pendency of such suit and of their right to intervene therein as per order of the court, tantamount to notice that the entire matter is already drawn within the jurisdiction of the court, such creditor may well be lulled into acquiescence, and fail to institute an original suit of his own within the limited time allowed by law.

We think any issue as to the premature filing of the suit should be promptly raised by appropriate plea. The question is one of procedure rather than of substantive law.

In this case, however, the allegation of the complaint touching final settlement had already been adjudicated. There were many interveners. The record shows agreed judgments had already been entered in behalf of many of them before the trial of the interventions now under review. Certainly it is not for the surety to admit the allegations of the complaint applicable alike to all interveners, entering judgments for such of them as he may elect, and thereafter deny such averments as to those interveners he may wish to defeat.

When the allegations going...