Union Stone Co. v. Bd. of Chosen Freeholders of Hudson County

• Decision Date: 20 June 1906
• Citation: 65 A. 466,71 N.J.E. 657
• Parties: UNION STONE CO. et al. v. BOARD OF CHOSEN FREEHOLDERS OF HUDSON COUNTY et al.
• Court: New Jersey Court of Chancery

65 A. 466

71 N.J.E. 657

UNION STONE CO. et al.

v. BOARD OF CHOSEN FREEHOLDERS OF HUDSON COUNTY et al.

Court of Chancery of New Jersey.

June 20, 1906.

Action by the Union Stone Company and others against the board of chosen freeholders of Hudson county and others. Decree in favor of complainants.

Under the above title there were tried three causes, which were consolidated. The other pending suits were by Washburn Bros. Company and by Vanderbeek & Sons Company against the same defendants. The complainants are claimants under the municipal lien act. The defendants are the freeholders of the county of Hudson, Mrs. Jennie A. Judge, executrix of her husband, Gregory A. Judge, and Ferdinand Heintze, Daniel Y. Lewis, and Henry Byrne, who were sureties on the bond to the county given by Judge, the contractor. On September 29, 1902, the board of chosen freeholders of the county of Hudson made a contract with Gregory A. Judge for the erection of two additions to the County Lunatic Asylum for the contract price of $46,400. The contract states: "In order to enable the said contractor to prosecute the work advantageously, the said architect shall, from time to time, as the work progresses, but not oftener than once a month, or in less sums than two thousand dollars, make an estimate of the amount of work done under this contract since the last preceding estimate was made, and the value thereof according to the terms of this contract. "Upon which estimate being made 80% of such estimated value shall be paid" to the contractor. It was further provided in the said contract that the contractor agrees: "If the work under this agreement shall be abandoned * * * the said board shall have the power to notify the aforesaid contractor to discontinue all work, * * * and thereupon the said contractor shall discontinue said work * * * and the said board shall thereupon have the power to place such and so many persons as it deems advisable, by contract or otherwise, to work at and complete the work herein described, or such part thereof, and to use such materials as it may find upon the line of the said work, or to procure other materials for the completion of the same, and to charge the expense of said labor and materials to aforesaid contractor; and the expense so charged shall be deducted and paid by the parties of the first part out of such moneys as may then be due, or may at any time thereafter grow due, to the said contractor under and by virtue of this agreement; * * * and in case such expense is less than the sum which should have been payable under this contract if the same had been completed by the said contractor, he shall be entitled to receive the difference; and in case such expense shall exceed the last said sum he shall pay the amount of such excess to the parties of the first part. * * *" On the same day a bond was given to the county, executed by Gregory A. Judge, Ferdinand Heintze, Daniel Y. Lewis, and Henry Byrne, in which they are bound in the sum of $20,000. After reciting that Judge had made the contract aforesaid, which is made a part of the bond, the condition is "that if the above-bounded Gregory A. Judge shall well and truly in all things and in good, sufficient, and workmanlike manner perform said contract according to the true intent and meaning thereof, and in each and every respect comply with the conditions and covenants therein, and shall at all times thereafter indemnify, keep and save harmless the said the board of chosen freeholders of the county of Hudson, perfectly and entirely indemnified of, from and against any, and all manner of actions, suits, liabilities, charges, liens, costs and payments, for and by reason of the premises or by reason of any debt or obligation contracted for any such work or materials furnished under or by virtue of said contract, and keep all county property and the property of the said the board of chosen freeholders of the county of Hudson clear and free of and from all liens and liabilities by reason of the doing of any of the said work or finding of materials therefor as aforesaid by the said Gregory A. Judge, or any other person or party of his authority, direction or request, if authorized as aforesaid, then the above obligation to be void, otherwise to be and remain in full force and virtue."

Judge began work under the contract, and proceeded therewith for some little time, but not to the entire satisfaction of the architect. On July 14, 1903, a resolution was adopted by the freeholders reciting that the architect had certified in writing that the work was being unnecessarily delayed, and that the contractor was willfully violating his contract, and notifying the contractor to discontinue all work under said contract; and further directing the architect to prepare a specification for the work undone and necessary to be done to completely perform said contract, and report to the board, to the end that the board might award the contract for the doing of such work to some other person, pursuant to said contract. On the 31st of July, 1903, the architect informs the board that, in pursuance of its directions, he has prepared specifications for the completion of the work, and on the 6th of August, 1903, the board passed a resolution which, after reciting that, in spite of repeated notices, the contractor had failed to perform the work, and in the opinion of the board the said contractor has practically abandoned his contract, it was resolved that the clerk of the board be directed to notify the bondsmen of the said Judge that the board will hold them individually and collectively for the faithful performance of the contract. After the passage of this resolution some conferences were held between the sureties on the Judge bond and certain members of the board of chosen freeholders with relation to the matter. On December 3, 1903, the board of freeholders passed the following resolution:

"Whereas, on July 14, 1903, this board adopted a resolution directing Gregory A. Judge, contractor, to discontinue the work under his contract, dated September 29, 1902, for the erection of additions to the County Hospital for the Insane; and "Whereas, on August 6, 1903, this board adopted a further resolution notifying Daniel Y. Lewis, Henry Byrne and Ferdinand Heintze, the bondsmen of said Judge, that they would be held responsible for the fulfillment of the contract of said Judge; and

"Whereas, after the adoption of the said resolution the said Gregory A. Judge died, and said Daniel X. Lewis, Henry Bryne and Ferdinand Heintze, after consultation and negotiation with the legal representatives of said Judge, undertook the performance of the work in accordance with the specifications and provisions of said contract, the said Judge having abandoned the same; and

"Whereas, Mr. Hugh Roberts, the architect in charge of said work, has certified that portions of the work under said contract have been completed by said bondsmen and that moneys are now due therefor under the provisions of the contract.

"Resolved, That the action of the said Daniel Y. Lewis, Henry Byrne and Ferdinand Heintze in undertaking the completion of the work under said contract be and the same is hereby approved, and that the moneys to grow due under said contract upon the performance of the uncompleted portion of the work be paid to the said Daniel ¥. Lewis, Henry Byrne and Ferdinand Heintze, upon certificate of the architect, as provided in the contract with the said Judge: provided, however, that the legal representatives of the said Judge shall execute and deliver to this board proper instruments in writing, to be approved by counsel of this board, releasing this board from all claim and obligation under said contract: and provided further, that this resolution shall in no wise affect the rights of any person who may have performed any work or furnished any materials to the said Judge in the performance of the said contract"

After the passage of this resolution there was paid to the defendants Heintze, Lewis, and Byrne $30,559. The architect had certified that Judge had done $0,500 worth of work, and had figured that he was entitled to 85 per cent. of this amount, in round figures $5,500, which the county had paid him, retaining $1,000. The contract provided that the contractor should only be paid 80 per cent. of the current estimates, so that the architect certified an overpayment of 5 per cent. At the time of the hearing, the financial account stood in this way: There had been paid to Judge $5,500; there had been retained in the hands of the county on account of work done by Judge $1,000; there had been paid to Lewis, Heintze, and Byrne $30,559; the total payments, therefore, were $36,059, which, deducted from the contract price of $46,400, left all told in the hands of the county $10,341. It is proven that the contracts made by Heintze, Lewis, and Byrne, to complete the work called for the aggregate payment of $37,864. The contractor Judge died in the month of September, 1903, and his widow was his executrix. On the 16th day of December, 1903, she executed a release to the board of chosen freeholders of the county of Hudson "of and from all claim and demand which I, executrix as aforesaid, or said Gregory A. Judge in his lifetime, might have had, now have, or ever can have, for or by reason of a contract made between the said Gregory A. Judge and the said board of chosen freeholders of the county of Hudson for the erection of additions to the asylum of the said board of freeholders at Secaucus, Hudson county. Said contract bears date the ——— day of ———, one thousand nine hundred and two, and the said work has been undertaken by Ferdinand Heintze, Daniel Y. Lewis, and Henry Byrne, sureties of the said Gregory A. Judge, for the performance of said work." On the same day, in consideration of $1, she assigns unto Heintze, Lewis, and Byrne the contract just described, reciting that they, "having been the...