Utah State Building Commission v. Great American Indemnity Co.

• Decision Date: 18 August 1943
• Docket Number: 6591
• Citation: 105 Utah 11,140 P.2d 763
• Court: Utah Supreme Court
• Parties: UTAH STATE BUILDING COMMISSION, for Use and Benefit of MOUNTAIN STATES SUPPLY CO. v. GREAT AMERICAN INDEMNITY CO. et al

140 P.2d 763

105 Utah 11

UTAH STATE BUILDING COMMISSION, for Use and Benefit of MOUNTAIN STATES SUPPLY CO. v. GREAT AMERICAN INDEMNITY CO. et al

No. 6591

Supreme Court of Utah

August 18, 1943

Appeal from District Court, Second District, Weber County; Lester A Wade, Judge.

Action by Utah State Building Commission, an agency of the State of Utah, for the use and benefit of the Mountain States Supply Company, against Great American Indemnity Company, Frank Campion, doing business under the name of Campion Company and another, with respect to a sum owed for construction material. From a judgment for plaintiff, defendants appeal.

Judgment affirmed.

Thatcher & Young, George H. Lowe, and J. Quill Nebeker, all of Ogden for appellants.

Elias Hansen, of Salt Lake City, for respondent.

CROCKET, District Judge. WOLFE, C. J., and LARSON and McDONOUGH, JJ., concur. MOFFAT, J., concurs in the result. WADE, J., having disqualified himself, did not participate.

OPINION

CROCKET, District Judge.

This is an action by the Utah State Building Commission for the benefit of the Mountain States Supply Company against Frank Compion, general contractor, and his subcontractor, G. W. Sargent, and Campion's surety, the Great American Indemnity Company. Campion was the general contractor on the Utah State Tuberculosis Sanatorium at Ogden. In connection with this contract, he furnished a bond issued by the Great American Indemnity Company, herein referred to as "the surety," which bond was conditioned to pay for all materials going into the building. The defendant, G. W. Sargent, was a subcontractor to whom the plumbing work on said building was let by Campion. Sargent used certain materials in said building which were purchased from the Mountain States Supply Company, for which the latter company has not been paid, and it is for such payment that this suit is brought on behalf of the Supply Company. From a judgment for the plaintiffs, all of the defendants appeal.

The first matter to be disposed of in this case is the motion of the respondents to strike the bill of exceptions. It is conceded that the Bill was not settled nor filed within the time allowed by law; the appellants made no showing as to any justification or excuse for not filing it in time, and no order was made extending the time. It is only properly before this court if upon stipulation; the stipulation on file makes the usual recitals concerning the bill being a full, true, and correct record of the proceedings, and contains the following proviso:

"Provided, however, that the plaintiff reserves and does not waive any right it may have to move to strike the Bill of Exceptions or to take such other steps as may be deemed proper if the time for settling said Bill of Exceptions has not been kept alive or is not timely applied for."

It is stated in the brief of the appellant Sargent that appellants believe that the respondents waived the question of the time of settling the bill by signing that stipulation. Are we to understand that this stipulation was binding on the respondents and not on the appellants, or that the appellants take the benefit of the favorable portions of the stipulation and ignore the unfavorable ones?

It plainly and unequivocally appears, and both parties agreed that the respondents did not waive any rights with respect to striking the bill by the stipulation. All that can be said for the stipulation is that apparently the plaintiff was willing to stipulate that the Bill as presented was full, true, and correct, in order to avoid any controversy as to what it should contain, but it certainly was made clear that the plaintiff reserved its rights to have it stricken because of it being presented too late. For the appellants to request this court to go so far as to suppose that there was some legitimate reason for not having the bill settled nor filed in time and on that basis to deny the motion to strike is asking the court to indulge in a great deal of conjecture for the benefit of the appellants. The bill accordingly is stricken.

The review is limited to the judgment roll, which contains comprehensive findings of fact covering all matters discussed herein.

The surety company claims that the bond it executed is void and unenforceable because of its failure to name the State of Utah as the obligee. The statute requiring such bond, 17-1-1, Revised Statutes of Utah 1933 (now known as the same Section, U. C. A. 1943), provides:

"When such contract is made with the state, or with a state institution, board or commission which is not a body politic or corporate, the state shall be named as the obligee in such bond."

This statute was no doubt intended to provide a means for any such institution to receive the benefit of such a bond when it had not the legal capacity to do so on its own behalf. But the defendants assert that the Utah State Building Commission is not a "body politic or corporate" and that therefore the bond should have run to the State of Utah, and this suit should have been brought in its name.

This contention leads us first to inquire as to what is a "body politic or corporate." Reference to 5 Words and Phrases, Perm. Ed., p. 602, reveals that the term "body politic" is an old term for a corporation or an association of individuals, and usually applied to the state or other public associations. For one having a further interest in the term, that work traces it back to the institutions of the Romans and Greeks.

The term "body corporate" is a term of more common usage. 1 Bouv. Law Dict., Rawles Third Revision, p. 374, says:

"Body corporate: An early and undoubtedly correct term to apply to a corporation."

At 8 Corpus Juris, p. 1136, the term "body corporate" is defined as a corporation; 11 C. J. S., Body, p. 379 states:

"Body corporate is a term applied to corporations, public and private."

Black, Law Dictionary, gives a similar definition and adds:

"Body corporate and politic: A term particularly applied to a public corporation having powers and duties of government."

Neither the name an entity is given, nor the failure to properly characterize it by name, determines its status in the law. We must look to the nature of the entity, its powers and duties, to determine whether or not it is a corporation. Rees v. Olmsted, 6 Cir., 135 F. 296, 297, 68 Corpus Juris 67. In Volume 1, Fletcher Cyc. of Corporations, Perm. Ed., 210, it is stated:

"A board or commission serving the whole state, in control of such matters as highways may be a public corporation, although it is not so called by the legislature; and if it has the attributes of a corporation, it will be so regarded," citing the case of State Highway Commission of Missouri v. Bates, 317 Mo. 696, 296 S.W. 418."

In that case the question was presented as to whether or not the Missouri Highway Commission was a corporate entity separate from the sovereign. The court refers to various authorities touching on this problem, and basing its decision on the fact that the statute permits the commission to contract, to sue and be sued, held that it was a corporate entity.

A leading case cited by most later ones discussing this subject is that of Gross v. Kentucky Board of Managers of World's Columbian Exposition, 105 Ky. 840, 49 S.W. 458, 43 L.R.A. 703. The court held that the said Board of Managers, appointed by the Governor as an agency of the State, although not expressly called such, was a corporate entity which could be sued for breach of contract because it had the power to contract.

A case closely resembling the instant one is that of Whipple v. Tuxworth, 81 Ark. 391, 99 S.W. 86; in that case, the question was whether or not improvement districts created by statute were corporations. The court stated at page 90 of 99 S. W.:

"Improvement districts in this state are organized by the city councils of cities and towns under a valid law. They are given a particular name, and endowed with perpetual succession until their object is accomplished, with power to make contracts, incur debts, issue bonds, collect assessments, to sue, and to compel the city council by mandamus to make assessments. * * * The effect of the statute is to make them corporations, though they are not denominated as such." Citing other case.

In the case of Hancock v. Louisville & Nashville Railroad, 145 U.S. 409, 415, 12 S.Ct. 969, 36 L.Ed. 755, the Supreme Court of the United States also referred to this problem and stated at page 416 of 145 U.S., at page 971 of 12 S. Ct.:

"This prescribed portion of Shelby county was authorized to issue bonds and subscribe stock * * * if this entity has power to create a debt, it becomes subject to suit * * * it was, though not named, a corporate entity."

This was so, even though no express power to sue or be sued was given to it by statute.

Is the Utah State Building Commission then a corporation? Reference to Volume IX, Words and Phrases, Perm. Ed., page 685, indicates that the distinguishing characteristics of a corporation are that it is an artificial person, a legal entity, capable of acting through its corporate officers and agents, of suing, being sued, of taking and holding property, and of contracting in its own name, and of continuing to exist independent of the individuals who compose it.

The Utah State Building Commission possesses all of these attributes. Title 10, Revised Statutes of Utah, 1933, creates the Utah State Building Commission, whose members are to be appointed by the Governor, provides for their terms of office and succession.

Section 10-0-7 of said title sets out its powers and duties, among which are the following:

"* * * shall carry out the building and expansion program of the state provided by law. * * *

"(3)...