W. F. Magann Corp. v. Virginia-Carolina Elec. Works, Inc., VIRGINIA-CAROLINA

• Decision Date: 15 January 1962
• Docket Number: VIRGINIA-CAROLINA,No. 5355,5355
• Citation: 123 S.E.2d 377,203 Va. 259
• Court: Virginia Supreme Court
• Parties: W. F. MAGANN CORPORATION, ET AL. v.ELECTRICAL WORKS, INCORPORATED. Record

Page 377

123 S.E.2d 377

203 Va. 259

W. F. MAGANN CORPORATION, ET AL. v. VIRGINIA-CAROLINA ELECTRICAL WORKS, INCORPORATED.

Record No. 5355.

Supreme Court of Appeals of Virginia

January 15, 1962.

John A. MacKenzie (Harvey E. White, Jr.; MacKenzie & Babb; White, Ryan & Reynolds, on brief), for the plaintiffs in error.

William C. Coupland (W. L. Berkley, III; Jett, Sykes & Coupland, on brief), for the defendant in error.

JUDGE: BUCHANAN

BUCHANAN, J., delivered the opinion of the court.

The question to be resolved in this case is whether a subcontractor is liable under its indemnity contract to its general contractor for damage done to the work by the act or neglect of a third party.

W. F. Magann Corporation, the general contractor, now one of the appellants, entered into a contract with Hampton Roads Sanitation District Commission to furnish the materials and perform the labor for constructing a combined sewage pumping station and office building at the corner of Plume and Atlantic streets, in Norfolk. Magann and Royal Indemnity Company, its surety, the other appellant, executed and delivered to the Commission an owner's protective bond, as required by § 11-23 of the 1950 Code.

Virginia-Carolina Electrical Works, Incorporated, the appellee, entered into a contract with Magann in which it agreed, for a consideration of $31,734.69, to furnish, install, test and guarantee all electric power and light conduit, lighting fixtures, underfloor wiring system, wiring, switchgear, controls and accessories for the job, being Item 13 of the general contract, which also provided: 'This Contractor shall install duct and wiring from the existing manhole of the Virginia Electric and Power Company into the building as shown on the drawings.'

Virginia-Carolina in its subcontract with Magann agreed to indemnify Magann and save it harmless from, among other things, 'any and all loss, damage or expense which it may sustain or to which it may be put, by reason of any injury or damage to its property or that of any other person arising out of the performance of this work, or by or on account of any act, omission, or negligence of the subcontractor, its agents, employees, sub-contractors, vendors, materialmen, or any other person having anything whatsoever to do in connection with the work of the sub-contractor.'

After the completion of the work Virginia-Carolina brought this action to recover from Magann and its surety the unpaid balance of the subcontract price, alleged to be $8,364.39.

Magann and its surety filed a special plea setting forth Virginia-Carolina's indemnity agreement and alleging that during the construction flood waters entered the building through conduits installed by Virginia- -Carolina and not properly sealed and protected by it, as a result of which certain electric motors, pumps and equipment were badly damaged. The plea further alleged that Virginia-Carolina accepted responsibility for the damage and authorized Magann to have the damage repaired, which it had done at the cost of $5,808.96. It further alleged that for the delay occasioned by the damage a penalty had been assessed against Magann, of which Virginia-Carolina's pro rata share was $497.37. Magann had, it alleged, deducted the sum of these two items from the balance due Virginia-Carolina on its subcontract and sent Virginia-Carolina a check for $1,723.93 for the balance due it, which Virginia-Carolina still had in its possession.

Magann also filed a counterclaim against Virginia-Carolina asking judgment for $6,306.33, the sum of the two items of repairs and delay, on the ground that they resulted from Virginia-Carolina's negligence. However, the court struck out Magann's evidence on the question of negligence, no error was assigned to that ruling and it need not be further noticed.

The court, without a jury, heard the evidence offered by the parties on the question of liability under the indemnity provision of the contract and held that the indemnity did not cover the damages complained of and that Virginia-Carolina was not chargeable with a pro rata share of the penalty for delay. It entered judgment in favor of Virginia-Carolina against Magann for the $8,364.39 and the case is here on Magann's assignment of error to that ruling.

There is no substantial conflict in the relevant evidence. Virginia-Carolina's work, under its subcontract, included the installation of four steel pipes, called nipples or sleeves, four inches in diameter and about 26 inches long, extending through the Plume street wall of the building at about 3 1/2 feet below the street surface, and so that about 1 1/2 inches of the nipple extended out beyond each side of the wall. As described in Virginia-Carolina's brief:

'* * * The nipples on the outside were to be connected by means of conduits extending from the outside openings into a manhole which was to be installed in the sidewalk area by the Virginia Electric and Power Company. The openings on the inside were to be extended by conduits to a switch gear box when and as the gear box and the manhole were installed, and then electric cables were to be drawn through these conduits and nipples from the manhole to the switch box.'

Virginia-Carolina completed the job of installing these nipples around two months prior to the flooding, which occurred October 5, 1957. It did not make the extension through the nipples into the manhole because, as its manager of the project testified, they had to wait until Virginia Electric and Power...