Wainwright Trust Co. v. United States Fid. & Guar. Co. No. 9579

• Decision Date: 19 December 1916
• Parties: WAINWRIGHT TRUST CO. v. UNITED STATES FIDELITY & GUARANTY CO. No. 9579.
• Court: Indiana Appellate Court

63 Ind.App. 309

114 N.E. 470

WAINWRIGHT TRUST CO.

v.UNITED STATES FIDELITY & GUARANTY CO. No. 9579.

Appellate Court of Indiana, Division No. 1.

Dec. 19, 1916.

Appeal from Circuit Court, Hamilton County; Meade Vestal, Special Judge.

Action by the Wainwright Trust Company, Receiver, against the United States Fidelity & Guaranty Company. From judgment for defendant, plaintiff appeals. Affirmed.Gentry & Campbell, of Noblesville, for appellant. Pickens, Moores, Davidson & Pickens, of Indianapolis, for appellee.

McNUTT, J.

This was an action by appellant, as receiver for the firm of Holleran, Haverstick, Wheeler & Patterson, in the court below, against appellee as surety upon a contractor's bond, the contractor being one Black. The appellee demurred to appellant's complaint, the same being the fourth amended, for want of sufficient facts, which was sustained. This action of the court is the only error assigned.

The contract, which is made a part of the complaint by exhibit, required said Black to place the gravel on two public highways of Hamilton county known as the Eiler Road and the Hunter Road, which appellant's firm had contracted with the board of commissioners of said county to construct according to certain plans and specifications. Said Black agreed to place the gravel on said roads on or before the 1st day of January, 1913, and the contract was entered into on the 17th day of July, 1912.

The bond, which is also made a part of the complaint by exhibit, reads as follows:

“Know all men by these presents, that W. P. Black of Fishers, Indiana (hereinafter called the principal), and the United States Fidelity & Guaranty Company, a corporation created and existing under the laws of the state of Maryland, and whose principal office is located in Baltimore City, Maryland (hereinafter called the surety), are held and firmly bound unto Holleran & Haverstick, Noblesville, Indiana (hereinafter called the obligee), in the full and just sum of five thousand ($5,000.00) dollars, lawful money of the United States, to the payment of which sum, well and truly to be made, the principal binds himself, his heirs, executors and administrators, and the said surety binds itself, its successors and assigns, jointly and severally, firmly by these presents. Signed, sealed and delivered this 30th day of September, A. D. 1912.

“Whereas, said principal has entered into a certain written contract with the obligee dated July 17, 1912, to furnish labor and material for the completion of a gravel road, known as the Eiler Road, in accordance with contract which is made a part of this bond:

“Now, therefore, the condition of the foregoing obligation is such that if the said principal shall well and truly indemnify and save harmless the said obligee from any pecuniary loss resulting from the breach of any of the terms, covenants and conditions of the said contract on the part of the said principal to be performed, then this obligation shall be void; otherwise to remain in full force and effect in law: Provided, however, that this bond is issued subject to the following conditions and provisions:

“First. That no liability shall attach to the surety hereunder unless, in the event of any default on the part of the principal in the performance of any of the terms, covenants or conditions of the said contract, the obligee shall promptly, and in any event not later than thirty days after knowledge of such default, deliver to the surety at its office in the city of Baltimore, written notice thereof, with a statement of the principal facts showing such default and the date thereof; nor unless the said obligee shall deliver written notice to the surety at its office aforesaid, and the consent of the surety thereto obtained, before making to the principal the final payment provided for under the contract herein referred to.

“Second. That in case of such default on the part of the principal the surety shall have the right, if it so desire, to assume and complete or procure the completion of said contract; and in case of such default, the surety shall be subrogated and entitled to all rights and properties of the principal arising out of the said contract and otherwise, including all securities and indemnities theretofore received by the obligee and all deferred payment, retained percentages and credits, due to the principal at the time of such default or to become due thereafter by the terms and dates of the contract.

“Third. That in no event shall the surety be liable for a greater sum than the penalty of this bond, or subject to any suit, action or other proceeding thereon that is instituted later than the 30th day of July, A. D. 1913.

“Fourth. That in no event shall the surety be liable for any damage resulting from, or for the construction or repair of any work damaged or destroyed by act of God, or the public enemies, or mobs, or riots, or civil commotion, or by employés leaving the work being done under said contract, on account of so-called ‘strikes' or labor difficulties.

“In testimony whereof, the said principal has hereunto set his hand and seal and the said surety has caused these presents to be executed by its attorney in fact, sealed with its corporate seal, the day and year first written.”

The complaint alleges, in substance, that on March 10, 1915, the appellant was appointed receiver for said firm; that on July 17, 1912, said firm entered into said contract; that in consideration of said contract and as a part thereof said appellee, as surety for the contractor, Black, executed to said firm said bond for the faithful performance of said contract; that said contractor complied with the terms of said contract relating to said Hunter Road and received the consideration therefor, but failed to perform any part of the work on said Eiler Road; that on or before said 1st day of January, 1913, said Black and said firm mutually agreed to and did extend the time for the completion of said work and in consideration of such extension said firm agreed to waive any claim for damages for the work not being completed on or before said 1st day of January, 1913, and that said Black upon his part agreed to pay, and did pay, to appellee the sum of $25 for the extension and security of said bond, of all of which facts said appellee then had knowledge; that after the extension of the time for the completion of said work appellant, said Black and appellee appeared before the board of commissioners of Hamilton county and obtained from it an order extending the time for the completion of said Eiler Road; that appellee knowing that said bond contained a provision “that in no event shall the surety be subject to any suit or other proceeding thereon that is instituted later than July 30, 1913,” did, on or about November 20, 1913, accept from said Black an additional premium of $25 for the continuation and extension of the terms of said bond, and that appellee has ever since retained said sum; that on November 21, 1913, said firm,...