Western Cas. & Sur. Co. v. Lash

• Citation: 290 N.W. 316,67 S.D. 139
• Decision Date: 20 February 1940
• Docket Number: 8212.
• Parties: WESTERN CASUALTY & SURETY CO. v. LASH et al.
• Court: Supreme Court of South Dakota

290 N.W. 316

67 S.D. 139

WESTERN CASUALTY & SURETY CO. v. LASH et al.

No. 8212.

Supreme Court of South Dakota

February 20, 1940

Rehearing Denied April 6, 1940.

Appeal from Circuit Court, Bennett County; John G. Bartine, Judge.

Action by the Western Casualty & Surety Company against John Gretschmann, wherein Leo A. Lash, doing business under the name and style of Lash Lumber Company, intervened. From an unsatisfactory judgment and order overruling a motion for new trial, plaintiff appeals.

Judgment and order reversed, and case remanded, with directions.

Harold P. Gilchrist, of Kadoka, for defendant.

POLLEY Judge.

On the 9th day of March, 1936, the Martin Independent School District No. 1, as first party; John Gretschmann, contractor as second party; and L. A. Lash, intervener, as third party entered into, and executed, an agreement whereby the second party agreed to build a schoolhouse for first party at Martin for the agreed price of $41,397, to be paid by the first party on estimates as the work progressed. Third party was a dealer in lumber and building materials and operated a lumberyard in Hot Springs.

The first party required, before it would sign said contract that the second party would furnish a good and sufficient contract bond equal in amount to the contract price of the building, for the faithful performance of the said contract and to pay for all the labor and material used in the construction of said building.

The second party applied to plaintiff, the Western Casualty & Surety Company, for the bond required by the first party. Said plaintiff agreed to furnish the bond, but upon condition only, that second party have at least $7,000 in cash on hand to be used as working capital for carrying on the work of said construction.

Second party had but $2,000 in cash, and with that amount only was unable to secure the necessary bond; but third party was anxious to secure the contract, and as an inducement to plaintiff to furnish the required bond loaned to second party $5,000 to make up the $7,000 of working capital. This money was placed to the credit of second party in a bank in Hot Springs and plaintiff executed the bond. Second party gave third party his note for $5,000, with interest thereon at 5% per annum, and as a further inducement to third party to advance the said $5,000, second party agreed to purchase from third party all the labor and material to be used in the construction of said school building that third party could and wished to furnish. Second party then proceeded with the construction and completion of the building.

During the construction of the said building second party purchased from third party labor and material, all of which was used in the construction of said building, to the value of $18,265.53, upon which he testified that he made a profit of 10%.

As the work of construction of the building progressed, second party advanced to third party sums of money aggregating more than $15,000. All of this money with the exception of one check for $2,000 was applied by third party on what was due him for labor and material he had furnished to second party in the construction of the building. The $2,000 check above mentioned was applied by third party on the $5,000 note second party had given him when he advanced the $5,000 to be used as working capital. Third party then made out a statement of the amount he claimed to be due him from second party in which he included the $3,000 still due on the $5,000 note, and for this total amount he presented to the plaintiff a bill as the amount that was due him from plaintiff under the provisions of the surety bond. Plaintiff contends that it is not liable to third party for any portion of the $5,000 advanced by him for working capital, and whether plaintiff is liable to third party for all or any part of the said $5,000 is the principal issue to be determined in this case.

At the outset we are met by a motion on the part of third party to dismiss plaintiff's appeal from the order overruling plaintiff's motion for a new trial. This motion is based upon the ground that the notice of intention to move for a new trial was prematurely served. Section 2557, Rev.Code 1919. Said section 2557 requires that before a motion for a new trial can be entertained, the moving party must, "within twenty days after the verdict of the jury if the action were tried by a jury, or after notice of the decision of the court if the action were tried without a jury, serve upon the adverse party a notice of intention," to move for a new trial.

The notice of intention was served before the decision of the court was made; therefore, it was of no force or effect. Muckler v. Smith et al., 51 S.D. 127, 212 N.W. 491.

The notice of intention is jurisdictional, but it is jurisdiction of the person, and not of the subject matter, and may be waived. In this case the intervener appeared generally and took part in the proceedings on motion for new trial and in that way waived the question of jurisdiction of the court; indeed, third party, himself, brought on the motion for new trial. The motion to dismiss the appeal from the order overruling the motion for a new trial is denied.

The trial court allowed intervener's claim for both the $3,000, the balance due on the $5,000 note, and also for the $2,000 represented by the $2,000 check that was applied by intervener on the $5,000 note that plaintiff claimed should have been applied on the bill for labor and materials that were used in the construction of the building.

So far as this case is concerned the only penalty named in the bond is...