Western Contracting Corp. v. National Surety Corp.

• Decision Date: 16 September 1947
• Docket Number: No. 5607.,5607.
• Citation: 163 F.2d 456
• Parties: WESTERN CONTRACTING CORPORATION et al. v. NATIONAL SURETY CORPORATION.
• Court: U.S. Court of Appeals — Fourth Circuit

163 F.2d 456 (1947)

WESTERN CONTRACTING CORPORATION et al. v. NATIONAL SURETY CORPORATION.

No. 5607.

Circuit Court of Appeals, Fourth Circuit.

September 16, 1947.

James M. Guiher, of Charleston, W. Va., (Steptoe & Johnson, of Charleston, W. Va., on the brief), for appellants and cross-appellees.

Thomas B. Jackson, of Charleston, W. Va. (Jackson, Kelly, Morrison & Moxley, of Charleston, W. Va., on the brief), for appellee and cross-appellant.

Before PARKER and DOBIE, Circuit Judges, and CHESNUT, District Judge.

PARKER, Circuit Judge.

Western Contracting Company and Ralph Myers Construction Company, acting together as joint venturers under the name of Myers-Western, entered into a contract with the United States for the construction of an airport at Parkersburg, W. Va. They then made a subcontract with one Haddad to do the drainage work required by the principal contract. Haddad gave a performance bond and a payment bond, with the National Surety Company as surety on both, for the faithful performance of his obligations under the subcontract and the payment of claims for labor and materials.

This action was instituted by the subcontractor, Haddad, to recover damages of Myers-Western for alleged breach of contract. Myers-Western filed answer denying that it had broken the contract, alleging that Haddad was guilty of breaking it and asking, by way of counterclaim, a recovery of damages against him and his surety, the National Surety Company. That company was brought in as a defendant by order of court and filed answer to the counterclaim of Myers-Western denying that Haddad had breached the contract or that Myers-Western had sustained the damage that it claimed. The Surety Company pleaded by way of affirmative defense that it had been discharged as surety, (1) because of an alleged agreement of November 1944 settling a dispute which had arisen in connection with the performance of the subcontract and (2) because of an alleged agreement of April 1945 settling the liability of the parties under the subcontract and discharging the surety from further liability.

The surety filed a motion for judgment on the pleadings, a motion for summary judgment and a motion, if these were not granted, for a separate trial of the issues raised by its affirmative defenses. The motions for judgment on the pleadings and summary judgment were denied, but the motion for separate trial was granted. The trial judge heard evidence on the issues raised by the affirmative defenses and, while holding against the surety on the first defense, held with it on the second, and entered judgment that Myers-Western recover nothing from the surety on the performance bond. No adjudication was made, however, with respect to liability on the payment bond. No adjudication was made as to the liability of either Myers-Western or Haddad for breach of contract, but trial of the issues with respect thereto was delayed while appeals from the adjudication on the liability of the surety were taken. Myers-Western has appealed from the adjudication that the surety was discharged from liability under the performance bond. The surety has filed a cross appeal complaining of the failure of the court to hold that it was discharged from liability under the payment bond.

It is perfectly clear that, since the court made no adjudication as to liability on the payment bond, there is no basis for the cross appeal. It is equally clear, we think, that the appeal from the adjudication on the performance bond is fragmentary and must be dismissed as premature. The appellate jurisdiction of this court extends only to the review of "final decisions" of the District Courts, except in a limited class of cases not here material. 28 U.S. C.A. § 225. As was said by the Supreme Court in Arnold v. United States for Use of W. B. Guimarin & Co. 263 U.S. 427, at page 434, 44 S.Ct. 144, 147, 68 L.Ed. 371: "It is well settled that a case may not be brought here by writ of error or appeal in fragments; that to be reviewable a judgment or decree must be not only final, but complete, that is, final not only as to all parties, but as to the whole subject-matter and as to all the causes of action involved; and that if the judgment or decree be not thus final and complete, the writ of error or appeal must be dismissed for want of jurisdiction. Hohrst v. Hamburg-American Packet Co. 148 U.S. 262, 264, 13 S.Ct. 590, 37 L.Ed. 443; Collins v. Miller 252 U.S. 364, 370, 40 S.Ct. 347, 64 L.Ed. 616; Oneida Navigation Corporation v. W. & S. Job, 252 U.S. 521, 522, 40 S.Ct. 357, 64 L.Ed. 697; and cases therein cited." See also Bowles v. Commercial Casualty Ins. Co., 4 Cir., 107 F.2d 169; Hyman v. McLendon, 4 Cir., 102 F.2d 189, 190; Fields v. Mut. Benefit Life Ins. Co., 4 Cir., 93 F. 2d 559, 561; Lockhart v. New York Life Ins. Co., 4 Cir., 71 F.2d 684; Toomey v. Toomey, 80 App.D.C. 77, 149 F.2d 19.

Rule 54(b) of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c, made a change in existing practice to the extent of permitting final judgment, from which appeal may be taken, to be entered at any stage of a proceeding "upon a determination of issues material to a particular claim and all counterclaims arising out of the transaction or occurrence which is the subject matter of the claim." Reeves v. Beardall, 316 U.S. 283, 62 S.Ct. 1085, 1087, 86 L.Ed. 1478; Bowles v. Commercial Casualty Ins. Co. supra; Collins v. Metro-Goldwyn Pictures Corporation, 2 Cir., 106 F.2d 83. It is clear, however, that for a judgment which does not determine all of the issues involved in an action to be final and appealable under the rule, it must make a final determination and disposition of a claim which is "entirely distinct" from other claims involved. "The Rules make it clear that it is `differing occurrences or transactions, which form the basis of separate units of judicial action.' Atwater v. North American Coal Corporation, 2 Cir., 111 F.2d...