Wiley N. Jackson Co. v. City of Norfolk

• Decision Date: 13 June 1955
• Docket Number: No. 4372,4372
• Citation: 197 Va. 62,87 S.E.2d 781
• Court: Virginia Supreme Court
• Parties: WILEY N. JACKSON COMPANY, INC., AND THE FIDELITY AND CASUALTY COMPANY OF NEW YORK v. CITY OF NORFOLK. Record

Page 781

87 S.E.2d 781

197 Va. 62

WILEY N. JACKSON COMPANY, INC., AND THE FIDELITY AND CASUALTY COMPANY OF NEW YORK v. CITY OF NORFOLK.

Record No. 4372.

Supreme Court of Appeals of Virginia

June 13, 1955.

Williams, Cocke, Worrell & Kelly and Jack E. Greer, for the appellants.

Leonard H. Davis and Joseph E. Baker, for the appellee.

JUDGE: SMITH

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

This suit was instituted by Wiley N. Jackson Company, Incorporated, against the City of Norfolk seeking contribution for one half of the sums paid under a compromise settlement made by Jackson with certain land owners who claimed damages for injury to two buildings adjacent to certain construction work performed by Jackson. Jackson's surety, The Fidelity and Casualty Company of New York, which actually paid the settlement money, was made a party complainant by order of court and the suit proceeded in its and Jackson's names.

The cause was heard on the pleadings, exhibits and argument of counsel, the court dismissing the bill on the ground that the complainants, Jackson and Fidelity, were not entitled to contribution from the City. Thereafter this appeal was awarded complainants.

The pleadings and exhibits show that on July 15, 1949, a contract was entered into by the Commonwealth of Virginia, acting by and through the State Highway Commissioner, the City of Norfolk and the Norfolk and Western Railway, by which the parties agreed to undertake the construction of an underpass in the City and thereby eliminate a grade crossing of the Railway at Monticello Avenue, which at this point is part of State Highway No. 170.

This tri-party contract recites the motivating cause for the agreement and requires that each of the contracting parties perform some specific undertaking toward the completion of the project. The first provision of this agreement is in part as follows: '(1) That the construction of said 'Project' in accordance with said plans is hereby undertaken by said parties, each agreeing to pay one-third of the total cost thereof, including, among other things, cost of acquiring and clearing lands or rights of way and property damage incident to the construction of the 'Project' and costs of plans, engineering and supervision, * * *.' Other undertakings of the parties pertinent to this suit are as follows:

'I. Undertakings of the State.

'The State will:

'(a) Let to contract and supervise the performance of all labor and the furnishing of all materials for such of the work shown on said plans as is included in Estimate A attached to and made a part hereof:

* * *

'(c) Require of its contractor or contractors its Standard Performance Bond and insurance of the following kinds and amounts:

'For the Protection of the State, the City and the Railway.

'1. Contractors' Public Liability and Property Damage Insurance -- Limits $50,000 and $100,000 public liability; $25,000 and $50,000 property damage.

'2. Contractors' Protective Public Liability and Property Damage Liability Insurance -- Limits $50,000 and $100,000 public liability; $25,000 and $50,000 property damage.'

'II. Undertakings of the City.

* * *

'(d) Acquire and clear all lands and rights of way that may be required for the construction of the 'Project' and pay all damages to the property of adjoining or adjacent owners that may be caused by or incident to the execution of the 'Project', as distinguished from negligence in the performance of the work, it being understood that there shall be no obligation upon the State or the Railway to commence any of their undertakings until the City shall have acquired such lands and rights of way.'

In addition to these undertakings each of the parties agreed to 'discharge from time to time as due all costs and expenses incident to its undertakings and, as soon as practicable after the end of any month in which costs or expenses are incurred by it,' render to the other parties a statement thereof. And in furtherance of this provision the following was agreed to:

'IV. Provision for Payment and Audit and Discharge of Possible Liability not Specifically Above Mentioned.

'(a) Upon receipt by the City and the Railway of the statement from the State pursuant to I-(d) supra, each will promptly pay to the State one-third of its total costs and expenses shown thereon. Similarly, upon receipt by the Railway and the State of the statement from the City pursuant to II-(i) supra, each will promptly pay to the City one-third of its total costs and expenses shown thereon, and upon receipt by the City and the State of the statement from the Railway pursuant to III-(c) supra, each will promptly pay to the Railway one-third of its total costs and expenses shown thereon.

'(b) Upon completion of the 'Project', the State will render to the City and the Railway, the City will render to the Railway and the State, and the Railway will render to the State and the City, a complete detailed statement of all their costs and expenses, and within a period of three months thereafter each party shall be entitled to audit same and the original accounts and records of the others, for the purpose of checking and correcting mistakes or errors; and if any are found, additional payment or restitution, as the case may be, will be accordingly made; and

'(c) In the event that either the State, the City or the Railway are, as the result of negligence in the performance of their undertakings, subject to any liability, the amount of such liability shall, unless discharged by insurance or by the contractors of the parties, be treated as part of the cost of the 'Project,' and each of the other parties shall reimburse them, as the case may be, for one-third thereof.'

On June 8, 1950, almost a year after the execution of the tri-party agreement, the Commonwealth, in compliance with its obligation under that agreement, entered into a contract with Jackson for the construction of the underpass. The pertinent provisions of this contract are as follows:

'Contractor shall assume full responsibility for design and safety of all shoring under walls of adjacent buildings and repair or pay for all damage done.'

'The Contractor shall indemnify and save harmless the State, the Commission and all of its officers, agents and employees from all suits, actions or claims of any character, name and description brought for, or on account of any injuries or damages received or sustained by any person, persons or property by or from the said Contractor or by or in consequence of any neglect in safeguarding the work, or through the use of unacceptable materials in the construction of the improvement, or by or on account of any act or omission, neglect or misconduct of the said Contractor * * *.'

Contemporaneously, Jackson and Fidelity executed a bond payable to the Commonwealth, the stated purpose of which was to 'save harmless' the Commonwealth. Thereafter Jackson undertook the construction, during the course of which buildings adjacent to the site, owned by one Margolius and others, were...