100 Wash. 289 | Wash. | 1918
November 30, 1915, A. ft. Eichler entered into a contract with the city of Aberdeen for certain repair work on the A. J. West bridge belonging to the city, the agreed price for the work being $4,548.91. The contract contained no provision for the retention by the city of any reserve percentage or balance to insure performance of the work by the contractor, and was silent as to the payment of claims for labor, material and supplies furnished the contractor, it merely providing for the payment to the contractor of the full contract price in current expense fund warrants upon completion and acceptance of the work, the provision in that regard being as follows:
On February 9, 1916, A. R. Eichler entered into a second contract with the city of Aberdeen for further repairs tó be made on the same bridge, the agreed price of this work being $13,771.87. As in the case of the former contract, the agreement contained no provision for withholding any reserve percentage-or balance, and contained precisely the same provision with respect to the payment of the contract price upon completion of the work as above stated with reference to the first contract. Each contract provided that the contractor should furnish a bond conditioned for the faithful performance of the contract and for the protection of all laborers, mechanics, subcontractors and materialmen, and all persons furnishing the contractor, or any of his subcontractors, labor, provisions and supplies for carrying on the work. Pursuant to this agreement, separate bonds in the form prescribed by statute in such cases were furnished by the contractor, upon which the Maryland Casualty Company became surety.
Upon securing the first contract, Eichler applied to respondent Hayes & Hayes, Bankers, for financial assistance, and an arrangement was made whereby the bank advanced funds to the contractor as needed in the prosecution of the work, the understanding being that the money so loaned should be used exclusively
Under its agreement with Eichler, the bank, between December 7, 1915, and April 14, 1916, advanced to Eichler the sum of $16,288.44, the items aggregating this amount being credited from time to time to his account, upon which checks were issued and honored for labor and material used in the work. The city accepted the work under the first contract as completed on May 10, 1916, and on May 12, 1916, warrants to the amount of $4,548.91, in payment therefor, were issued and delivered by the city to Hayes & Hayes, Bankers, by virtue of its assignment. On May 17, 1916, the city accepted as completed the work under the second contract, and on May 18, 1916, it issued and delivered to Hayes & Hayes, Bankers, warrants in the sum of $13,771.87 in payment therefor. All of these warrants were sold and assigned by the bank to various purchasers thereof prior to May 20, 1916, the proceeds being applied to the satisfaction of the contractor’s notes for advances, the payment of certain labor and material claims theretofore discounted by the bank, and the balance deposited to Eichler’s credit.
On July 10, 1916, the Independent Sand & Gravel Company, a corporation, and L. G. Humbarger began separate actions against the contractor and Maryland Casualty Company to obtain judgment for various
The written application for the bond, which contained the assignment relied upon by the casualty company, was no part of the bond, nor was it filed therewith; neither had the city or the bank any notice or knowledge of its existence until the commencement of the action on July 13, 1916.
On motion of Maryland Casualty Company, the three separate actions were consolidated for the purposes of
The contracts for the improvement were unusual and out of the ordinary, in this, that no provision was made for withholding any portion of the contract price to insure the payment of claims for labor or materials filed with the city; neither was there any covenant in the agreements on the part of the contractor to pay such claims, his obligation in this respect being merely to furnish a bond for that purpose. Moreover, no advances were to be made as the work progressed, the full amount becoming payable upon the completion and acceptance of the work. It is undisputed that the work was performed by the contractor in the manner provided by the contracts; therefore, upon the acceptance thereof, the city became unconditionally bound to deliver the warrants in payment therefor. There was no legal excuse for doing otherwise. Having no knowledge of the assignment to the casualty company, it was justified in delivering the warrants to the bank as directed by the contractor.
The casualty company, however, insists that the city was not warranted in making payment to the bank for the reason that certain claims for labor and material
In Dowling v. Seattle, 22 Wash. 592, 61 Pac. 709, the contract contained the following provision:
‘ ‘ The said contractor agrees to pay the wages of all persons and for assistance of every kind employed upon or about said work, and for all materials purchased therefor; and the city of Seattle may withhold any and all payments under this contract until satisfied that such wages, assistance, and materials have been fully paid for.”
It further provided that, on the 20th of each month, bonds were to be issued for seventy per cent of the contract price for work done during the preceding calendar month, as shown by the estimates returned by the city engineer, the remaining thirty per cent thereof to be retained by the city to secure the payment
“These assignments, being valid when made and assented to by the city, were not invalidated by the subsequent default of Forest. It is true that the city, by virtue of a provision of the agreement which we have hereinbefore noted, might have withheld all payments from the contractor until it was satisfied that all just claims for labor and materials had been fully paid; but it does not follow from that fact, as contended by the learned counsel for appellants, that it was obliged to do so, and that, having done otherwise, it should now be held to be a trustee of the laborers and material men, and, as such, liable to them directly for the amount of the fund assigned and of the bond delivered to the contractor. If these appellants had had a lien upon this fund, as they had upon the thirty per cent of the amount of the monthly estimates which was withheld by the city, there would be at least some ground for the claim that the city is their trustee. But, in the absence of such lien, this contention cannot be sustained.”
In Northwestern Nat. Bank of Bellingham v. Guardian Casualty & Guaranty Co., 93 Wash. 635, 161 Pac. 473, a case very similar in its facts to this case, the rule announced in the Bowling case was reaffirmed. In the course of the opinion, after referring to the case of Maryland Casualty Co. v. Washington Nat. Bank, 92 Wash. 497, 159 Pac. 689, Judge Ellis said:
‘ ‘ This is a distinct holding that it is only where there is a clear and express reservation in the contract of a fund to be held up for the benefit of laborers and ma
“In the case before us, the bank had taken assignments of all moneys to become due to the contractors as security for the notes, on which there remains a balance due of $2,300. These assignments were taken and filed with the city comptroller prior to any notice to any one that the labor and material claims had not been paid or would not be paid. The contract itself contained no provision for an absolute reserve of any percentage as security for labor and material claims. It contained nothing but a provision permitting the city to withhold payment until satisfied that all labor and material claims had been paid. Nothing, however, had been held up by the city at the time the. assignments were made. It follows that, under the rule in the Dowling case, the contractors’ assignments to the bank must be treated as a valid appropriation of the fund which was afterwards paid into court to the payment of the bank’s notes, including this balance of $2,-300, prior and superior to any right of laborers or materialmen, hence superior to any right of subrogation
“We find no merit in the claim that the bonding company has a superior equity in this fund over that of the bank. It has no equity in the fund as against the bank, which paid its money on the strength of assignments of the fund at a time when the contractors had full right to collect and dispose of the fund as they saw fit.”
It must be borne in mind that, under the terms of the contracts between Eichler and the city of Aberdeen, the city was not authorized to retain any portion of the agreed price, but was obligated to pay the full amount upon the completion and acceptance of the work, hence, there was no reserve balance which the contractor might not lawfully assign, or which constituted a trust fund for the benefit of the surety. The failure of the contractor to perform his contract according to its terms was the only ground upon which the city could refuse to issue and deliver the warrants. Upon the completion and acceptance of the work, its duty to pay became absolute. The judgment of the court, in dismissing the action as to the city treasurer and the city of Aberdeen, was clearly right.
This brings us to the question of whether the action was properly dismissed as to defendant Hayes & Hayes, Bankers. The plaintiff’s case as against this defendant was predicated upon the assumption that the warrants in question were in possession of the bank when the suit was commenced, and the relief sought was that the city be enjoined from paying the warrants and that the possession thereof be delivered to the plaintiff, no personal judgment being prayed for against the bank.
In the Gormley case, Judge Dunbar said:
“It is a rule of law, as old as the law itself, that a court cannot adjudicate the rights of parties who are not actually or constructively before it, with an op
Some contention is made by the casualty company that the amounts allowed various claimants were excessive, in that they contain items for the use of appliances where user was not proved, interest not prayed for,-and erroneously computed, and attorney’s fees on claims not chargeable to the surety. With respect to the rental charges for the use of scows, dredges, derricks, donkey engines, etc., we think the record sustains the conclusion of the trial court that these appliances were actually used in the work during the time for which allowance was made. It would unduly extend this opinion to enter upon a detailed discussion of the evidence relating to each item. The record discloses that interest was awarded the claimants on their several demands from a date thirty days subsequent to the completion and acceptance of the work. This was more favorable to appellant than the law warrants. We have held that interest is allowable upon claims filed under lien laws from the date of filing the lien notice. Siler Mill Co. v. Nelson Co., 94 Wash. 477, 162 Pac. 590; Brace & Hergert Mill Co. v. Burbank, 87 Wash. 356, 151 Pac. 803; Cornelius v. Wash
Regarding the allowance of attorney’s fees on the claims to which objection is made, the record shows that, by amendment, these canses of action were included in the action brought by plaintiff Humbarger as assignee, and that they were contested by the casualty company. We perceive no reason why the attorney’s fees should not be allowed. The case of Maryland Casualty Co. v. Washington Nat. Bank, 92 Wash. 497, 159 Pac. 689, relied upon by the appellant, is not in point. In that case, the action was commenced by the bonding company, and the claimants were impleaded for the purpose of having their demands paid. The validity and justness of the claims were admitted by the surety. In this case, the suit was by the claimants against the surety, which contested the claims throughout the litigation.
Finally, we come to a consideration of the appeals of N. Nelson & Son and Grays Harbor Construction Company. Each of these claimants filed a single notice against both bonds for an unsegregated amount. Upon the trial, N. Nelson & Son filed a disclaimer as to recovery against the bond given under the first contract, while Grays Harbor Construction Company filed its claim too late to fix liability against the first bond, but seeks to recover for items furnished upon the second contract. Judgment was rendered in favor of the claimants against the contractor, and the action was dismissed as to the surety.
In Carstens Packing Co. v. Empire State Surety Co.. 84 Wash. 545, 147 Pac. 36, we held a notice similar to
The judgment is in all respects affirmed.