21 Ga. App. 758 | Ga. Ct. App. | 1918
Lead Opinion
The Savannah Lighting Company entered into a written contract with Lightman, McDonald & Company, under which the latter were to build “additions to power station and substation” of the former. A bond for the faithful performance of the contract was'given to the owner by the contractors, with the Fidelity and Deposit Company of Maryland as surety. The owner contended that the contractors violated certain conditions of the contract, and it brought suit against the surety company, on the bond. A demurrer to the petition was sustained, and the plaintiff excepted.
1. The contract between the owner and the contractor is, by the express terms of the bond, made a part thereof, and both instruments must be construed together. Thus construing them; the surety company is liable to suit under each of at least two conditions : the one upon cancellation of the contract under the stipulations thereof hereinafter set out, — the cancellation to be upon the initiative of the owner; the other, the abandonment of the contract, — which! would be the voluntary act of the contractors. The demurrer which was sustained was as follows: “1st. The petition as amended is not sufficient in law. 2d. The petition as amended fails to show that the notices of October 1 and October 8 were given, upon the judgment of the engineers, as required by the contract. 3d. The petition as amended fails to show that any
In the event of cancellation the provision applicable is as follows: ‘‘The contractor further agrees that in the event of the annulment of this contract, as above provided, the owner shall have the right to enter upon the premises and take possession, for the purpose of completing the work under this contract, of all materials, tools, and appliances thereon belonging to the contractor, and to employ any other person or persons to finish the work herein provided for, and to provide all the materials necessary therefor. TJpon such notice of cancellation being given, all payments to the contractor under this contract shall cease, and all moneys due or to become due the contractor shall be retained by the owner until final completion and acceptance of the work. The cost of all labor, machinery, and materials provided by the
Having before us the above, let us consider, first the conditions upon which the contract may be cancelled.as stated in the contract, in connection with the notices given, the petition, and ground 2 of the demurrer. This portion of the contract is as follows: “The contractor further agrees: that should he fail to at any time provide a sufficiency of competent workmen, machinery, or materials; or that should the progress of this work at any time-be such as would result in his failure to complete the work upon the. daté herein agreed upon, of which conditions, the engineers are to be the judge, the owner shall have the right to require, by written notice, the contractor to, • at his own expense, employ such additional labor, machinery, or material as the engineers may direct to be put upon the work. The contractor .further agrees that should he fail to providé a sufficiency of labor; machinery, or proper materials within five days of such notice, or should he fail to remove rejected materials or objectionable employees, as here
The owner, evidently acting upon these provisions, sought to cancel .the contract; for on October 1, 1914, he wrote to the contractors and sent a copy of his letter to the surety company, and in this letter said: “We enclose therewith a copy of letter of even date received from the Scofield Engineering Company, our consulting engineers . . . This letter also certifies as to the extension in time allowed account of delays for which you were not responsible and because of these additions. This will confirm the instructions given you by them, . . and the extension in time stated in their letter. No work on your contract having been done since September 31, please take notice that unless you .or your surety shall within five days from date hereof resume work with such labor, equipment, and material as to, in the judgment of the engineers, insure completion within the time now granted you, your contract shall become cancelled, and we shall, take possession for the purpose of completing the work as provided in the contract.” On October 8, 1914, the owner gave to the contractors and the surety company another notice, as follows: “In accordance with the provisions of your contract for additions to our main and sub-stations, dated May 31, 1914, we hereby cancel the same by reason of the failure to resume work, as notified you on October 1st, 1914, and have taken possession of work, for the purpose of building the same on your account.” It will be noticed that neither of these letters or notices contained any statement that this action is taken upon the advice, opinion, or certificate of the engineers. For this reason i-t is insisted by defendant that these notices are insufficient to authorize a cancellation of the contract, — that under them the owner had no right to cangel the-contract and take charge of the work and complete it.
"Wheredthere is such a contract and bond as in the instant case, the contract can not be cáncelled by the owner unless the cancellation is based upon some action or notice in reference thereto by
We must keep .in mind the fact that this suit is against the surety company, and that “The sureties on the bond given for the performance of a building contract by the contractor are bound only by the express terms of their contract, and have a right to stand upon its precise terms.” Tally v. Parsons, 131 Cal. 516 (63 Pac. 833). From what is said above we reach the following conclusions: (a) The notices 'given by the owner to the contractors and surety company on October 1st and October 8th were given to cancel the contract- under the provisions thereof, showing that the owner then considered the contract as subsisting and not
2. Was it necessary for the plaintiff to give to the surety any notice of the abandonment of the work.by the contractors? The bond provides as follows: “Now, therefore, the conditions of this obligation is such, that if t the said principals shall faithfully perform said contract on their part, according to the terms, covenants, and conditions thereof (except as hereinafter provided), then this obligation shall be void; otherwise to remain in full force and effect. This bond is executed by the surety upon the following express conditions, which shall be conditions precedent to the right of the owner to recover hereunder: The owner shall keep, do, and perform each and every, all and singular, the matters and things set forth and- specified in said contract, to be by the owner, kept, done, and performed exclusively at the times and in the manner as in said contract specified. The said surety shall be notified in writing of any act on the part of the said principals, or their agents or employees, which may involve a loss for which the said surety is responsible hereunder, immediately after the occurrence of such- act shall have come to the knowledge of said owner, or to any representative duly authorized to oversee the performance of said contract; and a registered letter, mailed to the president of said surety, at its principal office in Baltimore City, Maryland, shall be the notice required within the meaning of this bond.” Clearly the act of abandonment, leaving the building in' an unfinished state, with the probability of involving the surety in a lawsuit, is an act on the part of the contractors “which may involve a loss for which the surety is responsible.” Therefore notice to the surety of abandonment is essential to recovery, for this notice is provided for in the bond under the clause, “The
The plaintiff insists that no such notice is necessary, and cites the case of Smith v. Jewell, 104 Md. 269 (65 Atl. 6). "While it was there held that the contract under consideration by the court did not contemplate abandonment by the contractor, and did not fall within that provision 'of the contract which refers to the certificate of the engineer, and the bond, so far as the record shows, contained no provision requiring notice in case of abandonment, yet the fact is that- the owner actually gave the surety written notice, stating that the contractor had abandoned the work and that the owner would hold the surety financially responsible for losses, delays, or other expenses connected with the failure of the contractor to abide by the terms of the contract, and the court held the surety liable because of the notice given to it. By reference to the statement of facts contained in the Jewell case it will be seen that on May 8 the owners sent a written notice to Jewell that, as he had refused to furnish the necessary labor to prosecute the work, and had notified plaintiffs of his intention to abandon it, they should proceed on Friday, May 15, at 8 a. nr., to provide the necessary labor therefor, at the cost of the contractor. On May 12 the owners sent to the surety company a copy of that notice, adding that as Jewell had failed to comply with his said contract, they would proceed to complete said work at his expense, holding the surety company on its bond. On May 13 a second written notice was sent to the surety company by the owners, stating that Jewell had abandoned the work, and that they would hold the surety financially responsible for any loss, etc., connected with the contractor’s failure to abide by the terms of said contract. In the case at bar no notice of abandonment was given by the owner to the surety company. In the ease of Collins Co. v. Georgia Hotel Co., 142 Ga. 703, 709 (83 S. E. 660), it is stated that “The petition alleged that the contractor did not comply with the contract in the respects thus dealt with, but abandoned the work, that the
Counsel for the plaintiff in error cite also the case of Heidbrink v. Schaffner, 147 Mo. App. 632 (127 S. W. 418). An examination of the bond given in that case will show that it made no provision for notice to the surety in the event of abandonment; and, so far as the report of the case shows, there is no such provision in the contract. On the contrary, the bond contained a provision that the signers thereof acknowledged themselves “to be bound unconditionally for the faithful performance of said contract.” In the opinion in that case the statement is made that “it is plain the contingency of abandonment by the contractor was not provided against.” In the instant case abandonment wás provided against by the express terms of the bond, and, under the provisions of the bond, when the contract was abandoned the surety had the option to “assume the said contract and to sublet or complete the same,” and, if assumed and duly performed, “any reserve, deferred payments, and all other moneys provided by said contract to be paid to the principals shall be paid to the surety.” This is a valuable right, and to deprive the surety of the above option and this right without notice would be in direct and absolute violation of the terms of the bond. The plaintiff having absolutely failed to give any notice of “abandonment,” we hold that the third ground of the demurrer is good.
3. As shown above, the plaintiff gave notice of cancellation only, and in his original petition planted his case squarely upon the ground of cancellation. Neither in the petition nor in the amendment of January 4, 1916, did the plaintiff make any reference to “abandonment,” and we. hear nothing of abandonment until the term at which the case was tried. The notices and pleading relied upon to show abandonment utterly fail in this respect, and refer only to cancellation. Attention is directed to the fact that the letter of October 1 puts the contractors and the surety on notice that the time has been extended for completing the work, and also notified them that, unless certain things named in the letter were done within five days, “your contract shall become cancelled, and we shall take possession for the purpose of completing the work as provided in the contract.” This letter plainly shows that the plaintiff had no reference to an abandonment of the contract, for
This shows that the plaintiff considered the letters as referring to cancellation, and not abandonment, and it so treated them in preparing the petition. Note also that the letter of October 8 says: “In accordance with the provisions of your contract, . . we hereby cancel the same, . . and have taken possession of work for the purpose of building the same on your account.” This the owner had the absolute right to do under the contract, if it was legally cancelled, but if the contract was abandoned, the owner had no such right until after the surety had exercised its option “to assume the said contract and to. sublet or complete the same.”
Though counsel for the plaintiff in error earnestly insist that the petition as originally drawn based the right of recovery upon the abandonment of the contract by the contractors, the petition itself will not support this contention, and the court will look to the petition in its entirety, including the letters of October -1 and October 8, which are a part thereof, to determine its nature. Under a well-recognized principle* the petition will be construed most strongly against the party in whose favor it is drawn. We think the petition clearly shows that it is based upon an attempted cancellation of the contract by the owner in pursuance of and in accordance with the provisions of the contract, and not upon abandonment by the contractor, as provided in the bond. Having elected thus to proceed and having failed to give any notice of abandonment, and the petition failing to show any such notice, we think the petition fails to set out a cause of action, and that the demurrer was properly sustained.
Judgment affirmed.
Dissenting Opinion
dissenting. To the original petition the defendant demurred in writing, on the ground that it was insufficient in law, and, after the judge had announced that he would sustain the demurrer, the plaintiff amended the petition. The defendant then demurred orally upon the following grounds: (1) The petition as amended is not sufficient in law. (2) The petition as amended fails to show that the notices of October 1 and October 8 were
' Did the petition as amended fail to set out a cause of action, in that it failed to show that the notices of October 1 and October 8 were given upon the judgment' of the engineers? In passing upon this question it will be necessary to consider certain clauses of the contract between the owner and the contractors, as follows:
“The contractor further agrees: that should he fail to at any time provide a sufficiency of competent workmen, machinery, or materials, or that should the progress of this work at any time be such as would result in his failure to complete the work upon the date herein agreed upon, of which conditions the engineers are to be the judge, the owner shall have the right to require, by written 'notice, the contractor to, at his own expense, employ such additional labor, machinery, or material as the engineers may direct to be put upon the work.
“The contractor further agrees that should he fail to provide a sufficiency of labor, machinery, or proper materials within five days of such notice, or should he fail to remove rejected materials or objectionable employees, as hereinafter provided, or should he fail to comply with any other requirements of this agreement, the owner shall have the right, after five days written notice, to cancel this contract.
“The contractor further agrees that in the event of the annulment of this contract, as above provided, the owner shall have the right to enter upon the premises and take possession, for the purpose of completing the work under this contract, of all materials,*769 tools, and appliances thereon belonging to the contractor, and to employ any other person or persons to finish the work herein provided for, and to provide all the materials necessary therefor.”
It is well to keep in .mind that the plaintiff amended his petition by alleging that “on the 21st day of September the principals, Lightman, McDonald & Co., wrongfully abandoned the said contract and the work thereon, and wrongfully refused to proceed with said contract or to continue work thereon, and wrongfully abandoned the premises of petitioner on which they were working, and thus made it necessary for your petitioner to take charge of and complete the work, which your petitioner did do.” No exception was taken by the defendants to the allowance of the amendment, and therefore the pleading stands before the court as amended, and the question is whether the demurrer to the petition as amended should have been sustained upon either of the three grounds of the oral demurrer. The clause of the contract upon which the defendant relies does not attempt to deal with abandonment of the work by the contractor. In fact, in the contract between the owner and the contractor- there is no provision dealing with the question of abandonment. The clause upon which the defendant relies, in contending that the judgment of the engineers should have been obtained before the notices were spnt, provides that the contractor agrees that “should he fail to at any time provide a sufficiency of competent workmen, machinery, or materials, or . . should the progress of this work at any time be such as would result'in his failure to complete the work upon the date herein agreed upon, of which conditions the engineers are to be the judge, the owner shall have the right to require, by written notice, the contractor to, at his own expense, employ such additional labor, machinery, or material as the engineers may direct to be put upon the work.” A fair construction of this clause means that the judgment of the engineers shall be invoked when, in the opinion of the owner, there is an insufficiency of competent workmen, machinery, or materials, or the progress of the work at any time would result in the failure of. the contractor to complete it within the date agreed upon. It evidently contemplates that the work is in progress, that the contractors are still at work upon the job, and if the owner thinks that they are making insufficient progress, then he may request the judgment of the engineers, and
In the case of Smith v. Jewell, 104 Md. 269 (65 Atl. 6), the contract provided that if the contractor should fail to supply a sufficiency of skilled workmen, or fail in the performance of any of his agreements, the owner might, on receiving a certificate of the architect to that effect, provide labor and deduct the cost thereof, and if the architect should certify that the contractor’s failure was sufficient ground for such action, the owner might terminate the employment and complete the work at the expense of the contractor. The court held that this language did not apply to the abandonment of the contract by the contractor, and that on the contractor, voluntarily and without excuse, abandoning the work, whether nearly completed or not, the owner, on giving notice to him and his surety of his purpose to complete the work, was entitled to recover from them the difference between the reasonable cost of completing the work and the balance of the unpaid contract price, without securing the architect’s certificate called for in the contract. See also Fuller v. Doyle, El Paso &c. R. Co. v. Eichel, and Dorn v. Ebbesen, supra. In Mallard v. Moody, 105 Ga. 400, 404 (31 S. E. 47), it was said: “It is usual to constitute the engineer a referee as to the meaning of the plans and specifications which are his own invention and handiwork, a certain construction of which is necessary to the proper erection and completion of the work. His powers cannot be enlarged by implication, but they will be confined strictly within the terms of the contract.”
The original petition practically charges an abandonment of the work by the contractors. It alleges that the “principals, wrong
We come now to the second proposition: The third ground of the oral demurrer is that the petition failed to show that any notice was given to the surety of the plaintiff’s contention that the contractors had abandoned the contract, as required by the condition in the bond that the surety “shall be notified in writing of any act on the part of the said principals, or their agents or employees, which may involve a loss for which the said surety is responsible/’ etc. The notices have already been referred to. They were given on October 1 and October 8. The letter of October 1 was mailed to the contractor, and a copy of it also mailed to the surety company, by registered mail. This letter addressed to the contractor said: “No work.on your contract having been done since September 21, please take notice that unless you or your surety shall within five days from date hereof resume work with such labor, equipment, and material as to, in the judgment of the engineers, insure completion within the time now granted you, your contract shall become cancelled, and we shall take possession for the purpose of completing the work as provided in the con
