Case ID: la_160/html/0391-01.html
Source: Caselaw Access Project
Author: {"author": "DAWKINS, J. LAND, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

(107 So. 236)
    No. 25292.
    NEW ORLEANS SILICA BRICK CO. v. JOHN THATCHER & SON.
    (Nov. 27, 1922.
    On the Merits, Jan. 4, 1926. Rehearing Denied Peb. 1, 1926.)
    
      (Syllabus by Editorial Staff.)
    
    1. Courts <&wkey;224(9)—Supreme Court has jurisdiction of appeal in action brought by materialman against contractor finishing contract of defaulting subcontractor, with claim by surety that materialman had agreed to look to credit of subcontractor.
    Action for material furnished contractor who completed contract of subcontractor after default, with garnishment against owner on funds due under contract, wherein surety claimed that seller had agreed to look to credit of subcontractor for materials, held to present real issue for lower court to pass upon, giving Supreme Court jurisdiction on appeal under Const. 1921, art. 7, § 10, and Const. 1913, art. 85, in view of amount involved.
    On the Merits.
    2. Parties &wkey;>40(2)—Surety who had suffered no loss at time of fifing intervention in action by materialman against contractor finishing contract of defaulting subcontractor held without right or remedy.
    Where materialman brought action against contractor for materials furnished him in completing contract o'f defaulting subcontractor, surety, who intervened claiming that material-man had agreed to look to subcontractor for debt and asked that money due on contract should be paid to other creditors, held to be without right or remedy as having suffered no loss at date of filing intervention.
    3. Judgment <&wkey;252(3)—Surety claiming breaches of certain parts of agreement of ma- • terialman at time of executing bond for subcontractor without asking judgment for damages held not entitled to relief.
    Surety, who in intervention to action by materialman against contractor for materials furnislied Mm on fimshing contract of defaulting subcontractor claimed breaches of certain parts of agreement filed with surety at time of executing bond, without seeking judgment for damages, held not entitled to relief.
    Appeal from Civil District Court, Parish of Orleans; Porter Parker, Judge.
    Action by the New Orleans Silica Brick Company against John Thatcher & Son, wherein the Globe Indemnity Company was also made respondent. From a judgment for plaintiff, the Globe Indemnity Company appeals, and plaintiff moves to dismiss the appeal.
    Motion to dismiss denied and judgment affirmed.
    Monroe & Lemann and Walter J. Suthon, Jr., all of New Orleans, for appellant Globe Indemnity Co.
    P. M. Milner and Delvaille H. Théard, both of New Orleans, for appellee.
   On Motion to Dismiss.

DAWKINS, J.

Plaintiff sued defendant on open account in the sum of $2,430.80, for building material furnished in the "construction of the new Elks Home in this city. It alleged that said materials were furnished under verbal contract “for completing a contract which defendant has with W. T. Carey & Co., and which the defendant had declared defaulted, at the same prices which plaintiff was furnishing said W. T. Carey & Co.”

Averring that defendant was an absentee, it made the Elks Lodge a party garnishee under writ of attachment, for the purpose of seizing whatever funds there might be in its hands due under the contract for erecting the building- .

Defendant answered, admitting that it was indebted to plaintiff in the sum claimed, but denied that it had declared Carey & Co.’s contract forfeited; that said Carey & Co. had notified it that they could not complete the contract and suggested defendant take whatever action might be necessary to protect its (defendant’s) interest; that the reason it had not paid said amount was that the Globe Indemnity Company had warned it not to pay said amount for reasons later set forth, and of which plaintiff was fully aware. Further, that it had entered into the contract with W. T. Carey & Co., referred to in plaintiff’s petition, which amounted to in excess of $25,-000, and that Carey. & Co. had furnished bond, as required by law, for one-half the amount of said contract with the Globe Indemnity Company, as surety; that it (defendant) had notified said surety of its principal’s failure to complete said work, and the surety also declined to complete the contract; that thereupon defendant proceeded to complete it at the charge and risk of said Carey & Co. and its said surety. Further, that after the materials sued for by plaintiff were purchased, the Globe Indemnity Company informed defendant that previous to going surety for Carey & Co. on said contract plaintiff herein had agreed to advance Carey & Co. $1,500 to be used for meeting pay rolls, and further to furnish it all of the material needed in the execution of said contract, and to waive and not file any lien of any kind against the building; that plaintiff failed to comply with said contract in several particulars, among others that it had failed to furnish Carey & Co. with the lumber necessary, and that it had been furnished by another dealer to an amount exceeding $3,-000. ' And that said surety had further informed defendant that if it paid the sum admitted to be due to plaintiff, the same would be considered by the surety as releasing it from the bond, and that the amount sued for herein should be paid to the Globe Indemnity Company, all of which facts were fully known to plaintiff before it filed this suit.

Defendant therefore averred that finding itself confronted with the claims of two persons to said fund, and being in danger of having to pay twice, if it paid the wrong party, it deposited the money in the registry of the court for the benefit of whoever it might be held to belong. It prayed that the Globe Indemnity Company be made a party and cited and served with a copy of the original petition and answer in order that the court might determine the issue as between it and the plaintiff.

The Globe Indemnity Company appeared in answer to this service and citation, and averred the facts with reference to its becoming surety .substantially as alleged by defendant, and annexed to its answer a letter addressed to it by plaintiff in which the latter stated it would furnish all of said mate-, rial to Carey & Co., solely upon the latter’s credit responsibility, and that it waived any lien or privilege whatsoever against the building, or action- against the Globe Indemnity Company, as well as for a loan of $1,500 made to Carey & Co., presumably for the execution of said' contract; and but for said agreement, respondent would never have become surety on said bond; that in these circumstances respondent was entitled to have said funds applied to the payment of the othér claims for which it was liable on the bond, and of which it avers there are a large number unpaid, among them being one already filed by W. W. Carre & Co. for $3,-152.84; that if plaintiff were paid the sum which is claimed herein, there would not be sufficient funds to meet the claims of other lienholders.

Respondent prayed that the demands of plaintiff be rejected, and that it be declared not entitled to be paid anything for said materials for the completion of the subcontract of Carey & Co. “until payment of all other claims for which petitioner (respondent) may be responsible on its bond and relegating” plaintiff “to a claim upon the personal credit” of Carey •& Co. Further that there be judgment directing that the funds in the hands of the court be applied to all claims for labor and materials furnished upon said subcontract.

There was judgment for plaintiff as claimed, and the Globe Indemnity Company appealed. Plaintiff has moved to dismiss upon the ground that appellant has not claimed the fund or asked for any moneyed judgment in its favor.

We think the above statement of the case sufficiently discloses that there is a real issue between plaintiff and the appellant over the disposition of the fund to give this court jurisdiction. , It is true. that appellant does not ask that it be paid the money, but it does, in effect, pray that it be held and applied upon the claims for which it is responsible, and plaintiff declared not entitled to receive same under the agreement by which it induced appellant to become surety upon Carey & Co.’s bond. Whatever the merits of the case may be, it was one which the lower court had to and did pass upon, and in view of the amount involved or fund to be distributed, we have jurisdiction. Article 7, § 10, Const. 1921; article 85, Const. 1913.

The motion is therefore denied.

On the Merits.

LAND, J.

On March 13, 1917, defendant, a corporation organized under the laws of the state of New York, entered into a contract with the Benevolent Association of Elks of the City of New Orleans for the erection of certain buildings and equipment for the sum of $285,285.

Walter T. Carey, operating under the name of W. T. Carey & Co., desiring to obtain a subcontract from Thatcher & Son, the general contractor, was required by the latter to execute a bond in its favor for the payment of all workmen and furnishers of materials to be used for the completion of said subcontract, which was for an amount in excess of $25,000.

The intervener, the Globe Indemnity Company, signed the bond of W. T. Carey & Co. as surety for one-half of the amount of said subcontract, upon the faith of the following agreement, confected in the form of a letter addressed to the Globe Indemnity Company by plaintiff, the New Orleans Silica Brick Company:

“New Orleans, La. March 15, 1917.
“Globe Indemnity Company, Wm. H. Kline-smith, Manager, New Orleans, Louisiana— Gentlemen: We have agreed to furnish Walter T. Carey & Co. for the concrete work on the Elks Home and Power House contract, dated the twelfth (12th) day of March, 1917, all necessary materials which Walter T. Carey & Co. order from us, at prices agreed on.
“We agree that time is part consideration and to furnish the material as required by the progress of the work and to protect the said Walter T. Carey & Co. from delays caused by failure on our part to deliver such material on time.
“We agree to sell and furnish this material on the credit responsibility of Walter T. Carey & Go. alone and waive any lien or privileges whatsoever against the said building, or action against the Globe Indemnity Company, as surety, which the law may confer on us.
“We also agree to waive any claim whatsoever against the said Globe indemnity Company, for an amount of $1,500 (fifteen hundred and 00/100 dollars) loan to Walter T. Carey & Co. under this contract.
“[Signed] New Orleans Silica Brick Company, “By James H. Dyett, Pres.
“C. F. Labarre, Secty.
“Prank Bowers, Tres.”

W. T. Carey & Co. having failed to complete the subcontract, and having notified John Thatcher & Son, the general contractor, to take whatever action might be necessary to protect its interests, defendant advised the Globe Indemnity Company as surety of the default of the subcontractor, and, said surety having declined, to complete said contract for account of said subcontractor, defendant was compelled to do so.

On or about December 17, 1917, plaintiff entered into a verbal contract to supply defendant with cement, sand, and gravel, in such quantities as defendant should require, for the completion of the subcontract of Walter T. Carey & Co.

On February 1, 1918, plaintiff attached the defendant, on the ground that it was a nonresident, for the sum of $2,430.80, the amount alleged to be due under the verbal contract of December 17,1917, for materials furnished to finish subcontract of Walter T. Carey & Co.

Defendant, John Thatcher & Son, admits in its answer that it is indebted to plaintiff, the New Orleans Silica Brick Company, in the sum sued for, to wit, $2,430.80, but deposited said sum in open court, alleging that defendant found itself confronted by the claims and demands of two parties to the amount herein sued for, to wit, the New Orleans Silica Brick Company and the Globe Indemnity Company.

After reciting, from its viewpoint, the alleged claims of the Globe Indemnity Company to the fund deposited, defendant prayed that said company be cited and made a party to- this suit, which accordingly was done.

The Globe Indemnity Company made itself a party to the present litigation, by filing what it terms an “answer,” in which it prays:

“That the claim of the New Orleans Silica Brick Company in the present proceeding be rejected at its cost, and that there be judgment recognizing and declaring that, under the agreement of March 15, 1917, the New Orleans Silica Brick Company is not entitled to be paid any sum for concrete material delivered for the completion of the subcontract of Walter T. Carey & Co., until payment of all other claims for which petitioner may be responsible on its bond; and relegating said New Orleans Silica Brick Company to a claim upon the personal credit and responsibility of Walter T. Carey & Co., to which, alone, it undertook and agreed to look. Petitioner further prays that there be judgment directing that the sum of $2,430.80 deposited by John Thatcher & Son in the registry of the court in this proceeding be applied to the payment of all labor and all claims of materialmen (other than New Orleans Silica Brick Company) upon the subcontract of Walter T. Carey & Co., for which petitioner would otherwise be responsible on its bond. And petitioner further prays for all general and equitable relief and for such further orders as the nature of the ease may require or law or equity make proper.”

Tie Globe Indemnity Company in its. answer or intervention takes the position that tbe agreement of March 15, 1917, is an indemnity contract protecting said company as surety against all loss or liability whatever, whether arising from any claim of the New Orleans Silica Brick Company, or of any third person, and, in addition to this, that said agreement requires, said company not to assert as against Walter T. Carey & Co., or against the defendant, John Thatcher & Son, any claim for payment of material furnished, to the prejudice of said surety company. In other words, the Globe Indemnity Company asserts that the agreement in question assured said company that the price to be paid Walter T. Carey & Go. upon its subcontract would be available for the payment of all laborers and furnishers of material (other than the New Orleans Silica Brick Company) to whom the said Carey & Co- might become indebted in the course of the performance of said subcontract. Even if the agreement in question can be legally construed as an indemnity contract, the surety company could not possibly claim the fund deposited in court in this case, or exercise the right to have it dedicated to the payment of any third person, for the simple reason that said company does not pretend that it has paid one farthing to any one with a claim or lien on the Elks building.

Having suffered no loss at all, at the date of the filing of its answer or intervention, it is without right or remedy, as far as the payment to plaintiff by defendant is concerned. As a matter of fact, the Globe Indemnity Company does not pray fox“ any affirmative relief, but seeks to allocate the fund deposited in court to the payment of claims or liens which it may'have to satisfy in the future as surety.

While the Globe Indemnity Company charges in its answer or'intervention breaches of certain parts of this agreement, yet it seeks no judgment for damages in this case. As was said by this court in Railroad Co. v. Construction Co., 49 La. Ann. 49, 21 So. 171:

“Thére is no prayer for a money judgment against defendants; no demand for the ownership or the possession of any property, nor is there any demand for any writ by which petitioner’s rights could be preserved, or any demand for the issuing of an injunction by which the wrongs complained of could be prevented. There are serious grievances and complaints, but no redress prayed for. We have ordinances of the city of New Orleans, and contracts thereon submitted to us, in which rights of plaintiff and the defendant company apparently conflict; and we are ashed to decree that the defendant -abstain from asserting a right claimed by it under its contract. Our decree, if the prayer were granted, would be simply that the plaintiff corporation is right in its interpretation of the ordinances of the city in its favor, and its contracts thex-eunder. We would thus intex’prct and construe a contract, without the power to enforce our decree, unaided by a restraining order. The suit is in its nature hypothetical; the submission to us of an abstract proposition. We do not mean to say that the complaints are not sex-ious. They are of sufficient gravity to warrant a suit in the proper procedure.”

Judgment was rendered in tbe court below in favor of plaintiff and tbe intervention of tbe Globe Indemnity Company was dismissed. In our opinion, tbe judgment is correct.

Judgment affirmed.