Court Opinion

ID: 9712647
Source: CourtListenerOpinion
Date Created: 2023-08-26 04:57:51.98082+00
Date Added: 2024-06-11T18:23:13.506239
License: Public Domain

Souris, J.
(dissenting in part). I concur with Mr. Justice Kavanagh’s conclusion that defendant is entitled to indemnification from liability to its subcontractor’s creditors, but I cannot join in affirmance of the decree. That decree was based upon a finding by the chancellor that defendant was liable to certain creditors of Bedford Cement Floor Company by virtue of a payment bond he had filed pursuant to the provisions of PA 1905, No 187 (CL 1948, § 570.101 et seq. [Stat Ann 1953 Rev § 26.321 et seq.)), and, for that reason, should be indemnified from such liability before payment of the amount found due from defendant to plaintiff as Bedford’s receiver.
Section 2 of the act imposes certain requirements upon subcontractors and all others, excepting those furnishing labor, as conditions for invoking the security of the bond required by the act on certain public works projects such as was here involved. It requires that written notice of reliance upon the bond or that the contractor or subcontractor is indebted to them in a specified amount or for specified materials or supplies be filed with the city or governmental unit involved. The notice must be filed within 60 days after completion of the subcontract or after furnishing the last materials or supplies. Section 4 of the act limits prosecutions on the bond to 1 year after completion and acceptance of the project.
The chancellor entered a decree which, after finding defendant indebted to plaintiff in the amount of $15,033.09, required disbursement of over $14,000 to be made to certain of Bedford’s creditors in full payment of claims arising from its work on the project. The record of proceedings before the chancellor contained in the appendices filed here on appeal, discloses that there was no evidence offered to show *603compliance by any of Bedford’s creditors with the statutory requirements. In other words, the chancellor’s decree has the effect of indemnifying defendant against claims which might never arise.
The fact is that while this case was here on appeal defendant was granted leave by this Court to take additional testimony and the case was remanded for that purpose. On remand, the parties stipulated instead for the admission in evidence of certain court records indicating that 2 summary judgments were obtained against, and satisfied by, defendant in the total amount of $10,868.85 in favor of 2 of Bedford’s major creditors who apparently had filed the statutory notices and had instituted proceedings on the defendant’s bond within the time required by statute. Although the statutory notices apparently had been filed before hearing below, I find no evidence thereof in that hearing. Indeed, both suits on the bond were instituted and summary judgments granted while the chancellor had this matter under advisement, and it does not appear that the chancellor was advised thereof.
Under the circumstances, this case should be remanded for the opening of proofs to determine which of Bedford’s creditors had filed timely statutory notices or had instituted proceedings on defendant’s bond within the time allowed by statute. Since defendant’s liability is limited only to those of Bed-ford’s creditors who have perfected their statutory rights under .the bond, indemnification of defendant in this proceeding should be limited to the claims of those creditors.
The decree should be reversed and the case remanded. No costs.
Smith and Edwards, JJ., concurred with Souris, J.