Court Opinion

ID: 5610472
Source: CourtListenerOpinion
Date Created: 2022-01-11 03:58:00.784111+00
Date Added: 2024-06-11T08:37:05.559578
License: Public Domain

Harwell, J.,
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 *768given' upon the judgment of the engineers, as required by the contract. (3) The petition as amended fails to show that any notice was given to the surety of plaintiff’s contention that the contractor had abandoned the contract, as required by the condition in the bond that “The said surety company shall be notified in writing of any act on the part of the sáid 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.” The court sustained the demurrer and dismissed the petition. ‘
' 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, *769tools, 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 *770if in their opinion there is an insufficiency of workmen, etc., or the contractors are not making such progress as will probably result in its completion upon the date agreed upon, then he may give the written notices requiring them to put additional labor, machinery, and material on the work. It would be absurd to say that the judgment of the engineers should be obtained in order to determine whether or not the contractors would likely complete it with the workmen and materials being used on the job within the date agreed upon, when the contractors have completely abandoned the work. Abandonment, of course, means that they have quit the work entirely, that they do not expect to complete it, or will not attempt to complete it. In construing a contract the court should seek to effectuate the intention of the parties making it, and should ascertain that intention from the language employed in the instrument itself. This court has said that contracts like that in the instant case, which is substantially one of fidelity insurance, are to be governed by the rules applicable to insurance companies, and when the contract is fairly susceptible of two constructions, one favorable and one unfavorable to the indemnity company, the latter is to be adopted. It is a familiar rule of law that ambiguities are to be construed most strongly against the insurer. John Church Co. v. Ætna Indemnity Co., 13 Ga. App. 831 (80 S. E. 1093); Hall v. General Accident Assurance Corp., 16 Ga. App. 74 (85 S. E. 600); American Surety Co. v. Pauly, 170 U. S. 133, 144 (18 Sup. Ct. 552, 42 L. ed. 597); Home Savings Bank v. Mass. Bonding &c. Co., 19 Ga. App. 352, 362 (91 S. E. 494), and citations. The contract or the 'bond contains nothing that requires the certificate or judgment of the engineers where the contract is abandoned by the contractor. In Heidbrink v. Schaffner, 147 Mo. App. 632 (127 S. W. 418), the Missouri court holds, that a building contract, providing that the owner, on a certificate by the architect of the contractor’s failure to perform any of the agreements, may on three days notice terminate the contract and complete the work, and that the expense incurred by the owner shall be certified by the architect, whose certificate shall be conclusive, does not provide against the contingency of abandonment of the work by the contractor, and where the contractor abandons the work, the owner may complete it without obtaining the architect’s 'certificate; the word "agreements” being synonymous with the word "stipula*771tions.” In the opinion in that ease it is said: “We accede to the proposition asserted by counsel for defendants that a stipulation for the certificate of an architect about whether breaches of a contract have occurred or payments are due under,, it, or any like matter, requires the party who seeks damages for a breach embraced in the stipulation to allege and prove a certificate was given.” But the court goes on to observe that stipulations of this sort as to certificates from an engineer do not apply where the contractor has abandoned the contract and the suit is brought on his bond; and it is stated that “this conclusion was announced in a case on an identical bond .and contract in Fuller v. Doyle, 87 Fed. 687, 692.” See also El Paso &c. R. Co. v. Eichel (Tex. Civ. App.), 130 S. W. 948; Dorn v. Ebbesen, 72 Wis. 284 (39 N. W. 535).
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*772fully and in violation of their contract, discontinued the work contemplated by the contract, and did not do any work thereon after September 21, 1914.” Accordingly, the lighting company on October 1, notified the contractors that unless “you or your surety shall, within five days from the date hereof, resume work,” etc., “your contract shall become cancelled, and we shall take possession for the purpose of completing the work as provided in the contract.” While this language does not use the word abandon, it substantially charges an abandonment of the contract. The amendment filed by the plaintiff, which has already been set out, distinctly alleged an abandonment of the work.by the contractor, and we are now dealing with the petition as amended. I think, therefore, that under the contract and the bond, no certificate or judgment of the engineers was required, when the contractor abandoned the work, but that the lighting company might proceed to give notice to the surety of such default on the part of the contractor, and in order that the surety might- exercise the option which it had, of completing the work, or might take steps as it might think necessary in order to protect itself; and upon the failure of the surety company to take possession and complete the work, the lighting company might proceed to do so.
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*773tract.” This was followed by the letter of October -8, a copy of which was also mailed to the surety company, in which both parties were informed that, in accordance with the provisions of the contract, the owner thereby cancelled the contract by reason of the failure to resume work as previously notified, and had taken possession of the work for the purpose of completing the same on the contractor’s account. The clause of the bond which provides for notice simply says 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 hereunder,- immediately after the occurrence of such act shall have come to the knowledge of said owner.” It is immaterial, it seems to the writer, whether the notices were given upon the right or the wrong theory, if they were a. substantial compliance with the clause in the bond requiring notice to the surety company of any act on the part of the principal which might involve a loss to the surety. The writer thinks that the notice given was a sufficient compliance with that clause in the bond quoted above to put the surety company on notice that the contractors had discontinued the work since September 21, and that it would treat such discontinuance as an abandonment of the work.. It notified the surety company that the owner Would give them five days after October 1 in which to resume the work, and that at the end of that time if they did not resume the work, the owner would take possession and complete it. This notified the surety company that the owner would, five days after October 1, treat the failure of the contractors to resume work as an abandonment of the work, and gave the surety company an opportunity, at its option, to assume the contract and sublet or complete it, as provided in the bond in the event of abandonment. ' It certainly put the company on notice of this act on the part of the principal, which might involve a loss to the surety company, and that is all that the notice required, i. e. to notify them of any act on- the part of the principal which might involve a loss to the surety company. It is true that a clause in the bond says that if the principal shall voluntarily abandon the contract, the surety shall have the right at its option to assume the contract or to sublet or complete the same, but by this notice the surety company was not deprived of this right. . The notice in fact called on the contractor or the *774surety company to' resume work on the job. The surety company had eight days after the notice was given in which to exercise this option, if it desired to do so. How could the owner have put the surely company upon notice more specifically and definitely than it did? It notified the surety of the discontinuance of the work by the principal; it called on the surety to resume work within a certain time, and in effect, if not in exact language, notified the surety that a further discontinuance would be treated as abandonment; it certainly put the surety upon notice that this default, on .the part of the principal might involve the surety in a loss. The notice simply stated the facts to the surety company, and that is all that the clause in the bond with reference to the notice required. I think, therefore, that the allegations in the petition on the question of notice to the surety company were sufficient to withstand the attack made by the demurrer, and to take the case to a jury, and that the court erred in sustaining the demurrer and in dismissing the petition.