Court Opinion

ID: 9682601
Source: CourtListenerOpinion
Date Created: 2023-08-24 08:14:42.097608+00
Date Added: 2024-06-11T18:17:40.316858
License: Public Domain

ON REHEARING
MADDOX, Justice.
In view of appellee’s very forceful argument on application for rehearing that we have changed the law of subrogation in the State of Alabama in the original opinion, we deem it advisable to extend our opinion. The theory upon which the plaintiffs proceeded in the trial court was that there was “one claim” and that Aetna, having paid part of Con-Serv’s suppliers, was “partially subrogated” to Con-Serv’s olaim against Wood and Continental. A close reading of the original opinion will show that while we discussed rights of subrogation generally we did not decide that Aetna was or was not subrogated, but as indicated in the opinion, the sole question decided was whether, even if partially subrogated, Aetna should have given written notice as required by statute before it sued 'Continental. We held that regardless of what status Aetna had, if it was making a claim against Continental under statute which authorizes such suits, the giving of notice as the statute requires was a condition precedent. We still hold this to be the law.
Since the original opinion may be misconstrued in regard to the statements we there made regarding subrogation rights, we state here that we did not intend to say in the initial opinion that a surety, having paid its principal’s obligations, would not be entitled to subrogation in an equivalent amount to the right of the principal to collect balances due on the contract price. See Maryland Casualty Co. v. Dupree, 223, Ala. 420, 136 So. 811 (1931). We do point out, however, that even though a surety, in a proper case, can be subrogated to the rights of its principal, we have found no case where a subcontractor and the surety on his performance bond, who has paid a part of his principal’s obligations, has been allowed to proceed against the general contractor and its surety under the Miller Act or under similar state statutes on the theory that there is but “one claim” and notice to the general contractor’s surety by the subcontractor alone is sufficient to allow a claim to be filed by both the subcontractor and his surety.
We think we should point out also that Aetna was the surety on Con-Serv’s performance bond. Wood was the obligee on this bond and according to the conditions of the bond no right of action accrued on the bond to or for the use of any person or corporation other than the obligee or its successors. Under such facts, it is only reasonable to assume that if Aetna is to make claim against its own obligee and Us surely in connection with the subcontract it should be required to give written notice and the nature of such claim to its obligee’s surety.
Hopefully, we have erased appellee’s concern that we have changed the law with regard to the right of a surety, in a proper case, to become subrogated to its principal when there is a right to collect balances due on the contract price. We thought we had carefully stated in the initial opinion that the question of “subrogation” was not necessary to a decision in the case because there was no question that Aetna had not given written notice as required by statute, which we held then and still hold to be a condition precedent. The Continental bond was given pursuant to the terms of Act No. 39, General Laws of Alabama, approved February 8, 1935 (Title 50, § 16). We have said that when a bond contains conditions which incorporate the statutory law, a compliance with such con*417ditions is a prerequisite to the maintenance of an action to recover on such bond. Scott v. United States Fidelity & Guaranty Co, 252 Ala. 373, 41 So.2d 298 (1949).
We are aware that Title 50, § 16, is to be liberally construed to effect the purpose of the statute. State for Use of Wadsworth v. Southern Surety Co, 221 Ala. 113, 127 So. 805, 70 A.L.R. 296 (1930). We are unwilling, however, to say that the Legislature intended to dispense with the notice requirement in fact situations as here presented.
The application for rehearing is due to he overruled and denied.
Opinion extended and application overruled.
LIVINGSTON, C. J, and MERRILL, HARWOOD and McCALL, JJ, concur.