Court Opinion

ID: 7199780
Source: CourtListenerOpinion
Date Created: 2022-07-24 17:06:41.822086+00
Date Added: 2024-06-11T16:16:29.157052
License: Public Domain

*73ON APPLICATION FOR REHEARING.
CARVER, J.
In an able brief for rehearing, counsel for -warrantor earnestly urge:
1. That the exception of no cause of action to the call in warranty should have been sustained, for three reasons, namely:
A. That the bond being in favor only of the defendant is a mere indemnity bond which cannot serve as the basis of a call in warranty, for lack of privity between plaintiff and warrantor, and on which no right of action arises until payment by defendant of the debt sued on.
B. That the call in warranty shows that defendant owes the contractor more than enough to pay the claim sued on.
C. That the call is too vague to admit proof.
2. That the proof in this record does not show the existence of any valid claim against the contractor besides the one sued on, to pay which the money due by defendant to the contractor is more than sufficient.
Before undertaking to answer these contentions, it will be well to point out that, in September, 1923, alter completion of the building, defendant’s attorney wrote the warrantor fully disclosing the situation, which was as follows:
The contract price was.,_____________$27,495.00
on which had been paid................$25,444.07
leaving due the contractor __________$ 2,050.93
Liens had -been filed amounting to $4,080.39, or, say, $2,029.46 over and above the amount due the contractor.
One of these liens, though, namely; 'that due to. Frizzell, amounting to $410.30, defendant’s attorney considered had- been filed too late.
He, therefore, suggested to the- surety company that it send $1,619.16 which, added to the $2,050.93 defendant owed, would be sufficient to discharge all the recorded liens, except. Frizzell’s.
October 9, 1923, the surety company replied to this letter, directing payment of certain liens and non-payment of others.
Its letter concluded thus:
“Should there be any suits instituted against the W. O. W. on the. last referred to liens this company will furnish attorney to defend the suits provided ‘ it' is' notified of these suits promptly.”
Defendant paid those instructed to be paid, which left $1,109.40 still due ' the contractor.
When the present plaintiff, one of those directed not paid, filed its suit, defendant answered, calling the warrantor Tn warranty.
The warrantor- filed its answer, on April 21, 1924, and in the answer evinced no disposition to repudiate the apparent assumption by it of control over the situation as shown by its letter of October 9.
It denied, categorically, for lack of sufficient information, the allegations • of plaintiffs petition in twelve paragraphs. In its thirteenth paragraph it .plead- prescription against plaintiff: The' only part of its answer referring, to the- call in warranty is contained in the -fourteenth paragraph, which, set up, as -its sole defense- against the ..call in warranty, the claim that defendant was obliged, under its contract with the contractor, to retain 10 per- cent *74of the' contract price until forty-five days after acceptance of the building, which amount, it alleged, was more than sufficient to pay such judgment as might be rendered against defendant in the suit.
On May 12, 1924, it sought to change front, and filed an exception of no cause of action to the call in warranty, which exception it seriously presses in its application • for rehearing.
I.
Counsel confidently urge that the case of Bain vs. Arthur, 129 La. 143, 55 South. 743, is conclusive of the first point herein urged.
We do not think so. The bond in that case was not a statutory bond given to secure the performance of the contract by the contractor. It was a mere conventional obligation given to indemnify the surety in case of loss by reason of that surety’s having signed a contractor’s bond.
The bond in this case is a statutory bond, given under Act 167 of 1912 and amendments, and so states in lines 57 and 58.
See page 89, exhibit 17.
In Macready vs. Schenck, 41 La. Ann. 456, 6 South. 517, the court dealt with a bond given by a surviving partner as liquidator of the partnership under a statute (Civil Code 1138 et seq.) requiring such bond to be made' payable to the representative of the deceased partner’s succession. The bond there was made in favor of the' judges of the court instead of' to the succession representative.
The court said:
“Under the well settled doctrine that where a bond is given under the authority of a law, whatever is included in the bond which is not required by the law, must be read out of it, and, whatever is not expressed, and ought to have been incorporated, must be read as if inserted into it, it follows that the words found in the bond by which it is made payable to the judges, of the Civil District Court, must be left out, and the words to the succession representatives, must be deemed as embodied in their place.”
Under this authority we think the bond in this case must be regarded as in favor of the material men as well as the owner, that being the requirement of the statute under which it was given.
This disposes of counsels’ contention that there was no privity between plaintiff and warrantor, and also of their claim that no right of action arises until payment by plaintiff of the claim, sued on.
As to defendant’s admission on that it still owed the contractor enough to pay plaintiff, the call also set up that there were other claims all of which together were more than sufficient to exhaust the balance due the contractor. This, in our opinion, showed that there would be liability on the bond and hence constituted a cause of action.
The claim of vagueness, we think, cannot be urged under an exception of no cause of action. Such a plea should have been advanced in .its own name and in limine. If so advanced, defendant could have cured and would have been entitled to cure its • petition, if defective on that ground, by more specific allegations.
*75II.
On the merits, the warrantor’s claim in this case is not that plaintiff’s claim is not established, but that defendant owes the contractor enough to pay it, and there being no proof in this record that any other claim is due, it follows that defendant cannot recover on the bond.
Other suits before the court do show other valid claims, enough to overcome the balance due the contractor.
But warrantor’s counsel say that those suits should not be regarded as evidence herein.
Taking this as correct, we do not think it entitles the warrantor to a dismissal of the call in warranty in this suit and then, in turn, to a dismissal of the call in each of the other suits for the same reason, thus making the small balance of $1109.40 serve to defeat claims amounting to much more than that.
In equity we think warrantor entitled to no more than a provision which will assure payment of this balance on valid claims whether included in this suit or other suits, so that warrantor can be held only for whatever amount may be due after defendant pays on valid claims what it should pay.
This provision can be made by requiring it to pay into the registry of the court before execution of the judgment herein rendered, a sum to be applied to this claim and to other valid claims, if any. If, on examination of the other suits, the claims therein are found valid, then they, too, must be paid out of the deposit. If not, they will be rejected.
The result of this will be that defendant can recover nothing until and unless the valid' claims exhaust the amount which it should pay but without deciding on this case that they do ■ exhaust it.
Counsel also contend that defendant is trying to provoke a concursus in an irregular way and without depositing the balance due the contractor.
We do not perceive how this course has resulted or uould have resulted in any prejudice to the warrantor. The plea comes with poor grace, considering that the warrantor, in its letter of October 9, 1923, virtually directed defendant to await suit of the lienors and promised to furnish an attorney to defend same.
The introduction of this letter was objected to by warrantor, but only on the grounds that it was incompetent, immaterial, outside of the pleadings and did not refer to payments called for by the contract. But we do not think these objections well founded. The only defense made by warrantor against the call in warranty, besides the exception of no cause of action, was that defendant should have retained more of the contract price than it did retain.
The letter accounted for part of what warrantor was claiming should . have been retained.
Counsel also objects that defendant’s contention as to this letter being a justification of payment is virtually urging an estoppel which, warrantor says, is not allowable, because estoppel was not pleaded.
Defendant did not urge this estoppel as a .ground of recovery but as a .reason *76why. warrantor’-s plea of anticipated ■ payments was not good. We think it had the right to do this without any plea, replications under o.ur rules of practice not being required or permitted.
Our • -re-examination, though, has convinced us ■ that there was 'error to the prejudice of warrantor in our original decision in two respects.
1. In fixing the amount of the deposit to be made by the Camp at $1109.40; and
2. In giving judgment against the warrantor for the whole of plaintiff’s claim herein instead of for the amount of that claim less plaintiff’s share of the deposit so to be made.
Under its contract the Camp should have retained 10% of the contract price, which would be $2749.50. At the time of its report to the warrantor it had only $2050.93, showing an anticipated payment to the contractor of $698.57. We think the Camp should be regarded, quo ad the surety, as still having this $698.57 on hand. This added to the $1109.40 really due the contractor will total $1807.97, which is the amount that should, in our opinion, be deposited.
We cannot ■ correct these errors, at least without the consent of the Camp, without granting a rehearing.
See Act 100 of 1896.
Reed vs. Corbin, 115 La. 137, 38 South. 942.
Inasmuch,.'though, as no one is interested in opposing 'the correction except the Camp, we think it not improper to make it with its consent.
We shall, therefore, refuse the rehearing applied for by warrantor but make the indicated changes with a reservation to the Camp of its right to apply for a rehearing which, if applied for, will be granted as of course. If not applied for, its failure to do so will be taken as consent to the correction.
For these reasons, the rehearing is réfused, but the decision heretofore rendered is modified as follows:
First: Instead of defendant, Ouachita Valley Camp No. 10, Woodmen of the World, having the right to execute the judgment herein rendered against the warrantor on depositing $1109.40, it is decreed that it shall have that right only on depositing $1807.97; out of which deposit shall be paid, pro rata, the judgment in favor of the plaintiff in this suit and such judgments as may be or may have been rendered in favor of plaintiffs in the following suits in which the warrantor herein has been called in warranty, namely:
No. 2302, Parlor City Lumber Co., Inc., vs. A. Delatte, et al.
No. 2303, C. C. Bell vs. A. Delatte et al.
No. 2304. Monroe Hardware Company. Inc., vs. A. Delatte et al.
Second: The judgment herein rendered in favor of Ouachita Valley Camp No. 10, Woodmen of the World, against Union Indemnity Company, shall be credited with the share of the plaintiff herein of such deposit.
Third: The right is reserved to Ouachita Valley Camp No. 10, Woodmen of the World, to apply for a rehearing.
Ouachita Valley Camp No. 10, Woodmen of the World, defendant, shall pay the cost of this appeal; all other costs to he paid *77by the warrantor, Union Indemnity Company.
Odom. Judge, recused.