Pacific Bridge Co. v. United States Fidelity & Guaranty Co.

Dunbar, J. This is an appeal from a final judgment for plaintiff in an action on a bond given to plaintiff, the contractor in chief for the construction of subdivision No. 1 of the Cedar River water supply system of the city of Seattle, by the defendant Charles P. Church, a subcontractor for the performance of the excavation on a certain part of that subdivision, and by the defendant, the United States Fidelity & Guaranty Company, as his surety, conditioned for the faithful performance of his contract, etc. The defendant Church was never served with process, nor has he appeared in the action, and the judgment appealed from runs only against his surety, the appellant. — 51 — The memorandum of agreement and bond are too long for entry here, but they are not essentially different from ordinary contracts and bonds in such cases. Church entered upon the performance of the contract and incurred indebtedness for provisions and supplies amounting to $286.93, and to laborers for work done, $607.21. Respondent demanded of Church that he pay these amounts, and, upon his refusal, respondent, in order to protect itself from liability upon the bond which it had executed to the city, paid these claims. It may be stated here that the respondent had executed a bond under the provisions of the statute requiring such bond to be given to- municipal corporations, of which we will speak hereafter. Church failing to complete the contract, appellant was notified by the respondent of his failure. The appellant wrote to respondent, denying all liability under the bond, and insisting that the contract had been violated by respondent, and had not been violated by the contractor, Church. Thereafter respondent completed the contract, and within six months from the first breach instituted suit against appellant for the amount of $894.14, which we have mentioned above, and which was all that was due by reason of the breach of the contract at that time. After completing the work, the respondent, by leave of the court, filed an amended and supplemental complaint, setting up the performance of the work by respondent, and the' cost thereof. The amended and supplemental complaint alleges the facts set forth in the original complaint, and the additional facts that the contract work had been completed, that respondent had been compelled to pay out for such work the sum of $21,003.59, which was the reasonable cost of completing the contract, and that all of — 52 — said sum except the sum of $894.14 was paid by respondent since the institution of the first suit; that for said work respondent had been paid by the city of Seattle the sum of $17,244.37; that, by reason of the failure of Church to perform the contract, and by reason of the failure of the defendants to repay the respondent the amount which the respondent had been compelled to pay for the performance of the contract over and above the sum which the city had paid it, the conditions of the bond had been broken, and respondent had been damaged in the sum of $3,759.22, and demand was made for that sum. At the trial the court limited respondent’s right of recovery to the amount paid out by respondent for work, labor, and material in the prosecution of the work, which amounted to the sum of $2,831.93, for which judgment was obtained by directed verdict, there seeming to be no disputed questions of fact. This judgment is appealed from, and the following errors assigned: (1) Error in overruling appellant’s demurrer to the complaint; (2) in granting the plaintiff leave to file the amended and supplemental complaint, and in overruling appellant’s demurrer thereto; (3) in overruling'the appellant’s objection to evidence of the new matter pleaded in the amended and supplemental complaint; (4) in overruling the appellant’s objection to any evidence for the plaintiff on the ground of defect of parties defendant; (5) in admitting in evidence the bonds given by the plaintiff to the city of Seattle in connection with the contract in chief between the plaintiff and the city; (6) in admitting in evidence certain sections of the general clauses appended to the contract in chief; (7) in admitting sundry insufficient and incompetent evidence to prove the plaintiff’s expenditures in completing the work — 53 — embraced in the subcontract in suit; (8) in admitting sundry evidence of improper items as part of said expenditures; (9) in denying appellant’s motion for non-suit; (10) in excluding sundry evidence offered by appellant tending to establish certain affirmative defenses pleaded on its part; (11) in refusing to direct a verdict in favor of appellant and in directing a verdict in favor of plaintiff for the sum of $2,831.93; (12) in denying appellant’s motion for a new trial and entering judgment on the verdict. Concerning the first assignment, we think the liability of the defendants upon the bond was well established in the original complaint. It is possible that, in response to a motion to make more definite and certain, the cause of action might have been stated with a little more particularity, but the whole complaint sets forth the contract and the bond. The arrangement in which they appeared in the complaint could not be material. Under the provisions of the bond it was Church’s duty to faithfully perform his contract and to pay the claims of any person against the respondent or himself, caused by any wrongful acts of either omission or commission on his part, in relation to the contract, and to save the respondent harmless from any loss in that regard. It is alleged in the complaint that Church had incurred indebtedness in the prosecution of the work under the contract, that he had not paid the claims growing out of such indebtedness, but that respondent had been compelled to pay them, and that he had refused, upon demand, to reimburse respondent. We think the complaint contains a plain and concise statement of facts, and that the appellant was not left in doubt as to the cause of the action. The demurrer to the complaint was, therefore, properly overruled. — 54 — Appellant’s second contention is that the court erred in permitting respondent to file its amended and supplemental complaint; that said complaint was demurrable (1) for insufficiency; (2) because the additional liability claimed therein was barred by the limitation of suit contracted for in the bond. We do not think the trial court abused its discretion, or erred in permitting the filing of the supplemental complaint. It was not a different cause of action that was pleaded. The cause of action was the breach of the contract, and upon this breach was based the claim for damages in both the original and supplemental complaint. The supplemental complaint was simply for the recovery of damages incurred subsequent to the filing of the original complaint, hut which had resulted from the same breach. The practice of incorporating such a complaint in the original action is not only permissible, hut is commendable practice, tending to avoid a multiplicity of suits. All this, outside of the necessity of commencing the action within the time stipulated for the limitation of actions after the breach, and of the avoidance in a separate action of the question of former adjudication. The 21st Enc. Plead. & Prac., at page 1Y, after announcing the well established rule that a bad title, set up in the original bill, cannot be aided by a supplemental bill, setting up a new and distinct title which has been acquired since the filing of the original bill, adds: “But where the complainant sets forth in his original bill a title which is sufficient to entitle him to the relief prayed, it is permissible to file a supplemental hill setting up a newly acquired interest which enlarges his rights and authorizes the court to give him greater and more extended relief.” The claim for damages was in time, and the supplemental complaint properly sustained. — 55 — ' This disposes also of appellant’s third contention— that the objection to the evidence under the supplemental complaint was improperly overruled. TTor do we think that the court erred in overruling objections to the admission of any evidence in support of respondent’s case on the ground of defect of parties defendant. Church, the party contracting with the respondent, and the principal in the bond sued on, was joined with the appellant in the title of the cause, but was never served with process, and never appeared. This contention seems to be based upon the theory that, Church not having had his day in court, the appellant, upon satisfying the judgment, could have no effective subrogation to the respondent’s rights as against Church. But this was a joint and several obligation, and the statute provides that persons severally liable upon the same obligation or instrument may, all or any of them, be included in the same action at the option of the plaintiff. We think the statute so plainly answers the objection that it precludes further discussion. The fifth contention is that the court erred in admitting in evidence, over appellant’s objection, bonds given by the respondent to the city of Seattle. The bonds were given under the statute requiring a municipal corporation contracting for public works to exact of the contractor a bond conditioned to pay laborers, materialmen, etc., and all indebtedness incurred in the performance of the work, and the statute provides that the bond shall run to the state of Washington. The respondent, to sustain its contention that it was bound to pay certain labor and supply claims, introduced a bond which, it is conceded, met the requirements of the law with the exception that it ran to the city of Seattle as obligee instead of to the state — 56 — of Washington. Whether or not the bond was in all essentials a statutory bond, it was a good common-law obligation, which the respondent and the city had a right to enter into, and which, therefore, would have hound the respondent according to its terms. The decisions of this court in State ex rel. Bartelt v. Liebes, 19 Wash. 589, 54 Pac. 26, and Baum v. Whatcom County, 19 Wash. 626, 54 Pac. 29, are conclusive on this question. We also think that the general clauses appended to the contract were part of the subcontract in suit, and were properly admitted in evidence. The contract is too long to be set forth in this opinion; but, so far as the changes in the contract of which appellant complains are concerned, the contract provides that the Cedar River water supply system shall be constructed according to the maps and profiles prescribed by the city engineer, and in accordance with the plans and specifications required by the contract entered into between the Pacific Bridge Company and the city of Seattle, with certain exceptions specified; while such specifications provide, among other things, in language comprehensive enough to embrace the changes complained of, that the city engineer shall have the right to make changes. The merits of this controversy, viz., the contention that the guaranty company stánds discharged of its liability by reason of the departure of the respondent and the subcontractor, Church, raise a question lately passed upon by this court in Cowles v. United States Fidelity & Guaranty Company, 32 Wash. 120, 72 Pac. 1032, where, after a review of the authorities, it was held that the assurance company could not invoke the doctrine of strictissimi juris in the construction of its contract, and that bonds of this character were in their nature insurance contracts and should be — 57 — construed as contracts for compensation. In that case the building contract upon which the bond was based provided that no alterations should he made except on a written order of the architects, and that, when so made, the value of the. work added or omitted should be computed by the architects, and the amount added to or deducted from the price. It ivas held that a waiver of the requirements of a written order by the contractor did not relieve a compensated surety from liability, and that the surety, by his bond, became a party to the contract, identified with the contractor. We are satisfied with the views expressed in that case, and, in accordance therewith, decide that the appellant in this case is not relieved from the responsibility of its obligation. Without specifically reviewing the evidence admitted to prove and support different claims, we think it was competent and sufficient, and that, therefore, the court did not commit error in denying appellant’s motion for a nonsuit. ISTor do we think there was any reversible error in the exclusion of testimony, in denying appellant’s motion for a new trial, or in entering judgment for the respondent. The judgment is therefore affirmed. Eulleeton, O. J., and Anders, Hadley, and Mount, JJ., concur.