Opinion
36542.
DECIDED APRIL 25, 1957. REHEARING DENIED MAY 13, 1957.
Action on bond. Before Judge Drake. Bainbridge City Court. September 22, 1956.
Conger Conger, Leonard H. Conger, for plaintiff in error.
E. P. Stapleton, Custer Kirbo, contra.
1. Where it appears from a certificate of the clerk of the court from which the appeal is taken, that the failure of the clerk to mark the bill of the exceptions "filed" on the proper date, is in on way attributable to any fault of counsel for the plaintiff in error, the writ of error will not be dismissed.
2. The validity of a bond given in compliance with a statute, and which meets the requirements of the statute, is not affected or its nature changed by the inclusion in the bond of a condition that is either not authorized or is repugnant to the statute, except in the instances where the law expressly provides that a bond not made strictly in accordance with the statute is void.
DECIDED APRIL 25, 1957 — REHEARING DENIED MAY 13, 1957.
Koppers Company, Inc., sued St. Paul-Mercury Indemnity Company in the City Court of Bainbridge on a certain bond. The case came to this court on the defendant's exception to the overruling of a general demurrer to the petition as amended.
The original petition set forth: "1. That the defendant herein named is St. Paul-Mercury Indemnity Company, St. Paul, Minnesota, which is an insurance corporation organized under the laws of the State of Delaware but said non-residence corporation has appointed S. A. Manthe, 616 Redrock Building, Atlanta, Fulton County, Georgia, as its agent and attorney in fact for services. 2. That the defendant company is indebted to petitioner in the sum of $12,879.23 by reason of the facts hereinafter alleged. 3. That on the 18th day of August, 1953, the defendant, St. Paul-Mercury Indemnity Company, St. Paul, Minnesota, entered into eight certain labor and material payment bonds in compliance with Code Section 23-1705 of the Code of Georgia as surety for Bruce Bowen, Inc., naming State School Building Authority as obligee, for the use and benefit of anyone having a direct contract with Bruce Bowen, Inc., or with a subcontractor of said named principal for labor, material or both, used or reasonably required for use in the performance of the building contract of the said Bruce Bowen, Inc., with said State School Building Authority for Improvement No. 39-1 being the Bainbridge Elementary School No. 1 (White) for Decatur County Board of Education; Improvement No. 39-2, West Bainbridge Elementary School (Colored) for Decatur County Board of Education; Improvement No. 39-3 West Bainbridge Elementary School (White) for Decatur County Board of Education; Improvement No. 39-4, Four Mile Creek Elementary School (Colored) for Decatur County Board of Education; Improvement No. 39-5, Bainbridge Elementary School No. 2 (White) for Decatur County Board of Education; Improvement No. 39-6, Hutto High and Elementary School (Colored) for Decatur County Board of Education; Improvement No. 39-7 Attapulgus High School (Colored) for Decatur County Board of Education; and Improvement No. 39-10, Attapulgus Elementary School (White) for Decatur County Board of Education. A copy of the bond given for Improvement No. 39-1 is hereto attached, marked Exhibit `A' and made a part hereof. All other such bonds are in the same words and figures except the indemnifying amount which as to 39-2 is $189,977; as to Improvement 39-3, $73,525; as to Improvement No. 39-4, $154,114; as to Improvement No. 39-5, $205,390; as to Improvement No. 39-6, $141,635; as to Improvement No. 39-7, $140,558 and as to Improvement No. 39-10, $32,340, and in the portion of the bond which describes the contract which follows the language set out above as to each numbered improvement. 4. The plaintiff, Koppers Company, Inc., furnished material for the construction of said named improvements to Gay-Smith Roofing Supply Company of Donaldsonville, Georgia, a subcontractor of said Bruce Bowen, Inc., in the amount of $12,879.23 as appears by an itemized statement of said materials hereto attached, marked Exhibit `B' and made a part hereof. 5. That neither Gay-Smith Roofing Supply Company nor Bruce Bowen, Inc., nor the defendant, St. Paul-Mercury Indemnity Company, St. Paul, Minnesota, has ever paid plaintiff any part of the sums represented by the aforesaid invoices evidencing material going into the construction of said public buildings or improvements. 6. That said improvements were completed and accepted by the proper authorities as follows: 39-1 and 39-2 on August 6, 1954; 39-3, 39-4, 39-6, 39-7 and 39-10 on September 7, 1954. 7. That no suit was brought by the obligee on said bond within ninety days after the completion of the contract and acceptance of said improvements and public works by the proper authorities. 8. That Bruce Bowen, Inc., Gay-Smith Roofing Supply Company are nonresidents of Decatur County and that the defendant, St. Paul-Mercury Indemnity Company, St. Paul, Minnesota, has no office or agent in said county but has consented to suit therein by the terms of paragraph 3c of said bond. Wherefore, petitioner prays that process issue directed to St. Paul-Mercury Indemnity Company, St. Paul, Minnesota, and by second original be served upon the said S. A. Manthe, attorney in fact for service by the Sheriff of Fulton County, Georgia, and that petitioner do have and recover judgment in the sum of $12,879.23.
"Exhibit A. Know all men by these presents: That Bruce Bowen, Inc., Quincy, Florida, as principal, hereinafter called principal, and St. Paul-Mercury Indemnity Company, St. Paul, Minnesota, as surety, hereinafter called surety, are held and firmly bound unto State School Building Authority, 311 Capitol Building, Atlanta, Georgia, as obligee, hereinafter called owner, for the use and benefit of claimants as hereinbelow defined, in the amount of two hundred twenty-eight thousand seven hundred seventy and no/100 dollars ($228,770), for the payment whereof principal and surety bind themselves, their heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents. Whereas, principal has by written agreement dated August 18th, 1953, entered into a contract with owner for Improvement No. 39-1 Bainbridge Elementary School No. 1 (White) for Decatur County Board of Education in accordance with drawings and specifications prepared by J. G. Kwilecki, Jr., and Bothwell and Nash, architects, which contract is by reference made a part hereof, and is hereinafter referred to as the contract. Now, therefore, the condition of this obligation is such that if the principal shall promptly make payment to all claimants as hereinafter defined, for all labor and material used or reasonably required for use in the performance of the contract, then this obligation shall be void; otherwise it shall remain in full force and effect, subject, however to the following conditions: 1. A claimant is defined as one having direct contract with the principal or with a subcontractor of the principal for labor, material, or both, used or reasonably required for use in the performance of the contract, labor and material being construed to include that part of water, gas, power, light, heat, oil, gasoline, telephone service or rental of equipment directly applicable to the contract. 2. The above named principal, and surety hereby jointly and severally agree with the owner that every claimant as herein defined who has not been paid in full before the expiration of a period of ninety days after the date on which the last sum of such claimant's work or labor was done or performed, or materials were furnished by such claimant may sue on this bond for the use of such claimant in the name of the owner, prosecute the suit to final judgment for such sum or sums as may be justly due claimant, and have execution thereon, provided, however, that the owner shall not be liable for the payment of any costs or expense of any such suit. 3. No suit or action shall be commenced hereunder by any claimant, (a) Unless claimant shall have given notice to any two of the following: The principal, the owner, or the surety above named, within ninety (90) days after such claimant did or performed the last of the work or labor, or furnished the last of the materials for which said claim is made, stating with substantial accuracy the amount claimed and the name of the party to whom the materials were furnished, or for whom the work or labor was done or performed. Such notice shall be served by mailing the same by registered mail, postage prepaid, in an envelope addressed to the principal, owner or surety, at any place where an office is regularly maintained for the transaction of business, or served in any manner in which legal process may be served in the state in which the aforesaid project is located, save that such service need not be made by a public officer. (b) After the expiration of one (1) year following the date on which principal ceased work on said contract. (c) Other than in the state court of competent jurisdiction in and for the county or other political subdivision of the state in which the project or any part thereof is situated or in the United States district court for the district in which the project, or any part thereof, is situated, and not elsewhere. 4. The amount of this bond shall be reduced by and to the extent of any payment or payments made in good faith hereunder inclusive of the payment by surety of mechanics' liens which may be filed of record against said improvement, whether or not claim for the amount of such lien be presented under and against this bond. Signed and sealed this 18th day of August, A.D., 1953.
Bruce Bowen, Inc. by s/ H. B. Bowen, Pres. (Seal) Principal s/ J. F. Cross, Secy. St. Paul-Mercury Indemnity Co. (Seal) Surety In the presence of: By s/ Barney W. Crane s/ Robert E. Henry Attorney in fact. Countersigned at Lincolnton, Ga. By s/ Mildred Word Morris." An account for items of materials and supplies giving the total amount was attached to the petition, and marked Exhibit B.The general demurrer directed to the petition was on the grounds:
"1. Said petition does not, as a whole nor do any of its several paragraphs or parts, show a cause of action against defendant. 2. Said petition does not, as a whole nor do any of its several paragraphs or parts, show a cause of action against defendant in that said petition fails to allege that the plaintiff foreign corporation is authorized to do business in the State of Georgia and is thus entitled to sue in the court of the State of Georgia. 3. Said petition does not as a whole nor do any of its several paragraphs or parts, show a cause of action against defendant in that said petition shows, on its face together with the alleged bond attached thereto as Exhibit `A', that there is no contractual relationship between plaintiff and this defendant and that for this reason plaintiff is not such person as can bring suit on such bond. 4. Said petition does not, as a whole nor do any of its several paragraphs or parts, show a cause of action against defendant in that said petition shows, on its face and on the alleged bond attached thereto as Exhibit `A', that this plaintiff is neither the obligee in such a bond nor such claimant as defined in said bond, and for this reason plaintiff cannot bring suit on said bond. 5. Said petition does not, as a whole nor do any of its several paragraphs or parts, show a cause of action against the defendant in that said petition shows, on its face and on the alleged bond attached thereto as Exhibit `A', that any suit brought on said bond must be brought in the name of the owner as set out therein, for the use of the claimant and for this reason plaintiff cannot bring said suit in its own name. 6. Said petition does not, as a whole nor do any of its several paragraphs or parts, shows a cause of action against defendant in that said petition fails to allege that the required notice, as provided in paragraph 3 (a), was given to the required persons as set out in the alleged bond attached to said petition as Exhibit `A'. 7. Said petition does not, as a whole nor do any of its several paragraphs or parts, show a cause of action against defendant in that said petition shows on its face and on the alleged bond, attached thereto as Exhibit `A', that said bond does not conform to Code Section 23-1705 as alleged in said petition, and that for this reason plaintiff is not entitled to bring action on said bond. 8. Said petition does not, as a whole nor do any of its several paragraphs or parts, show a cause of action against defendant in that said petition shows on its face and the copy of the bond attached thereto as Exhibit `A', that the requirements of the Code with respect to attaching a certified copy of said bond to said petition had not been complied with. 9. Said petition does not, as a whole nor do any of its several paragraphs or parts, show a cause of action against defendant in that said petition fails to allege any contract between principal in said alleged bond and plaintiff herein. 10. Said petition does not, as a whole nor do any of its several paragraphs or parts, show a cause of action against defendant in that said petition fails to allege or set out any contract between the principal on said bond and Gay Smith Roofing Supply Company of Donaldsonville, Georgia, to whom plaintiff allegedly supplied certain materials. 11. Said petition does not, as a whole nor do any of its several paragraphs or parts, show a cause of action against defendant in that said petition fails to allege that the materials set out were used or reasonably required for use in the performance of the contract under a direct contract with the principal and with its subcontracts of the principal in such manner as to bring it within the provision of said alleged bond attached to said petition as Exhibit `A'."
The plaintiff amended the petition and the defendant renewed and insisted upon its general demurrer to the petition as amended. The amendment to the petition alleged: "9. Plaintiff duly notified the State School Building Authority of its claim and the default of the contractor thereon by letter dated February 9, 1955, a copy of which is hereof attached, marked Exhibit `B' and made a part hereof. Said letter and notice were duly acknowledged by said Authority by letter addressed to its attorneys under date of February 18, 1955, a copy of which is hereto attached, marked Exhibit `C' and made a part hereof. 10. On February 18, 1955, said Authority notified the defendant, St. Paul-Mercury Indemnity Co., of the existence of said claim, sending the defendant a copy of the letter of notice dated February 9, 1955, a copy of the letter addressed to said defendant is hereto attached and marked Exhibit `D' and made a part hereof. 11. Under the terms of each of the construction contracts between State School Building Authority and Bruce Bowen, Inc., which said contracts were referred to and made a part of the bonds executed by the defendant, and in particular under Articles 4 and 5 of said contracts — which said contracts are identical in language as respects Articles 4 and 5 thereof, — the Authority withheld 10% of the contract price until satisfactory evidence should be submitted as to the payment of material bills and all other indebtedness connected with the work. A copy of Articles 4 and 5 contained in said contracts is hereto attached and made a part hereof and marked exhibit `E'. 12. At the time plaintiff notified the Authority of its claim and the default of the contractor thereon, plaintiff requested said authority to withhold final payment until its account was paid in full and the Authority then had funds withheld under the terms of said contracts greatly in excess of the amount of plaintiff's claim, and did withhold final payment to the contractor and would have continued withholding payment thereof but for the conduct of the defendant hereinafter shown. 13. The defendant, upon receipt of notice of the existence of plaintiff's claim and upon receipt of notice that the Authority refused to pay the retained percentages under said contract, appeared before said Authority with the contractor and appealed to and urged said Authority to pay the retained percentages then withheld and upon the refusal of said Authority to do so, offered to and did give an additional bond to said Authority for the purpose of persuading it to make a final payment of the retained percentages under the contracts. A copy of said bond dated March 9, 1955, being hereto attached, marked Exhibit `F' and made a part hereof. As an inducement to said Authority, the defendant agreed that if the account was true, just and unpaid that the defendant would pay the same. 14. Plaintiff showed that at said time the additional bond was given to said Authority that the Bruce Bowen, Inc., contractor and Gay-Smith Roofing Supply Company, the subcontractor, were both insolvent, which said facts were known to the defendant. 15. Plaintiff shows that it had a legal right to demand and collect said indebtedness from the contractor and had the legal and moral right to present said claim to said authority and to collect the same by having the Authority withhold the retained percentages until its claim was duly satisfied. Plaintiff alleges upon information and belief that the Authority would have required payment thereof by the contractor out of said retained percentages but for the conduct of the defendant hereinabove alleged. 16. By reason of the aforesaid conduct of the defendant, the ninety days notice provided in the bond was waived. 17. The conduct of the defendant in prevailing upon the Authority to release the retained percentages and the giving of said additional bond has estopped it to refuse payment and deny liability under its bond on the ground that the ninety days notice provided in paragraph 3a of the bond was not furnished, or for any other reason. 18. The defendant agreed with the Authority that it would pay the claim of plaintiff if established as correct and unpaid as a condition for releasing the retained percentages and is now estopped from refusing to pay the same. Wherefore, plaintiff prays that this its amendment be allowed."
The exhibits referred to in the amendment were attached thereto; it is not necessary to a clear understanding of what is held in this case that they be set forth.
In this opinion the plaintiff in error will be referred to as the defendant and the defendant in error as the plaintiff, they having occupied those positions in the trial court.
1. The defendant insists that the writ of error should be dismissed because the bill of exceptions was not filed with the clerk of the trial court until November 26, 1956, which was seventeen days after the date of certification by the trial judge. This contention would be meritorious were it not for the fact that the clerk of the trial court has filed a certificate in which she states the bill of exceptions was presented to her on November 24, 1956, but due to the press of business was erroneously not marked filed until November 26, 1956. The failure of the clerk to mark the bill of exceptions "filed" on the proper date, being in no way attributable to any fault of counsel, the writ of error will not be dismissed. McDaniel v. Columbus Fertilizer Co., 109 Ga. 284 ( 34 S.E. 598); Jones v. Smith, 83 Ga. App. 798, 802 ( 65 S.E.2d 188); Kersey v. Barfield, 46 Ga. App. 442 ( 167 S.E. 925).
2. The bond contained a condition that "Unless claimant shall have given notice to any two of the following: The principal, the owner, or the surety above named, within ninety (90) days after such claimant did or performed the last of the work or labor, or furnished the last of the materials for which said claim is made, stating with substantial accuracy the amount claimed and the name of the party to whom the materials were furnished, or for whom the work or labor was done or performed. Such notice shall be served by mailing the same by registered mail, postage prepaid, in an envelope addressed to the principal, owner, or surety, at any place where an office is regularly maintained for the transaction of business, or served in any manner in which legal process may be served in the state in which the aforesaid project is located, save that such service need not be made by a public officer."
In the bond, Bruce Bowen, Inc., is the principal and the State School Building Authority is designated as the "owner." The petition revealed that the condition was not complied with. It follows that if the condition was valid the demurrer should have been sustained. In a conventional bond the condition would have been legal and enforceable. If the bond was a statutory bond, that is one made in compliance with the requirements of a particular law, the condition was not valid unless that particular law authorized its inclusion in the bond.
The validity of a bond given in compliance with a statute, and which meets the requirements of the statute is not affected or its nature changed by the inclusion in the bond of a condition that is either not authorized or is repugnant to the statute, except in the instances where the law expressly provides that a bond not made strictly in accordance with the statute is void.
The bond in the instant case is without question a statutory bond given to meet the mandate of the law embodied in Code § 23-1705. The bond contains every provision prescribed by the Code section, and recites that it is given for the very purpose the law codified in the section contemplated. No law declares that a bond given in compliance with Code § 23-1705 but which included a condition not authorized by the statute is void or invalid.
The case of Stephens v. Crawford, 1 Ga. 574, 581, contains the same pronouncement similarly phrased: "It is true, as claimed by learned counsel for the defendant in error, that if a bond, required by statute, departs from its strict provisions, as where the penalty is larger than that named in the act, it is notwithstanding good, so far as it is in conformity with it; unless the statute expressly declares that all bonds, not taken in conformity with its provisions, shall be void."
The rule was confirmed in Kahn v. Herman, 3 Ga. 266, 273: "We think for these reasons, that the bond given, is substantially in conformity with the statute.
"But, admitting that it is not in exact conformity with the statute, we then say that not only will not the attachment be dismissed for that cause, but the bond is not void for that cause. To render a bond taken under a statute, void, it must be so according to express enactment; or must be intended to operate as a fraud upon the obligors by colour of the law, or as an evasion of the statute. The statute requiring this bond to be given, does not expressly enact that it shall be void unless taken in exact conformity with its provisions; it says, in fact, nothing about the validity of the bond; it only declares that if such a bond as it requires is not given, the attachment shall be dismissed with costs. If the bond is not expressly enacted to be void unless taken in conformity with the statute, then the rule is, that a bond taken under such a statute, is good so far as it conforms to it, and void only so far as it does not conform. Commissioners of the Treasury vs. Davis, cited in 2 Nott McCord, R. 426; The State vs. Mayson, id. 425; Treasurer vs. Bates, 2 Bailey R. 376; Stephens et al. vs. Crawford, Gov. c., 1 Kelly, R. 581. Under this rule the bond is good as to the other conditions, if it is void (which we have not admitted,) as to that condition which is claimed to be in disconformity with the statute; and is therefore a sufficient bond to prevent the dismission of this attachment."
"It has been variously stated that where a bond is void in part, as violative of a statute, the whole bond is void. However, the prevailing opinion is that where the conditions of a statutory bond are separable, and local statute does not expressly or by necessary implication declare it void as a whole, the conditions not authorized or prohibited may be rejected as surplusage, and the residue may be sustained as a good statutory bond pro tanto, the rule being the same as that applied to common-law bonds partly good and partly bad." 8 Am. Jur. 720, § 32.
The cases and textbook authorities cited in the good briefs of both the plaintiff and defendant have been carefully examined.
The principal opinions cited by the defendant as precedents for holding that the bond should be construed according to its exact language and that force should be given the clause requiring the ninety day notice to the principal or owner, though it is not authorized by the statute are: American Surety Co. v. Small Quarries Co., 157 Ga. 33 ( 120 S.E. 617); Hannah v. Lovelace-Young Lumber Co., 159 Ga. 856 ( 127 S.E. 225). The bonds in both cases were held not to be statutory bonds, because they were not made for the benefit of the parties contemplated by the statute in compliance with which they were made. In Southern Surety Co. v. Dawes, 161 Ga. 207 ( 130 S.E. 577), the bond named an entirely different class of person as being protected by its terms from that for whose benefit the statute required the bond, and it was stipulated that it was made for the benefit of no party except the obligee. This was contrary to the statute it was given under and to which it should have conformed in that the statute provided that the bond should be made for the benefit of a particular class of persons. In the first instance the Supreme Court refused to rewrite the bond by deleting the clause specifying the beneficiary it was given to protect. In the latter the court likewise refused to rewrite the bond by adding words designating those for whose benefit the bond was given.
Neither of the bonds construed in those cases contained all of the provisions of a bond conforming to the statute. They were not bonds complete as statutory bonds, to which an additional provision not authorized by the statute was added by a clause that could be declared illegal, and the structure of the bond fully complying with the statutory requirements left intact. Consequently, those cases do not affect the principle upon which we have decided the bond in this case to be a good statutory bond, and the clause attempting to add to it the provision unauthorized by Code § 23-1705 illegal.
The clause in the bond requiring the notice to be given the principal therein, Bruce Bowen, Incorporated, or the State School Building Authority, designated as the "owner" is not authorized by the statute under which and in conformity with which the bond was made. Code § 23-1705 and related sections of the Code. Hence, the condition was, under the authorities to which we have referred, invalid and unenforceable. The incorporation of the clause in the bond did not render the bond invalid or affect its character as a valid statutory bond.
Having held that the bond dealt with in the instant case was a valid statutory bond it follows that the demurrer was properly overruled.
Judgment affirmed. Felton, C. J., and Nichols, J., concur.