BLACKBURNV. TURNER -. -[187 - • 2 • BLACKBURN V. TURNER. 4-3044,
Opinion delivered June 19, 1933 AUTOMOBILES—INJURY TO GUEST JURY QUESTION.—On conflicting evidence as to whether an . injury to a guest by the overturning of an intemobile at i curve' Was eauSed merely by the wei cOndition of - the Pavement or by deeridant's negligence in driving tub fast, ' the jurY's 'finding Wa's conclusive. Appeal from Franklin Circuit Court, Ozark District ; J. 0. Kineannon, Judge ; affirmed. Buzbee, Pugh Harrison, for appellant. Partain ce Agee and Vincent 111.Miles„ fOr . appellee.
McHANny , J. Only a. question of. fact is involved in this appeal. Appellee was a vest in .appellant's car,
ARE.] MARYLAND 'CASUALTY -CO.-V. DAVENPORT'. 663 with others; when She was injured, -a,'S alleged bY herovhen "abOut four miles' . West of-- the toWn of'OZark, the defendant carelessly and negligent& drove-*said antomobile at a high, negligent, dangerens 'and unlaWful rate of speed and in a careless and negligent manner . and thus caused said ; automobile to skid , and turn over several tinie-S." -A trial re'Sulted z in 'a Verdiet and judoMent against appellant in the sum of $3,000. • • Appellee testified thaf she did : not-know what Caused the accident ;, that the' car . * Skidded 'and went iii the ditch and , turned over a .tiine or twe ;• that she 'did hot know hoW fast appellant Was' df riVg. t ' 'Appellant 'testified ;that he wa.A.nut-a fast driver, WaS • driVing at-the.time about 20 miles' Per hOiir, around:a -curVe On a wet road about 40 feet wide, aha that the car ' skidded abOnt 75 fo 100 feet before going into the ditch.. He was 'an eperieneed driver. • .The mechanie *who . went fo get. the car after the wreck testified there were no , skid marki; that it seemed to him, from *an examinatiOn of 'the 'situation shortly afterWards, that appellant simply. failed , tO take the curve and drove off' the highway and . . into the ditch. We think this 'éVidence was Sufficient. to' take the case to the . jury as to whether apPellant , waS . driV* ing in a care- leSs and 'negligent, 'Manner, whether ,he,was giVing t,, . ct the driving Of the • _car the atteUtiOU neeeSS :a ry' t:'the time. The court instructed the, jury 'that,:if the aecident wag Caused solely by the' skidding 'of 'the antoth o i bile and ap7 pellant was not at fault in that respect, the verdiet should be for appellant.. • * Since 'the evidence ' was sufficient to take' the •case to the jury, and no other error being assigned or . relied upoo, the judgment Must be affirnied. MARYLAND CAsuALIT bOMPANY V. 4-3110-1142-13 , Opinion delivered June 19, 1933 COURTS—SUIT ON GOVERNMENT CONTRACTOR'S BOND.—The provisions of the Hurd Act (40 . USCA; § 270), giving exclusive jurisdiCtion to
664 - MARYLANIi CASUALTY CO. v. DANENPORT. - [187 the Federal courts of actions for material furnished under government contracts, are applicable to a suit by materialmen who furnished material to contractors against the surety, of such contractori, 'who filled to comply With their contract, whereupon the suretY, 'by a supPlementäl contract, undertook to carry out the terms of the contractors' bond. • Prohibition to philliPs Circuit . Court ; W. D. baven-poit, Judge ;- writ granted.. . Brewer ((Cracraftitor._petitioner. • A..111..a6aie, for respondent. • • . . , B . , UTLER, J. Four . 'suits.• were instituted in tbe . .Phil-lips . Circuit Court against the . Maryland Casualty Corn. pany to ,reeover the . Value : of work , done and , material furnished . by the plaintiffs . to tynch . Bros., while they were engaged . in the construction of a portion s of the levee system along the right bank of .the Mississippi River near Ifelena. • The Casualty . CornpanY demiirred to the jurisdiCtion of the court, and; the demurrer being overruled, filed its application for a • writ of . prohibition hi each ease; alleging the - sole and exclu s . ive jUrisdiction of the United States . District Court- over.the subject-matter, and making • as a Part .of • itS several petitions a &Tv of the complaints filed' in the cases, the original contract entered into betWeen . .LYnCli Bros.' . 'and the United States GoYer . nM . e nt;:the bond execrited t6, the CaSualty Com- pally, arid . a . . Stipplemental agreeinent later entered into betWeen . the'GoVernnient, LYnch Bros.. and tbe Casu „ a l . t y Company... If is the contention of the petitioner that the liability of the Casualty , Company, . is . predicated upon the bond first executed:to , guarantee , the„ performance . by Lynch Bros. • under theif contract to , build the levees and to pay the laborers and inaterialmen. The respondent contends that the several causes of action are grounded on the supplemental agreement by the terms of , which, it is inSisted, 'the Oasrialty TompanY became primarily liable for all of the debts incUrred by Lynch Bros. without regard to the terms of the bond . executed by it. It appear§ from the petitien and the exhibits that Lynch Bros. entered into a contract with the -United States Government on October 31, 1931, to build a cer-
ARK.] MARYLAND CASUALTY CO. v. DAVENPORT. 665 tain portion pf the levee :system along- the Mississippi River in Phillips County, Arkansas. .At that time the Casualty Company executed a bond as provided 'by the Federal statute, now §_270,. title• 40, of ,the.tTnited States Code • Annotated, generally designated-. as the "Hurd Act." This bond was executed in the penal sum of $15,000,. conditioned that the contractors should perform the work as specified, and that they should : promptly. pay, all persons sufTlying. labor and material ' in the prosecution of the , work provided for in the contract.. The contractors began the performance of the;contract and con-, tinued until July, 1932, i When. -:the GoVernment, becoming disSatisfied with the manner in which the contractors. were perforMing the , work , exercised the . right given it in the contract and ,notified the contractors that ,they, had failed to exercise proper diligence, and . ihat it would take over the contract, finish the work,, charging to the: contractors and. the surety any excess costs , that might. be occasioned. 'The surety , thereuponressed the de-, sire • to ta6 over, the , contract. and complete the work.. This waS acceded to, and- a writing was executed designated as a "suliplemental agreement . " • The petitioner insists -that the. , obligation of the caS-, [tally company to pay the-debts incurred by Lynch-Bros. during the time they were . engaged-in the performance of- the ,work and before- the , :Casualty Company took it. over- arises . out of . the-- bond , which -it . eXecuted to. the United, States Government -, and that; . because . of this, the-jurisdiction to hear .and . .determine the controversy is in the United States . District Court under the terms of. the-Hurd Act, supra. , This act provides that, if ,the- general government . does not bring .suit within. six .rnonths from. the , completion of the , work, those. supplying..labor material will be furnished a certified copy . of the con: tract and bond by the department of the Government under whose direction the work is done,. and "he or they shall haye a right of action and shall be and are hereby authorized . , to bring suit. ,in the name of the United, States, in the district court of the United States in the district in which said contract was to be performed and
666- MARYLAND : CASUALTY CO. V. DAVENPORT. -[187 - exeeuted,. irreSpective of the -amount-in controversy hi said suit and not elsewhere, fOr his or their use and. benefit against-said contractor and his sureties." The act further proVides. that 'there shall be only -one Suit in Which all - creditors must intervene. and -have • their rights adjudicated upon proper notice. The respondent does not question the propriety of the remedy invoked, and concedeS • that, under the provisions of the • statute referred . to, supra, as- cOnstrued the Supreme - Court of the United - States' in Texas, etc., Co.. v. McCord, 223 U. S. 157, .34 S. Ct. 550; Miller v.. American Ronding Co., 257 U.'S. 247, 42 S. Ct. 98, rind United States v. Congress -Construction Co., 222 U. S. 199; 32 S. at...44,•in suits to enforce liability arising out of the obligationS Of a bond given under the provisions Of • that act; jnrisdiCtion is:lodged hi the United 'States District Courts and - not elseWhere. Respondent contends, however; as - previotisly nOted, that the suits filed* in-the PhillipS'COunty 'Circuit 'COUrt are not' based updn the bond executed by the casualty coMpany, but upon the contract- of July 23, 1932, in Which it iS claiined the Casualty Company agreed , with LYnch Pros; to • assitme their place in the .original contract and to complete the -same, paying the, debts incurred by them while they were engaged dn'constructing -the levee; that this had•the effect of substituting the • Casualty Company as the principal contractor and subjected it to' suits in any ceurts of superior general jurisdiction. • Article 9 Of the original contract between Lynch BrOs: and the . United States GoVer . 7thrient. provides the' c'ontraCtor refuse s. or: fails to pro'secute the Work, or any separable part thereof; with such diligence as will hi g urd'its- 'completion within -the' time -specified -hi article *I, Or any Oxtension thereof, of fails to complete said work Within 'stch tiine, the GOvernnient may, by written notice' to the contractor-, terminate his right to proceed with the work or such part of the work as to which there has been delay. - In such . event the Government may take over the work and prosecute. the same to completion by contract or otherwise,n.,nd the contractor and his
ARK.] MARYLAND 'CASUALTY CO..-22. 'DAVENPORT. 667 sureties-shall, be liable. to-the .Governinent for any excess cost occasioned the . Government thereby. If the, coil.- tractoi"s, 'right to proceed -is' so tdrminated, the 'Govern, ment may take possession :of 'and .utilize in coinpleting the-work-such -materials, -appliances and plant'as.may.be op the site of :the work-and .necessary, therefor. . If the Government does not :terminate the„right .of the,,contractor to proceed, the contractor shall. continue -work, in which event the actual damages for tbe delay will: be impossible to determine, and. in lieu thereof the con-. tractor shall.pay to the GoVernment as fixed, -agreed and-liquidated .damages for ea: b ealendar day of delay until the :work is completed or accepted, the. amount as . set forth in the. specifications or accompanying papers and the contractor and his . .sureties shall be liable . for the amount thereof." . By the terms of the bond; the Casualty CoMpany undertook to -guarantee that the . contractors -would: perform and fulfill all of the undertakings, covenants;• etc4. of _the contract, and that-they..should promptly . make payment to :all- persons, furnishing'labor and •thaterial in. the prosecution, of the work.•.,.The supplementalagreement refers to the contraCt fir -st entered-into.between the7Gov-ernment and . Lynch Bros., reciting ,the• execution of the bond with the..Casualty Company-as 'surety,. andmakes said contract-and said :bond a part. of the agreethent .as 'if physically attached and :cobied . hereim''. 'It:further recites the inability-of Lynch Bros. to complete the wOrk within the time limited in the'contract, and that "it is,tto the manifest interest of: the United States of -America, to the contractor and to the ,surety on the-contractor's bond, that arrangements be made immediately to put on sufficient forces , to complete the. work called. for by, said con-'tract within the time-therein - It further recites .the willingness of the contractor :and the . United..Sta-tes :Government to . permit the surety:to take over and . complete the . said contract, and, cOntinuing, prOvides .".Now therefore it is mutually understood'and,agreed by and ,between James and: Leo. Lynch,: partners. doing business as Lynch Brothers, .hereinafter 4esignated
668- . MARYLAN-D-OASUALTY - CO;- V. DAVENPORT. [187 tractor,' and the United States of America; hereinafter designated 'Government,' and Maryland Casualty Company of Baltimore, Maryland, hereinafter designated 'Surety' . as supplemental to said original -contract between said -government and contractor as follows, to-wit : '1. :''That'effective 'at six o'clock P. M.,. July 23'; 1932, by and with the 'consent of the Government, said aforesaid contract for constructiori of earthwork in the White River Levee District is turned over by said contractor to the said Maryland Casualty Company, its surety, and by these presents the said surety company hereby agrees to perform all the work called for by said contract according to the terins thereof and the plans and specifications made a part thereof. "2. It is further agreed that the surety . shall receive payment for all work . performed and Materials furnished pursuant to the ternis of said original contract of October 31, 1931, between the contractor and Government; and that the surety shall be paid all retained percentages of labor and/or materials thereto before . furnished by and due to Said contractor under the terms 'of said original -corifract, arid all sums due said contractor; payment of•which is withheld by the Government Pnrsuant to the terms of said original contract, it always-being understood' and agreed that the governMent shall have the right to-retain -any payments due to -it as dechictions under the original contract in accordance with the terms and ,. provisions thereof until due there- under. "3.- ' The snrety agree§ and- undertakes that -it will take oVer'said original' contradt as of six o'clock P. M. Saturday, July 23; 1932, and to perform and fulfill all the lindeilakings, covenahtsy terMs; *conditions and agreements of said contract during the original terth of -said- contract as therein stipulated-. The surety further agrees, on final aPproval of " the work by. the contracting officer designated in said original contract and receipt by it of final payment of sums due thereunder, to pay -or cause -to be paid, under direetion of- said-contracting officer, any balance due said
ARK. MAR YLAND CA SUALT Y ' CO. v. DAVENPORT. 669 original contractor; after payment of costs of comple-lion, and all outstanding bills for labor and/or materials, and/or *serVice.s performed or rendered . and/or amountS chargeable against the carrying out of the contract of the original contractor aiid :the performance of the work undertaken by it under said original contraeL". Wben , the etigirial contract;the bond mid the suppleMental :agreeMent are considered : together, as they mist be; it iS clear that the cOntentionithat the 'casualty company took the place Of the 'original contraCtors -Can' be sustained only as to its operation after the execution of the supplemental agreement; and . its' liability extended onlY as to such indebtedneSs as might be incurred in:the proSecutiOn of the work after that date; its relation -to the princii:ialS . 'iii the' 'original . 'dentract remaining 'Unaltered as the liabilitY underthe first centraet and bond te' Secure its s perforniance is' expressly recognized . mid ill.- corporate& in the agreement.- 'Its Tioility f • Or the payment of 'all material- which*had'been furnished or work done in the prosecution' of the'coitStruction before 'the date of the supplemental agreeniefit was' already fixed and the paymeht guaranteed up' to • an 'amotitit specified in the bond. Vie argament . advanced as arek s -en fel' the extension of the liability of the casualty compaitYTO 'the effect that it . received a valuable ConsideratiOn ler entering'into the' suppleniental agreement in that-it- received sOme six or eight thousand dollars . already -earned by Lynch Bros. is without: merit,- as ' it is apliarent 'under the terms of -the . agreement that whatever sums it received, earned by the, original contractor; Avere-paid to it only fel- the-purpose of beitig• disbursed:in payMent for material- or •abor, and .auy:sums earned above the actual cost-of the construction were,.by the. express terths of_the agreenient, to be - paid, to the -original, contractor. . We are of the opinien there-fere' that-the clainth sued 'on are liabilities of the' casualty' conipany only beCause of its Undertaking in the bond . , for it' is' stated and not denied that they are ' for material-and labor furnished to Lynch Bros. before the' Casualty Company took over the contract under the supplemental- agreement. The pro-
670 MARYLAND -CASUALTY - CO.- V. DAVENPORT. [187 visions of the -Hurd Act. are therefore applicable, and the claimants must . have their rights. adjudicated in the United -States District -Court, the Phillips Circuit Court is without -jurisdiction over the subject-matter, and the petitioner is entitled to the relief prayed. Let the writ be granted... - MEHAFFY, (dissenting). I cannot agree with the majority in granting a wrii. of prohibition against the judge, thereby preventing him from trying the case brought by the plaintiffs against the Maryland Casualty Company. . . Section- 270 -of title 40, -U. S. Code, Annotated, provides for persons who enter into contracts with- .the United States for certain purposes, giVing, a bond with good and . Sufficient securities. The section also provides that persons furnishing labor or , Materials shall have a right to intervene and be made parties to any action. instituted by the United : -States on the .bond. of the contractor. The section also, provides that, if suit is not brought by the United States within six months, persons supplying the contractor with labor or materials shall have a right, of action: and are authorized to. bring suit . the. district court of- the United States, ',and - not elsewhere. It will be observed that this provides fOr a suit. oh the bond 'of the contract. The suits in -this -case. were not on the bond. :The facts are stated in the .thajority opinion, and will.not be: reStated . here: . One of thh sections of the supplemental' contract is as follows : " The, surety agrees and undertakes that it will take over said original contract as of six o'cloCk P. M., Saturday, July , 23, 1932, and to perform and fulfill all the undertakings, 'covenants, -terms; conditions-and agreements of said contract during the original term-Of said contract as therein stipulated." In section 4 the surety company agrees to pay or cause to be paid any balance due the original contractors after payment. of costs Of completion and all outstanding -bills for labor or materials. It is therefore expressly agreed that it will- take the place of the contractor; and
ADK.] MARYLAND CASUALTY CO. V. DAVENPORT '. 671 ' not only complete the work, but parall outstanding bills, bills•that were outstanding at the time it took over the contract. It . was-uPon this:agreement, and upon the taking 'over •the contract by the surety Company; that. these suits were based: 'They' were-not ! based on the bond, and the Federal Court would have no jnrisdiction,.and there is no .authority under the Hurd Act for bringing a suit of this kind in the . Federal Court...The Hurd Act author.: izes suits brought in the .Federal Court where the suit is on the bond. •• - A suit was' brnught in the State court in N f ew York on i . n agreement 'of the -eontraaOr to give bond.- He had entered into the contract . and pi'omised to giVe the bond required . by the Hurd' Act, but had failed to do So.. The city:court held that there w0 rio rknedY whatever. The ce was then nppealed, arid the' appellate term thok thd view that the dontractofs ' obligation was independent of the .. bend, Which wa§ important only as fixing-the obL ligation' and defining the 'procedure in an action against the SuretT The judgment of the 'city court was re-, versed,' and the cauSe was then tridd in -the appellate diVision, i.dVdrsed the Judgment of the appellate term holding that . the Proper reMedy wits an ''actiOn the Federal Courts, the procedure to be the sAthe AS- if the'bona were in existence.. :The Codrt Of . Appeals - in ' .Lrew York: held . that the judgment . of the appellate terin Must be nffii-me, that is, that the cantractorS' 'obligation was independent 'of: the bond; -and that the suit, was propeHy . brought.in the, Stiite 6thirt. -" • • " ,As I have already ,said, this . suit was not brought,my t4e :hond, -hut w'as brought . on. the . supplemental . contract. nether the plaintiffs,Were entitled to, recover on that ontract is not involved...Certainly ,the.bond ,was not in. any way involved, and, that being true; the. circuit; eourt had jurisdiction. It, is wholly immaterial Whether: the plaintiffs could have recovered, but, under • the pleadings, the suit, I think, was unquestionably within the jtirisdic-tion of the circuit court...
672j - MARYLAND CASDALTY. CO . v. PAVENPORT. [187 Wheh the -contractor failed-and- the surety- took- the place of the contractor, it becameliable as a contractor, without any regard to-whether -it had signed' a bond. or not.- Besides that, it expressly agreed to-pay_ all. claims: It was.not liable for all claims under bond, but was only liable for $15,000. The -surety tOcik over the- contract for its -protection. It -received a- eonsiderable sum of money that was due- the contractors,- and received the retained perdentages, and whatever prat it made by_completing the work. I think the effect, of the : majority opinion . is .prae-tically the same as, the holding of the city _court in New York in the case above xited.. : This is, that the material furnishers and laborers were without remedy. - *contract was made for the . cOnstruction of a court, house. in Lenawee County, Michigan,.and bond was given with sureties for the due performance of the contract. The contractors proceeded,..for a time,- just as, Lynch Bros..did.in this . case, and. then failed, , and the sureties for their own protection took an . assignment of :the . contract and went on : with the work. The . claims . -sought to be collected were claims . against the original:contractors, - and not ,contracted,after the sureties took charge. The court said: . . "In our opinion that is an. immaterial .fact.. The relators step into the shoes of the contractors." Knapp v. Swaney, 23 N. W. 162; . Unite d -Slates' to 'iisC f Zam-betti v. Anferican Fence Const. Co., 15 Fed. (2d) 449 • "'The claims and demands of the casualty .company, the plaintiff in this action, are ba'sed in part upon the provisions of the contracts made by the Board 'of Water ComMissionerS 'with' the Loyd Conipany, for Which the:-bonding bohapariy. was surety: : All the facts lead to the' cohclusioh that What'happehed in . this- Case was that the surety company elected to' coMplete the contracts of its- principal. When it_ did so, it took the place of the contractor." Maryland Cas.'Co. v: Bd. of Water Coin!rs, 43 Fed. --(2d) 418. ,' "The surety wa$_ already engaged in- carrying out the original contract, and it continued therein to the end.
When the surety •elected to • complete the contract, it• took the place of the contractor. The law is not that it thereby only .took the possible benefits of that position. Its position was no• different to that of an assignee of the contract. Such assignee would take subject to all prior mechanics' liens ; and so did the surety." Harley v, Mapes-Reeve Const; Co., 68 N. Y. .S..191. 'When contractor stopped, surety siniply took its place and went on to finish the• work. What its 'rights may have been if it too had• declined to . finish, and commissioners had comPleted, are matters and question's not before Us. What did . happen was that the sUrety stepped into -the contrActhr's shoes and finished the work, and neither surety nor commissioners were 'in any different position than if contractor had itself finished the Work and called on the coMmissioners to settle." Fidelity & Deposit Co. of .Md. v. Hay, 9 Fed. (2d) 749'. I think it Would be unjust and unreasonable to hold that the study company ' could take over the work when the contractors ' failed, "in:the planner' :that the surety' conipany did in this caSe, and then be relieved from liability or require :the' parties to go into Federal court, where they would only get their proportionate share of the $15,000, • it they' coUld, in fact, recover anything,. I think the writ should have been denied.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.