Aberdeen State Bank v. Spokane Paving & Construction Co.

172 P. 827, 102 Wash. 68, 1918 Wash. LEXIS 888
CourtWashington Supreme Court
DecidedApril 30, 1918
DocketNo. 14635
StatusPublished

This text of 172 P. 827 (Aberdeen State Bank v. Spokane Paving & Construction Co.) is published on Counsel Stack Legal Research, covering Washington Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Aberdeen State Bank v. Spokane Paving & Construction Co., 172 P. 827, 102 Wash. 68, 1918 Wash. LEXIS 888 (Wash. 1918).

Opinion

Fullerton, J.

In August, 1913, the county of Chehalis, the name of which has since been changed to the county of Grays Harbor, entered into a contract with the Spokane Paving & Construction Company by the terms of which the construction company agreed, for a stated consideration, to make certain designated improvements on a county road in that county. The contract provided that payments should be made in county warrants, partially as the work progressed, on monthly estimates not to exceed seventy-five per centum of the amount earned, and the remainder within ten days after the completion of the contract and its acceptance by the county. On the execution of the contract, the construction company entered into a bond to the state of Washington with the respondent Aetna Accident & Liability Company as surety, conditioned as required by statute. After entering into the contract and giving the bond, the construction company made an arrangement with the appellant, Aberdeen State Bank, by which the bank agreed to advance sufficient money to take care of the pay-roll of the construction company and take in repayment of the money advanced county warrants received by the contractor on the monthly estimates. Under this arrangement, money was advanced by the bank, but repaid only in part, the amount unpaid amounting on December 24, 1913, to $1,028.58. On the last named date, the bank took from the construction company an assignment of the reserved payments withheld by the county and filed the same with the county auditor. As this assignment is material in the consideration of the questions raised by the appellant, we set it forth at length:

“Assignment of Warrants.
“To the auditor and treasurer of Chehalis county, Washington, and to the county commissioners of said county:
[70]*70“For a valuable consideration, the Spokane Paving & Construction Company, a corporation, does hereby set over to the Chehalis County Bank, a corporation, having its principal place of business in Aberdeen, Washington, warrants held back by the county of Chehalis, state of Washington, in the sum of $1,028.58, being the amount reserved by the said county under its contract with the said Spokane Paving & Construction Company for the construction of a portion of the highway in Chehalis county, known and designated as the Hanson road, and said Spokane Paving & Construction Company hereby directs and authorizes the auditor of Chehalis county, Washington, to turn over to the said Chehalis County Bank warrants in said Sum, when the same becomes payable. This assignment to the said Chehalis County Bank is made in good faith, not as a release or satisfaction, but for the purpose of securing the payment to the said bank of the sum. hereinbefore mentioned, which said sum of money is being advanced by the said bank to the Spokane Paving & Construction Company to pay for labor done and performed for the Spokane Paving & Construction Company, in the construction of said highway.
“In Witness Whereof, The said Spokane Paving & Construction Company has caused its corporate name and seal to be hereunto subscribed and affixed, and these presents to be executed by its officer thereunto duly authorized, this 24th day of December, 1913.
“Spokane Paving & Construction Co.,
“By Henry L. Lilienthal, President.”

The construction company only partially completed the work, finally abandoning it early in the month of February, 1914. After the work had been so abandoned, the' respondent surety company took over the work and completed it to the satisfaction of the county on September 8, 1914, at which time the work was finally accepted. On the completion of the work, the county paid to the contractor the unpaid portion of the contract price, including the reserved part earned by the construction company covered by the appellant’s-[71]*71assignment, leaving its claim unsatisfied. In completing the work the surety company expended over and above the amount it received the sum of $3,641.40, suffering a loss in that sum.

In this action the appellant sought to recover against the county and the surety company for its unsatisfied claim. In the court below it relied for recovery against the county upon the assignment before set forth, and against the surety company upon the same ground, and the further ground that its claim was a charge against the bond of the surety company under the provisions of the bond obligating the surety to pay “all just debts, dues, and demands incurred in the performance of the work” in the payment of which the contractor should make default. A formal statutory notice of its claim was filed by the appellant with the county auditor on February 9,1915.

On the facts shown, the trial court held that there could be no recovery, either against the county or the surety company. In this court the appellant concedes that the judgment is correct in so far as it rests upon the assignment feature of the written assignment before set forth, under the rule of this court announced in Title Guaranty & Surety Co. v. Coffman, Dobson & Co., 97 Wash. 211, 166 Pac. 620, and the cases there cited. It concedes also that the formal notice of its claim filed with the county auditor is insufficient to bind the surety, because given more than thirty days after the completion of the contract and the formal acceptance of the work by the affirmative action of the county commissioners. Its contention now is that the assignment itself was a sufficient notice of the claim against .the surety and, being given in time, permits a recovery against the surety as for money advanced by it to pay just debts, dues, and demands incurred by the contractor in the performance of the work.

[72]*72The section of the statute relating to notice necessary to bind the surety reads as follows:

§ 1161.

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Related

Robinson Manufacturing Co. v. Bradley
129 P. 382 (Washington Supreme Court, 1913)
Rodgers v. Fidelity & Deposit Co. of Maryland
154 P. 444 (Washington Supreme Court, 1916)
Title Guaranty & Surety Co. v. Coffman, Dobson & Co.
166 P. 620 (Washington Supreme Court, 1917)

Cite This Page — Counsel Stack

Bluebook (online)
172 P. 827, 102 Wash. 68, 1918 Wash. LEXIS 888, Counsel Stack Legal Research, https://law.counselstack.com/opinion/aberdeen-state-bank-v-spokane-paving-construction-co-wash-1918.