American Surety Co. of New York v. Gilmore Oil Co.

83 F.2d 249, 1936 U.S. App. LEXIS 2501
CourtCourt of Appeals for the Tenth Circuit
DecidedApril 9, 1936
DocketNo. 1322
StatusPublished
Cited by2 cases

This text of 83 F.2d 249 (American Surety Co. of New York v. Gilmore Oil Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Surety Co. of New York v. Gilmore Oil Co., 83 F.2d 249, 1936 U.S. App. LEXIS 2501 (10th Cir. 1936).

Opinion

BRATTON, Circuit Judge.

This is an appeal from a judgment for plaintiff in an action to recover on a bond given to secure the performance of a contract for the construction of four public highways in New Mexico.

The state entered into a written contract with Mountain States Contracting Company by which the latter obligated itself to construct the four highways. The Mountain States Company as principal and American Surety Company and American Employers Insurance Company as sureties executed their bond payable to the [251]*251state, conditioned upon the performance and completion of the contract according to its terms and for the prompt payment of all just claims for labor performed and materials and supplies furnished for and upon the work required by the contract. John J. Emmons countersigned the bond as resident agent for both sureties.' He was also president of the Mountain States Company, but he did not execute the bond on its behalf. Acting under a separate contract made with the Mountain States Company, plaintiff furnished labor and services in heating, hauling, and applying oil and cutback asphalt in the construction of such highways, the last being performed on January 15, 1933. After allowing an offset of $456.22, the net amount due and unpaid for that work was $7,205.12. Thirteen days after the last work was done, that is on January 28th, the attorneys for plaintiff in California wrote Emmons concerning the claim and enclosed with the letter two copies of a letter of the same date to the Mountain States Company; all of which reached him in due course of mail. The letter to Emmons is set forth in note1 and the copy which was inclosed therewith is quoted in note.2 On February 13th, thereafter, plaintiff filed with the state highway department an itemized, verified statement of its claim stating the respective dates on which services were performed and the amount due therefor; and a copy of such notice was sent to the Mountain States Company at the same time.

This action was seasonably instituted in the state court and removed in conventional manner to the United States court. The Mountain States Company defaulted and judgment was entered against it. Plaintiff and the surety companies waived a jury and the case was tried to the court. Omitting reference to findings not in controversy here, the court found that Emmons and Carl P. Nolan, doing business as Federal Bond & Mortgage Company, each acted as agent for the surety companies in the state of New Mexico; that they solicited, wrote, countersigned, executed, and delivered on behalf of such companies a large number of surety bonds and insurance policies; that they collected the premiums therefor and remitted the proceeds to the companies; that from time to time they investigated losses and made reports; that Emmons countersigned the bond in suit, collected the premium, and [252]*252remitted for it; and that he was vested with actual and ostensible authority to be served in behalf of the companies with the notice of claim. Predicated upon such findings, the notice served upon him as agent for the sureties and that served upon the Mountain States Company and the highway department were sustained in substance and in manner of service; and judgment was rendered against the sureties for the amount due with interest.

It is contended that for lack of proper exceptions the questions argued for reversal of the judgment are not open to review. Preferring to do so, we pass that contention and come immediately to the merits. The sufficiency of the notice of claim is challenged. Section 17-201, N. M.Comp.1929, requires that a bond similar in terms to the one in suit be given when the state enters into a. contract for the construction of a public highway. Section 17-202 authorizes any person having a just claim for labor performed or materials or supplies furnished upon such work to maintain an action on the bond. Section 17-204 provides:

“Serving Notice of Claim. No action shall be maintained on such bond unless within ninety days after performing the last item of labor or furnishing the last item of materials or supplies, the plaintiff shall serve upon the principal, sureties and obligee in said bond written notice specifying the nature and amount of the claim and the date of performing or furnishing the last item thereof, nor unless the action is begun within one year after the cause of action accrues.”

Compliance with the statute is a condition precedent to the maintenance of an action on the bond, but it is a remedial provision and should be liberally construed. Substantial compliance with its requirement is sufficient. The Supreme .Court of the state so held quite recently. Silver v. Fidelity & Deposit Co. of Maryland, 53 P.(2d) 459. That construction is binding here and we are in full accord with it. A notice in writing must be served upon the principal, the sureties, and the obligee. It must specify the nature of the claim, that is, whether it is for labor performed or materials or supplies furnished; it must state the amount due and the date on which the last labor was performed or the last materials were furnished, as the case may be; and it must be served within ninety days after that date. The verified notice in the form of an invoice filed with the highway department and mailed to the Mountain States Company disclosed that the claim was for labor. It stated the respective dates on which such labor was performed, the last being January 15th, and it stated the amount due. It supplied all the information required by the statute and clearly constituted substantial compliance with its provisions.

Turning to the letters mailed to Emmons, one makes reference to the other and under recognized principles of law they must be construed together in determining their sufficiency. Compare Doherty Research Co. v. Vickers Petroleum Co. (C.C.A.) 80 F.(2d) 809. They identified the contract and the bond given to secure its performance; they referred to the claim and lien of the plaintiff; they stated definitely that such claim is for labor and services— not materials or supplies; and the amount due was specified. The serious controversy is whether they specified the date on which the last labor was performed. It is stated that the claim must be filed within thirty days after the last delivery — manifestly meaning the last, service in the heating, hauling, and spreading of oil and asphalt; that such time would expire very shortly; and that the obligation must be liquidated before February 5th, otherwise it would be necessary to perfect the claim. In sum and effect, it is said that thirty days since the last service was performed had not expired at that time, but would do so soon. It is equivalent to saying that the last work was done less than thirty days previous to that date; it is tantamount to a declaration that the last service was rendered after December 29, 1932. In other words, it appears from the letters, when fairly and reasonably read, that they were written less than ninety days after the last work had been done. They will not well bear any other rational construction. The fact that they address themselves to the time at which the last service was performed and disclose that it was less than thirty days prior to their date distinguishes this case in that vital respect from Silver v. Fidelity & Deposit Co., supra. It is further argued that instead of giving notice of a claim, the letters merely indicated a purpose to do so in the future if the amount due was not paid.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

State Ex Rel. Komac Paint & Wallpaper Store v. McBride
392 P.2d 577 (New Mexico Supreme Court, 1964)
Hydrotherm, Inc. v. Insurance Co. of North America
31 Misc. 2d 534 (New York Supreme Court, 1961)

Cite This Page — Counsel Stack

Bluebook (online)
83 F.2d 249, 1936 U.S. App. LEXIS 2501, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-surety-co-of-new-york-v-gilmore-oil-co-ca10-1936.