James B. Clow & Sons v. A. W. Scott Co.

203 N.W. 410, 162 Minn. 501, 1925 Minn. LEXIS 1539
CourtSupreme Court of Minnesota
DecidedApril 17, 1925
DocketNo. 24,437.
StatusPublished
Cited by7 cases

This text of 203 N.W. 410 (James B. Clow & Sons v. A. W. Scott Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
James B. Clow & Sons v. A. W. Scott Co., 203 N.W. 410, 162 Minn. 501, 1925 Minn. LEXIS 1539 (Mich. 1925).

Opinion

*502 Stone, J.

Action on the bond of a public contractor, defendant A. W. Scott Company, which admitted its own liability. After verdict against it, the surety, defendant Royal Indemnity Company moved for judgment notwithstanding or a new trial. The motion was granted and plaintiff appeals.

The plaintiff is a dealer in plumbing supplies with an established claim against defendant Scott Company, arising out of the latter’s contract for the plumbing in a public building, the Jordan School in Minneapolis. The sole defense of the indemnity company as surety is that it was not served with notice of plaintiff’s claim within 90 days after the completion of the contract, such notice, under section 9705, G. S. 1928, being a condition to recovery by plaintiff.

The Scott Company is insolvent. At the time of its failure it was the plumbing contractor on four public jobs in Minneapolis, the School of Mines at the University and the Lincoln, Bryant and Jordan Schools. The Royal Indemnity Company was surety for all of these contracts except that on the Lincoln School. It will be referred to as the surety.

The Jordan School had been accepted prior to the failure, but the contractor subsequently did additional work on it. The Bryant and School of Mines jobs were unfinished and were completed by the surety under its bond. Plaintiff furnished the plumbing supplies for the three buildings and under the Bryant and School of Mines contracts has been paid, through Mr. Melville, by the surety, for all plumbing materials necessary to complete the work and furnished by it for that purpose There is no disagreement so far and, whatever his actual authority, Mr. Melville directed the contractors, including plaintiff, to proceed, verified their bills and made good his assurance that they would be paid. As to the Jordan job, Mr. Melville’s authority to act for the surety, particularly to the extent of receiving notice of plaintiff’s claim, is denied. Thereby is raised the controlling issue.

A preliminary question challenges the sufficiency of the notice of plaintiff’s claim. As to form, it is open to criticism, for it is simply a statement of the account of plaintiff against the contractor *503 so far as it concerns the “Jordan High School.” Appended is a sworn verification to the effect that the statement is “just, correct, and true and that no part thereof has been paid.” We agree with the trial court that this statement “contains the information required by statute” and in substance meets its requirement of “written notice specifying the nature and amount” of plaintiff’s claim and giving the date of the last item.

It was considered at the trial that the evidence made it a question for the jury whether Mr. Melville had “apparent” authority to represent the surety to the extent that service of the notice upon him was sufficient. His authority is not denied as to the Bryant and School of Mines contract. Kelative to them he dealt with the Scott Company and plaintiff with no suggestion, by word or act, that his authority was so limited that any communication intended for the surety, by way of notice or otherwise, would not be sufficient if put in the hands of Mr. Melville. The surety would be in no position seriously to question its binding effect if the notice now in issue concerned either the Bryant or School of Mines contract. The Jordan job was so far in the same situation that the verdict, finding that Mr. Melville had the necessary “apparent” authority, should not be disturbed.

Mr. Melville’s letters of instructions, creating and defining his primary authority were not produced by the surety. Therefore, it cannot complain if decision be put upon the manner in which it permitted Mr. Melville to represent it. It is of course the rule that “neither the declarations of a man, nor his acts, can be given in evidence to prove that he is the agent of another.” Sencerbox v. McGrade, 6 Minn. 334 (484). But what one permits another to do may be evidence of the latter’s authority to act for the former. Moreover, in this case Mr. Melville and his stenographer were the only witnesses for the surety in its effort to show an absence of authority in him concerning the Jordan contract. His testimony is such as to make his acts in the premises clearly relevant — for example, as late as May 19, 1923 (long after service upon him of plaintiff’s notice), he was corresponding with both plaintiff and the Scott Company relative to the former’s bill against the Jordan School. On that date he wrote plaintiff as follows:

*504 “Replying to your favor of May 17th, Scott advises me that the correct amount due' on the Jordan School is $2,716.10, and that your item of $3,268.90 did not include a number of credits. Will you kindly check this over and oblige.”

Yet, at that time, if no notice had been served on it, neither the surety nor Mr. Melville had any concern with the Jordan contract and plaintiff’s claim under it.

In view of these circumstances, we consider it a question of fact whether Mr. Melville had such implied and therefore actual authority as would make service of notice upon him notice to his principal, the surety. An affirmative answer is justified under the rule that ordinarily an “agent’s powers are prima facie co-extensive with the business intrusted to his care and will not be narrowed by limitation not communicated to those withi whom he deals.” Koivisto v. Bankers & M. F. Ins. Co. 148 Minn. 255, 181 N. W. 580.

But the jury was limited to a finding of “apparent” authority in Mr. Melville and their verdict was set aside and judgment ordered non obstante because the learned trial judge was of the opinion, expressed in a characteristically searching memorandum, that plaintiff’s notice of claim was ineffectual because served neither upon the commissioner of insurance (as permitted by statute), nor an agent “actually appointed and representing” it. Decision was put upon the principle of the cases dealing with service of process upon agents of foreign corporations, particularly Mikolas v. Hiram Walker & Sons, 73 Minn. 305, 76 N. W. 36; Baldinger v. Rockford Ins. Co. 80 Minn. 147, 82 N. W. 1083; Wold v. J. B. Colt Co. 102 Minn. 386, 114 N. W. 243, and Nienhauser v. Robertson Paper Co. 146 Minn. 244, 178 N. W. 504. Because, as so clearly stated in the Mikolas case, the purpose is to secure jurisdiction of the person and hence there must be due process of law, service of process upon a corporation must be upon an agent having in fact a representative capacity and derivative authority, * * * and not one created by construction or implication, contrary to the intention of the parties.” Attending and conditioning the service of a summons are the rules of due process of law. They have nothing to do with mere notice to one that another has against him a claim which may or *505 may not be sued upon. The notice is not process and its service does not confer jurisdiction. The one now involved is a creation of statute and its purpose is not to establish any legal hold upon the person of the surety but solely to reach its knowledge or that of someone acting for it in the business in hand.

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Cite This Page — Counsel Stack

Bluebook (online)
203 N.W. 410, 162 Minn. 501, 1925 Minn. LEXIS 1539, Counsel Stack Legal Research, https://law.counselstack.com/opinion/james-b-clow-sons-v-a-w-scott-co-minn-1925.