Maryland Casualty Co. v. City of Tacoma

92 P.2d 203, 199 Wash. 384
Washington Supreme Court·Decided June 26, 1939·No. No. 27432. Department One.·Published·Cited by 20 cases

Opinion

Main, J.

January 14, 1936, The Steel Tank & Pipe Company of Oregon entered into a written contract with the city of Tacoma, whereby it agreed to furnish and install approximately 12,160 feet of steel pipe and erect certain structures. January 18, 1936, the pipe company sublet to Felix Arcorace and Joe Coluccio, doing business as partners under the name of Arcorace & Coluccio, all the work to be done under the general contract, except the fabrication of the pipe and a few minor items. The subcontract was filed with, and approved by, the city.

The work proceeded, and was completed and accepted by the city July 14, 1937. During the performance of the work, the city, under Rem. Rev. Stat, § 10320 [P. C. § 9727-1], retained, and later deposited' in court, fifteen per cent of the contract price. The amount of this retained percentage was $36,211.48. When the work was completed, there were a large number of persons or corporations that had either performed labor or furnished material which went into the work and that had not been fully paid by the subcontractors.

The sureties on the principal contractor’s bond brought an action in interpleader, making all the claimants and the subcontractors parties defendant. Three of these parties were the Gladding McBean & Co., Norris Bros., and the Contractors Machinery & *386 Storage Company. Each of these was given a judgment against the subcontractors and was disallowed any relief against the bond of the principal contractor or against the retained percentage; and, from the judgment thus entered, they appeal.

The first question is whether the appellants are entitled to relief against the principal contractor and its sureties, notwithstanding the fact that none of them, within ten days or at all, gave any notice to the principal contractor to the effect that they had commenced to deliver materials or supplies to be used in the work, as provided by Rem. Rev. Stat., § 1159-1 [P. C. § 9725]. Whether they were entitled to the relief, notwithstanding they had not given the required ten days’ notice, depends upon whether, under the contract with the city, the subcontractors were agents of the principal contractor to the extent that they had a right to purchase material and supplies and charge the principal contractor and its sureties with liability.

The contract with the city provided that the specifications which had been prepared for the work were a part of “this agreement as fully as if set forth herein.” In the specifications, under the heading, “General Specifications,” and in subd. 9 thereof, there are certain definitions, including a definition of contractor and contractor’s employees. Subdivision 33, under the same heading, covers the matter of subletting, and in this subdivision it is provided that the contractor shall give his special attention to the faithful prosecution of the work, and that he shall not sublet the whole or any part of the work to be done without the written consent or authorization of the city.

It is further provided that, if the contractor, without such previous written consent, sublets, the city, at its option, may revoke and annul the contract. A *387 later paragraph in the same subdivision provides that, when the contractor requests the city for permission to sublet the whole or any part of the work to be done, he shall file a copy of the contract which he proposes to enter into for subletting, with such information as will enable the commissioner (the city) to determine the responsibility and standing of the proposed subcontractor. It is stated that no subcontract will be considered unless the original contract between the contractor and the city is made a part thereof, nor unless the proposed subcontractor is in every way reliable and responsible and fully able to undertake the prosecution of the work which it is contemplated to sublet to him, and to complete the work in accordance with the specifications and to the satisfaction of the city.

If the definitions of contractor and contractor’s employees in subd. 9 stood alone, it may be that it could be said that the subcontractors here were, in effect, the general agents of the principal contractor; and, this being true, it would not be necessary to give the ten days’ notice, because, if the subcontractors were the agents of the principal contractor, the material and supplies would have been furnished, in effect, to it. However, taking subd. 33, which particularly covers the matter of subletting and authorizing a subcontract in accordance with the provisions thereof, it cannot be ^aid that it was the intention that every subcontractor to whom any part of the work should be sublet would be the agent of the principal contractor and could charge it with liability for material and supplies purchased which went into the work. Arcorace & Coluccio were subcontractors, and not the general agent of the principal contractor.

The appellants, in support of their contention that the partnership was the agent of the principal con *388 tractor, rely largely upon three cases from this court, which will now be noticed:

In the case of Crane Co. v. Maryland Casualty Co., 102 Wash. 59, 172 Pac. 866, it was held that there was no subletting of the original contract because the subcontract was not consented to by either the state or the casualty company. In the case now before us, as already appears, the city consented to the subletting, and a copy of the contract was filed with it.

In Cascade Const. Co. v. Snohomish County, 105 Wash. 484, 178 Pac. 470, it was held that:

“There was no subletting of the work, because the subcontract was not filed as required by the contract.”

In the case of Rachow v. Philbrick & Nicholson, 148 Wash. 214, 268 Pac. 876, the contract involved contained a provision that:

“ ‘Any sub-contractor shall be considered the agent of the contractor, and the latter shall be responsible for any indebtedness incurred by such agent’.”

We have found no such provision in the contract under consideration in the case now before us. The trial court correctly denied relief against the principal contractor and its sureties.

The next question is whether, notwithstanding the ten days’ notice was not given, the appellants are entitled to participate in the reserve percentage.

In Rem. Rev. Stat., § 1159 [P. C. § 9724] (Laws of 1915, chapter 28, p. 61, § 1), it is provided that, whenever any board, council, commission, or body acting for the state or any county or municipality shall contract with any person or corporation, such contracting person or corporation shall be required to make, execute, and deliver a bond, with two or more sureties, or with a surety company as surety, conditioned that such person or persons shall faithfully perform all the *389 provisions of the contract and pay all laborers, mechanics and subcontractors and materialmen, and all persons who shall supply such person or persons, or subcontractors, with provisions and supplies for the carrying on of the work.

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Maryland Casualty Co. v. City of Tacoma, 92 P.2d 203, 199 Wash. 384 (Wash. 1939).

92 P.2d 203 (Maryland Casualty Co. v. City of Tacoma) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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