United Bonding Insurance Co. v. WS Newell, Inc.

232 So. 2d 616, 285 Ala. 371, 1969 Ala. LEXIS 999
CourtSupreme Court of Alabama
DecidedNovember 20, 1969
Docket3 Div. 380
StatusPublished
Cited by23 cases

This text of 232 So. 2d 616 (United Bonding Insurance Co. v. WS Newell, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Bonding Insurance Co. v. WS Newell, Inc., 232 So. 2d 616, 285 Ala. 371, 1969 Ala. LEXIS 999 (Ala. 1969).

Opinions

SIMPSON, Justice.

This is a suit wherein W. S. Newell, Inc., as plaintiff, claimed $40,000.00 damages for the breach of a condition of a bond made by United Bonding Insurance Company, as surety, with Hankins & Si-gars Trucking Company, as principal.

The case was tried to the Circuit Judge below who made special findings of fact, at the request of the appellant, as provided by Title 7, § 262, Code. The facts of the case, taken from the trial court’s opinion, were as follows:

On March 10, 1966, W. S. Newell, Inc. had a subcontract with Newell Roadbuilders, 'Inc., a general contractor, under the State of Alabama for the construction of a segment of interstate highway 1-65 near Bay Minette, Alabama, to manufacture, [374]*374haul and install asphalt pavement on that project. On that day the plaintiff subcontracted with Hankins & Sigars to supply all trucks needed to haul the asphalt produced by it from its (the plaintiff’s) plant site, some miles from the project, to the interstate project.

On May 5, 1966, Hankins & Sigars furnished performance and payment bond in the amount of $82,660.00 in favor of New-ell Roadbuilders, Inc., executed by United Bonding Insurance Company, bearing its corporate seal, and countersigned by Stewart R. Pollock of St. Petersburg, Florida. Attached to the bond was a power of attorney, also bearing United’s corporate seal, which authorized Mr. Pollock to execute on behalf of United, the above bond in favor of Newell Roadbuilders, Inc. The power of attorney stated that it was given under the authority of a resolution of United’s Board of Directors which authorizes the president to appoint agents “to execute, on behalf of the Company as Surety, bonds and undertakings, recognizances, contracts of indemnity, and other writings obligatory in the nature thereof.”

When the bond was delivered W. S. Newell, Inc. discovered that the name of Newell Roadbuilders, Inc. had mistakenly been asserted as obligee, and it requested that this be corrected. On May 24, 1966, Mr. Pollock issued a rider to the bond, bearing United’s corporate seal, which changed the name of the obligee to W. S. Newell, Inc.

The trial court noted that an examination of the power of attorney disclosed that two typewriters were used in typing the typed portions of the bond. Mr. Pollock’s name and his maximum authority were typed on one machine, while the specific information relative to the bond in suit, i. e., the names of the principal and obligee, and the dollar amount of the bond, were typed on another machine.

The trial court concluded that this difference plus the broad and unlimited authority granted by the corporate resolution convinced the court that blank powers of attorney were furnished to Mr. Pollock, and that he was authorized to issue bonds to whomever he saw fit and to fill in the pertinent information concerning the principal, obligee, and the amount of the bond in blank spaces on the power of attorney.

United contended that the bond was void because (1) the power of attorney limited Mr. Pollock’s authority to execute a bond in favor of Newell Roadbuilders, Inc.; and (2) Mr. Pollock was not a licensed agent for counter-signature in Alabama.

Hankins & Sigars commenced work under its subcontract, hauling materials from March 15, 1966 to June 28, 1966, at which time it abandoned its work and refused to haul any additional materials. W. S. Newell, Inc. then contracted with Robinson & Bethea Trucking Company to complete its hauling requirements.

The finding was that during the course of its employment, Hankins & Sigars never complied with its contractual obligation to “at all times maintain sufficient men, materials, supplies and equipment and supervision on said job and prosecute work with such care, diligence and promptness as will not cause delay in the progress of CONTRACTOR’S [plaintiff’s] work * * * ”

In this connection the evidence was that the plaintiff’s asphalt plant, which was located some miles from the interstate project, had an average daily productive capacity of 1,500 tons. However, it could produce no more than Hankins & Sigars’ trucks could haul away, and if Hankins & Sigars did not maintain sufficient trucks for the orderly flow of production, then the plaintiff of necessity would have to retard its production to keep pace with the availability of trucks. As the length of the haul from the plant to the construction site increased, the number of rounds which a given truck could make per day decreased, thus creating the necessity for additional trucks to keep up with plant production. The finding of [375]*375the court was that even during the initial stages of the job, when the haul was the shortest, Hankins & Sigars was deficient in trucks needed to adequately handle the ■productive capacity of the plant. As noted by the trial court, “Indeed, the evidence was without serious dispute that, despite repeated complaints and demands by the plaintiff, Hankins & Sigars was short by three to five trucks per day of the number of trucks needed to keep up the steady flow of production”. In addition the trucks on hand were plagued with breakdowns and remained idle for long periods of time due to lack of supervision by Han-kins & Sigars. Also, because they were not paid their agreed compensation by Hankins & Sigars, the truck drivers struck for two full days in early June.

It is not disputed that the plaintiff was ■delayed by lack of trucks and by truck breakdowns. The only question involved liere, and below, was the extent and effect •of those delays.

Defenses interposed by appellant below were the following:

(1) Invalidity of bond sued on. — The appellant contended that the bond sued upon was void because (a) the power of attorney limited Mr. Pollock’s authority to execute the bond in favor of Newell Roadbuilders, Inc.; and (b) Mr. Pollock was not a licensed agent for counter-signature in Alabama. The trial court concluded that the bond was valid.

(2) Contract modifications discharged United of any obligation under the bond.— It was next contended that certain modifications of the contract between plaintiff and Hankins & Sigars had the effect of ■discharging United from any obligation under its bond. The contract modifications relied upon were (a) that the hauling requirements for asphalt or plant mix were reduced, as a result of a state change in .asphalt thickness, from the stated contract quantity of 135,000 tons; and (b) that the •plaintiff and Hankins & Sigars agreed to .a change in the contract whereby Hankins & Sigars would be paid for work performed each two weeks rather than once a month; and (c) that the plaintiff agreed to reduce the retainage on earnings from seven and one-half percent as stipulated by the contract to three and one-half percent.

The trial court found in favor of the plaintiff and fixed damages at $31,481.67. The defendant appealed.

The contentions of the appellant on this appeal are as follows:

(1) That the trial court erred in its conclusions with respect to the validity of the bond in suit insofar as the same applies to the appellee. It is the position of the appellant that the bond in evidence was not sufficient to validly bind the appellant to W. S. Newell, Inc, as obligee for the following reason: that the power of attorney which was attached to the original bond which was erroneously written to Newell Roadbuilders, Inc.

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Bluebook (online)
232 So. 2d 616, 285 Ala. 371, 1969 Ala. LEXIS 999, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-bonding-insurance-co-v-ws-newell-inc-ala-1969.