Rott v. Standard Accident Insurance ( 1941 )

I am in accord with Chief Justice Sharpe's holding that the instant case is not a proper one for a declaratory judgment or decree.

"A declaratory judgment is not a substitute for regular actions. Washington-Detroit Theatre Co. v. Moore, 249 Mich. 673 (68 A.L.R. 105); Village of Grosse Pointe Shores v. Ayres, 254 Mich. 58; Miller v. Siden,259 Mich. 19. One test of the right to institute proceedings for declaratory judgment is the necessity of present adjudication as a guide for plaintiff's future conduct in order to preserve his legal rights. City of Flint v. Consumers PowerCo., 290 Mich. 305." Updegraff v. AttorneyGeneral, 298 Mich. 48.

However, under the facts and circumstances presented by this record, I am not prepared to agree unqualifiedly with that portion of Chief Justice Sharpe's opinion wherein it is stated: "Plaintiff's duty is first to determine the amount of his damages and then call upon the surety for indemnification." Decisions on the equity side of courts are at variance as to the right of an indemnitee to proceed against the surety before an actual liquidated or adjudicated loss or damage is sustained; and there seems to be a dearth of authority as to whether or not the indemnitee may proceed in equity simultaneously against a surety and a contractor incident to whose undertaking the bond is given. Because there is no occasion for going into this field of the law in deciding the instant case, we refrain from doing so.

Except for the brief statement that plaintiff's petition does "not present a proper situation for the exercise of this court's jurisdiction under the declaratory judgment act," the record does not disclose the reasons in consequence of which the circuit judge dismissed plaintiff's petition. It is appropriate to note that even if plaintiff's petition for a declaratory judgment or decree were instead to be considered as a bill in chancery, still it was properly dismissed as to the surety on the contractor's bond because, taking the allegations of the bill as true, plaintiff has not stated a case entitling him to relief against the surety. This is true because of the following facts and circumstances appearing in plaintiff's petition. There is still an amount unpaid by plaintiff on his building contract which is more than sufficient to satisfy plaintiff's claim in the nature of recoupment of damages which he alleges he sustained by reason of the builder's breach of his contract. This being so, the surety could not become liable in consequence of this phase of the case. And as to each of the claims of third parties in consequence of which plaintiff asserts he may suffer loss or damage, such as mechanic's liens, garnishment proceedings, et cetera, plaintiff has denied that any of these claims are valid. If they are not valid, the surety could not become liable to plaintiff in consequence thereof. Therefore it appears that even though plaintiff's case were considered as one cognizable in equity, his pleading does not state a case in consequence of which the surety could be found liable, and it follows that dismissal on the surety's motion was proper.

The order of dismissal entered in the circuit court is affirmed, with costs to the Standard Accident Insurance Company.

BUSHNELL, BOYLES, CHANDLER, WIEST, and BUTZEL, JJ., concurred with NORTH, J.