New Haven v. Eastern Paving Brick Co.

In rendering judgment for the plaintiff against the Eastern Paving Brick Company for $12,000, and in favor of the Fidelity and Deposit Company for costs, the trial court held that the plaintiff, by reason of the failure to give notice to the surety of the condition of the pavement within the time provided by the contract, and until June, 1902, lost its right to recover of the surety the money so expended by the director of public works in relaying the pavements; but that as to the contractor, whose representative had in 1901 learned, as above stated, of the condition of the pavement, the notice given was reasonable and sufficient.

There was error in the judgment rendered. This is an action upon a bond, and not upon the contract between the plaintiff and the Eastern Paving Brick Company, to which the Fidelity and Deposit Company was not a party. The surety is liable if it appears from the facts found that any assigned breach of the condition of the bond has been proved. In considering the evidence in order to determine whether there has been such a breach of condition of the bond, it became necessary for the trial court to examine the various provisions of the contract, but the condition of the bond is found only in the bond itself. The only condition there expressed, excepting that referring to indemnity against suits, which becomes unimportant since there appear to have been none, is that "the Eastern Paving Brick Company shall well and truly keep and perform all the terms and conditions of the said contract on its part to be kept and performed." If the facts found show that the Eastern Paving Brick Company has failed to perform its said contract in any material part assigned in the complaint, then the surety upon the bond is, by the terms of the bond and by law, liable for the amount of damages equitably due for such breach of contract (General Statutes, § 768; Fowler v. Mallory, 53 Conn. 420,447), not exceeding the amount of the penalty of the bond, with interest. Lewis v. Dwight, 10 Conn. 95, 102, 103.

One of the first provisions of the contract is that the brick when furnished must be of a certain manufacture and kind and of the best quality, and that no defective brick will be received. One of the allegations of paragraph 5 of the complaint, which is denied, is that the brick so furnished, namely, the one million brick delivered and laid down in East Chapel Street prior to January 1st, 1901, "were imperfect and defective." Upon this issue the trial court has found that the brick furnished under both contracts "were defective when furnished, and were not such brick as were called for by the terms of said contracts." These facts alone furnish complete proof of a failure of the contractor to perform "all the terms and conditions of said contract on its part to be kept and performed," since it is obvious that the contract cannot be interpreted as meaning that, upon failure of the contractor to furnish brick of the kind and quality described in the first part of the contract, the city would be without remedy unless it gave written notice to the contractor that repairs were required. Upon such proof of such breach of the contract, the plaintiff, under the allegations of the complaint as to the damages it sustained, was entitled to recover, against the surety on the bond, the sum which it proved that in consequence of such breach it was compelled to expend in order to procure brick of the kind and quality so called for by the contract, provided such breach is sufficiently alleged in the complaint. That the contractor failed to furnish brick of the character and quality called for by the contract, might, perhaps, have been more clearly stated, in different language and in separate paragraphs, than it is in the complaint, but paragraph 5, which was denied by the answer, contains these three averments: (1) that the brick so furnished, before January 1st, 1901, were imperfect and defective; (2) that on or before March 26th, 1902, repairs were required upon the pavement because of defective brick; and (3) that on March 26th, 1902, certain portions of the pavement, in the opinion of the director of public works, required repairs because of broken and worn brick caused by defective brick; and this third averment is followed by allegations in the subsequent paragraphs, of notice to the defendants to repair, of their failure to do so, and of the expense incurred by the city in making the required repairs. Upon the facts found by the court, and in the absence of any question by demurrer, objection to evidence, or otherwise, to the sufficiency of the allegation in question, we are of opinion that the complaint is sufficient to sustain a judgment, based upon the finding that the contractor, independently of its failure to furnish brick of a quality which would not require repairs for five years, failed to furnish brick of the kind and quality called for by the contract.

Another undertaking of the contractor in said agreement was to furnish brick of such a quality that the pavement constructed of them would require no repairs, on account of defective brick, for a period of five years after its completion. This is a guaranty of the character and quality of the brick rather than an agreement to maintain the pavement and keep it in repair for a certain period. Kansas City v.Hanson, 60 Kan. 833, 837; Schenectady v. Union College, 66 Hun (N. Y.) 179, 188. A breach of the condition of the bond, in the failure of the contractor to perform this provision of his contract, is assigned in the complaint, by the averment in paragraph 5, that within five years from the completion of the pavement repairs were required by reason of defective brick. As supporting this second allegation of breach, the court has found that the pavement required repairs, because of defective brick, during the named period, if indeed it has not found that at least upon certain of the streets it became necessary, because of the insufficient quality and strength of the bricks which were furnished and laid, to replace them with brick of another kind and make. If the subsequent provision of the contract, concerning notice to the defendants of required repairs to any portion of the pavement by reason of broken or worn brick, was not intended to apply to a replacement of the brick such as was actually made, the plaintiff, either under this second averment of breach, or under the first allegation of breach above referred to, was entitled, upon the facts found, to recover, as damages, the alleged expense incurred in such replacement of the brick as was rendered necessary on account of defective brick.

The third alleged breach of contract is the failure of the Eastern Paving Brick Company to pay to the plaintiff the sum alleged to have been expended by the director of public works in making repairs during the five-year period. That such a breach has been proved is denied, mainly, if not wholly, upon the ground that the facts show that the director of public works failed to give to the defendants, or at least to the surety on the bond, notice that repairs were required within the time provided in the contract. When such notice was to be given must be determined by the meaning to be ascribed to the language of this particular provision. The question is, do the words "if at any time during the said period any portion of said pavements because of any broken or worn bricks caused by the defective bricks used shall in the opinion of the director of public works require repairs, then said director shall notify said party of the second part by a written notice," etc., provide for a notice for the benefit of the defendant, and mean that the notice was to be given when, in the opinion of the director of public works, any part of the pavement was out of repair by reason of defective bricks and needed repairing for the purpose of protecting the rest of the pavement and preventing any unnecessary increase in the expense of repairing which might be caused by delay; or do these words mean that such notice was to be given when, in the opinion of the director of public works, the interests of the public and the convenience and safety of public travel required that the work of repairing the defects should be commenced. The defendants contend that the notice provided was for their benefit, and that the language of the provision should be interpreted as first above suggested. This view seems to have been adopted by the trial court. We think, however, that the latter meaning is the correct one, and that it was intended that the notices were to be given when the director of public works decided that, in the interest of the public and for the safety of public travel, the work of making the required repairs must be commenced. As the Fidelity and Deposit Company signed this bond as a part of the business in which it is engaged for a profit, this contract is not to be interpreted under any rule which favors a construction more beneficial to a volunteer surety. Supreme Council C. K. of A. v. Fidelity CasualtyCo., 63 F. 48, 58.

The provision requiring notice to the defendants, as a condition precedent to the plaintiff's right to recover expenditures for repairs, was for the benefit of the defendants only in so far as it gave them the privilege of making the required repairs themselves at a possibly less cost than if made by others. It was for the benefit of the city in enabling it to cause repairs necessary for the safety of public travel to be made at the time when, in the opinion of the proper city official, they could best be made and should be made, and to enable the city, in case the defendants failed to make them upon notice, to immediately make them itself, and recover, as damages for the defective brick furnished, the full sum properly expended by it in making the repairs required. The director of public works was evidently named as the person to determine when such written notice should be given to the defendants, because, under the city charter, he was the person who was responsible for the care, management and repair of all the streets of the city. 12 Special Laws, p. 1136, § 76. He was to have the same control over these streets, the pavement for which was to be furnished by the contractor, as over the other streets of the city, and was to decide when, upon these streets as upon others, the conditions were such that public necessity, not the protection of the defendants' interests, required that the work of repairing should be commenced, and that for that purpose public travel should be obstructed or suspended. What the defendants were to be notified of, by the director of public works, was that the time had come when, in his opinion, these streets must be repaired on account of defective brick in the pavement, and that the work of making the repairs must be commenced within five days from the date of the service of the notice or it would be done by the city at the defendants' expense. The director of public works decided that these repairs must be made in the spring or summer of 1902, and notices were then for the first time served upon the defendants, requiring them to proceed with the work of repairing within five days. It does not appear that the director of public works had before that time decided when the work of repairing should be done, or that he did not act in good faith and in the proper discharge of his official duties in deciding that the spring and summer of 1902 was the time when the work of making the repairs should be commenced.

Obviously the finding of the trial court, that in the summer of 1901 the director of public works "then determined that the Chapel Street pavements should be replaced" and "the city authorities then decided that these brick pavements . . . required repairs because of defective brick," means that the director then decided that the Chapel Street pavement was out of repair and would have to be replaced with other brick, and that the pavements needed repairs, and not that he then decided that the replacement and repairing should then be commenced, or that he then decided when the work of replacing and repairing should be commenced.

The notices given by the director of public works to the defendants in 1902 were in conformity to the requirements of the contract.

Upon the allegations of the complaint and the facts found, the plaintiff is entitled to a judgment against both defendants for the sums found, in paragraph 25 of the finding, to have been expended by the director of public works in making the required repairs, less such sum as may be found to have been unnecessarily expended by the plaintiff in making such repairs by purchasing brick of a different size from those which were to be furnished under the contract, and less such further sum as may be found to have been the fair value of any bricks which were taken up and not used in making the repairs, and were appropriated by the city, with interest upon such remainder.

There is error; the judgment in favor of the defendant