Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

John P. Callaghan, Inc. v. Continental Casualty Co.

Decided: April 27, 1933.

JOHN P. CALLAGHAN, INCORPORATED, APPELLANT,
v.
CONTINENTAL CASUALTY COMPANY, RESPONDENT



On plaintiff's appeal from the Supreme Court.

For the appellant, Julius Stein.

For the respondent, Conover & English.

Parker

The opinion of the court was delivered by

PARKER, J. This is a suit against the surety on a bond given to the board of education of Irvington for the faithful performance by one Tyler M. Gibbs of a contract to build a public school. The bond is in the form prescribed by chapter 75 of the laws of 1918, with some additional matter, and contains the statutory clause "agreeing and assenting that this undertaking shall be for the benefit of any materialman or laborer having a just claim as well as for the obligee." The plaintiff sued as one of those for whose benefit

the bond was made, and demanded that the surety respond in upwards of $20,000 for materials furnished to Gibbs and for which he did not pay.

Section 3 of the statute requires the claimant to serve a notice of his unpaid claim on the surety within eighty days after the acceptance of the building, and then wait sixty days before bringing suit. Franklin Lumber Co. v. Globe Indemnity Co., 102 N.J.L. 9, 715. The first count of the complaint, served May 8th, 1929, avers that Gibbs owes the money with interest from August 21st, 1926, and that on February 11th, 1929, plaintiff gave notice to the surety. It contains no averment of the date of acceptance, or indeed that there was any acceptance by the board of education. The second count avers that pursuant to chapter 75 of Pamph. L. 1918, Gibbs as principal, and defendant as surety, executed the bond in question; that the building was erected by Gibbs "and is now in use by the board of education;" that plaintiff has demanded that the board accept the building, but that the board unreasonably and negligently refused and refuses to accept it, and that a statement was served on the defendant surety as before. It will be observed that the board is not a party to the suit, and that there is no intimation of fraud or collusion, as for example in Chism v. Schipper, 51 N.J.L. 1.

The trial court directed a verdict for defendant on both counts, and this ruling, together with the admission of a letter in evidence, is the basis of the appeal.

Although the first count does not plead an acceptance of the building, the proofs showed that in June, 1926, the board passed a resolution accepting it subject to making good some minor omissions and items of defective work, and that in August of that year, pursuant to a final architect's certificate dated in July, the board ordered payment of all reserved money to be made. Nothing further appears. Regarding this for the nonce as an acceptance, either as of June or August, 1926, the plaintiff was faced with the fact that not until February, 1929, some thirty months later, did plaintiff make any demand or give any notice to the surety; and that

its rights against the surety had lapsed at the end of eighty days after the acceptance. It is argued that as the bond is by its terms for the benefit of plaintiff and others similarly situated (see Shannon v. Continental, &c., Co., 106 N.J.L. 200), plaintiff may enforce it by virtue of section 28 of the Practice act of 1903 at any time within the ordinary period of limitation; but this takes no account of the fact that by the act of 1918 no right of action arises as against the surety except by the service of a proper notice within eighty days after the acceptance.

The second count does not help the plaintiff. The pertinent language is as follows: "The said plaintiff has demanded of the said board of education * * * that said board * * * accept the said school building erected by the said Tyler M. Gibbs, but the said board of education unreasonably and negligently has refused and failed and still refuses ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.