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Collins v. Metropolitan Casualty Insurance Co.

Decided: January 10, 1935.

JOHN D. COLLINS, 3D, AND ALLENTOWN PORTLAND CEMENT COMPANY, A CORPORATION OF THE STATE OF PENNSYLVANIA, PLAINTIFFS-RESPONDENTS,
v.
METROPOLITAN CASUALTY INSURANCE COMPANY OF NEW YORK, A CORPORATION OF THE STATE OF NEW YORK, DOING BUSINESS IN THE STATE OF NEW JERSEY, DEFENDANT-APPELLANT



On appeal from the Supreme Court.

For the plaintiffs-respondents, John M. Mills (Harold A. Price, of counsel).

For the defendant-appellant, Lum, Tamblyn & Fairlie (Chester W. Fairlie, of counsel).

Case

The opinion of the court was delivered by

CASE, J. This is an appeal by the defendant insurance company from a judgment entered in the Supreme Court for the plaintiffs and against it in the amount of $8,511.88. The judgment was entered upon the finding of Judge Lawrence, sitting, by consent, without a jury.

The action arises on a claim of Allentown Portland Cement Company for materials furnished on a Monmouth county road

under a contract between one Harry C. Wagner, trading as Camden Paving Company, and the board of chosen freeholders of the county of Monmouth, the defendant company having furnished a bond under chapter 75. Pamph. L. 1918, p. 203. The litigated question is whether the required statement was served upon the bonding company within the statutory period of eighty days following acceptance of the road by the Monmouth county freeholders, and this, in turn, depends upon the fixing of the time when acceptance was had. The road contract and the bond were executed on or about August 8th or 9th, 1929. There was a formal and, in its terms, sufficient resolution of acceptance adopted by the board of freeholders on November 23d, 1932. There is no doubt that if that was, as the court below found, the date of acceptance, the necessary statement was served in season thereafter upon the bonding company and the action in due time begun. However, the bonding company contends that acceptance occurred either on April 23d, 1930, or on June 5th, 1931. If this contention is sound, the statement was not served in season.

The time of acceptance of the work under municipal contracts is of vital importance because upon it depends the sufficiency of the several steps necessary to be taken by subcontractors, materialmen or laborers entitled to recover on the contractor's bond under the statute cited, supra. It is unfortunate if the essentials of acceptance are so loosely defined as to leave the defendant bondsman fairly in doubt, when sued upon the bond, whether to rely upon the events of a given day or of another day more than a year later as constituting the acceptance. For if an obligee, when put to its defense, is thus confused, what of those whom the legislature sought to protect by requiring the bond? They must, at their peril, determine when the facts of the case constitute an acceptance under the statute and govern their several steps in chronological accord therewith. To them an acceptance by the contracting public agency is necessary, and time -- the furnishing of a statement within eighty days after acceptance and institution of suit within one year after acceptance

but not less than sixty days after the furnishing of the statement -- is of the essence. Franklin Lumber Co. v. Globe Indemnity Co., 102 N.J.L. 9; Commonwealth Quarry Co. v. Metropolitan, &c., Co., 108 Id. 518; John P. Callaghan, Inc., v. Continental Casualty Co., 110 Id. 390. An apt illustration of the difficulty sometimes incident to that decision is before us in the present case. Plaintiffs instituted an earlier suit on the same cause on April 20th, 1931, alleging that the acceptance was on April 23d, 1930, to which the defendant answered that the transactions of that day did not constitute an acceptance, whereupon plaintiffs, believing that the defense was well grounded, discontinued that action, caused a resolution of formal acceptance to be passed by the board and brought the instant suit.

The explanation of the appellant's alternative argument is that it seeks to find the acceptance, not in a formal action of the freeholders resolving to accept, but as a conclusion from other acts that are said to have occurred. The contract provided:

"Upon the completion of the work, the Engineer shall certify to the Board of Chosen Freeholders, in writing, as to the completion of the work and shall further certify as to the entire ...


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