Commonwealth v. City Trust Safe Deposit & Surety Co.
Commonwealth v. City Trust Safe Deposit & Surety Co.
Opinion of the Court
Opinion by
This is an appeal from a decree of distribution of the assets in the hands of the receiver of the City Trust Safe Deposit and Surety Company of Philadelphia. The Penn Erecting Company having been awarded by the United States a contract for the erection of a public building, gave bond, as required by the act of congress, in a penal sum conditioned that it would “promptly make payment to all persons supplying labor and materials in the prosecution of the work provided for in the aforesaid contract.” The obligee named in the bond is the United States; the penal sum is $6,695, and the surety the City Trust Safe Deposit and Surety Company. The Penn Erecting Company completed the building it had contracted to erect, but in the end was largely indebted to various parties who had supplied it with the required materials. Default having been made in the payment of this indebtedness, separate suits were brought on the bond by the individual claimants, and judgment against principal and surety followed in each case, except in the suit of the Dauphin Bridge Company. While the suit of the bridge company was brought quite as promptly as the others, though in a different court, it alone was halted by a defense set up, and its suit was undetermined when the distribution, which is here appealed from, was made. The surety company without delay paid in full the judgment obtained against it, amounting to $3,625.70, and in addition paid an uncontested account of $219.83 in full, thus making its entire payment on account of its liability $3,845.53. Some time thereafter the surety company passed into the hands of a receiver, as did also the bridge company. At the audit of the account of the receiver of the surety company, the claim of the bridge company was submitted, and proved to the amount of $8,082.27, by the Harrisburg Trust Company, its receiver. Its right to participate in the distribution was not denied. Not only was there no attempt to dispute the honesty and accuracy of this claim, but it was distinctly admitted that the defense set up to the action brought by the bridge company by way of set-off, could not be sustained. The other defense to the action was that the surety
Reference
- Full Case Name
- Commonwealth ex rel. v. City Trust Safe Deposit and Surety Company
- Cited By
- 2 cases
- Status
- Published
- Syllabus
- Principal and surety — Bond—Federal building contract — Voluntary payments. Where a surety on a bond given in pursuance of the act of congress to secure “payment to all persons supplying labor and materials” to a contractor in the erection of a public building, voluntarily pays a judgment obtained against it by a material man, and also an uncontested account, and subsequently another subcontractor establishes a claim which together with the amounts paid exceeds the penal sum of the bond, the surety will not be liable to such subcontractor merely for the difference between the amounts previously paid to other creditors and the penal sum, but its liability will be determined by ascertaining the per centum the creditors would be entitled to on an equal distribution among all, even if the result is a payment by the surety of an aggregate in excess of the penal sum of the bond. In such a case the surety company could have protected itself by restraining execution on the judgment, and by refusing to pay the uncontested claims, until the claim of the subcontractor of which the surety had knowledge, was adjusted.