Summary
In American Surety Co. v. Ed Smith Sons, 100 Ga. App. 658 (112 S.E.2d 211) (1959), work on a highway project was accepted July 29, 1955; final payment was made November 26, 1957; and the subcontractor's suit was filed November 4, 1958.
Summary of this case from U.S. Fidelity c. Co. v. Rome Concrete Pipe Co.Opinion
37847.
DECIDED OCTOBER 19, 1959. REHEARING DENIED NOVEMBER 12, 1959.
Action on bond. Fulton Civil Court. Before Judge Etheridge. May 28, 1959.
N. A. Turner, Robert S. Wiggins, for plaintiff in error.
deGive Fendler, Henry L. deGive, R. E. Fendler, John H. Van Voorhis, contra.
No action can be instituted on the surety bond in the present case after one year from the completion of the contract and the acceptance of the public building or public work by the proper public authorities.
DECIDED OCTOBER 19, 1959 — REHEARING DENIED NOVEMBER 12, 1959.
Ed Smith Sons, Inc., a subcontractor, filed a suit in the Civil Court of Fulton County, seeking recovery against the American Surety Company of New York on a statutory bond signed by the defendant surety in connection with the contract between the State Highway Department of Georgia and Suber Company, Inc.
After amendment, the petition alleged substantially that all work performed under the contract between the State Highway Department and Suber Company, Inc., had been completed and that Suber Company was notified by the State Highway Department's engineer that the project had been accepted by the State Highway Department as of July 29, 1955; further that final payment on the contract was made to Suber Company on November 26, 1957, according to the records of the State Highway Department.
The defendant filed a demurrer invoking the statute of limitations claiming that the statute ran within one year, under the contract here involved. The demurrer contended that since the work was completed on July 29, 1955, and the petition was not filed until November 4, 1958, no action could be instituted on the bond under Code (Ann.) § 23-1709 which provides: "No action can be instituted on said bonds or either of them after one year from the completion of the said contract and the acceptance of said public building or public work by the proper public authorities."
The court overruled the demurrer and it is to this ruling that the case is here for review.
Counsel for the plaintiff contends that Code (Ann.) § 23-1709 quoted herein above refers to final acceptance by the defendant as well as final payment. Counsel cites, in support of this contention, John Monaghan, Inc. v. State Highway Dept., 81 Ga. App. 289 ( 58 S.E.2d 242). That case is not authority for affirmance here because the facts are not in accord with the facts of the instant case. Counsel for the plaintiff cites and relies on National Surety Corp. v. Wright, 70 Ga. App. 838, 841 ( 29 S.E.2d 662). That case cannot aid counsel for the plaintiff, but on the contrary is authority for reversal in the instant case. There the court went into the matter of the statute of limitations and said: "It is our opinion that the statute should be strictly construed, [referring to Code § 23-1709] and not be extended to apply a limitation to a canceled contract." It will therefore be discerned that even in that case this court realized that the language of Code (Ann.) § 23-1709, which was therein quoted, conclusively showed that no action could be instituted on a bond after one year from the completion of the contract and the acceptance of the work involved in the contract. This court declines to extend a Code section so as to make the meaning other than the unequivocal language thereof, such as the language used in Code (Ann.) § 23-1709 quoted above. To our minds there is only one construction of Code (Ann.) § 23-1709, and that is to construe it as written. The language is plain and unequivocal.
The case is properly before this court. See Carter v. Clements, 98 Ga. App. 857 ( 107 S.E.2d 257). A demurrer was the proper procedure to invoke the statute of limitations. See Hollingsworth v. Redwine, 73 Ga. App. 397 ( 36 S.E.2d 869).
It follows that the court erred in overruling the demurrer invoking the statute of limitations, under the record of this case.
Judgment reversed. Townsend and Carlisle, JJ., concur.
The only question in this case is whether the one-year statute of limitations has run against the bonding company on the bond of the principal, Suber Company, under its contract with the State Highway Department on a road project, and this depends on when the statute of limitations commences to run. Code (Ann.) § 23-1709 provides that it is one year "from the completion of the said contract and the acceptance of said . . . public work." (Italics mine.) The petition alleges that the work was accepted more than a year prior to the action, and the contract was completed by plaintiff and by Suber Company more than a year prior to the action, but final payment by the State Highway Department was within the year, and defendant in error contends that under the terms of the contract it is only completed when the engineer "has made final acceptance of the work and the Department has paid the final estimate." Thus, under such construction, no matter when the contractor completed the work and when it was accepted the contract would not be complete insofar as the statute of limitations is concerned until the State or political subdivision made final payment; if it never made final payment the statute would never commence to run. Such a construction might well be within the meaning of the Code section, which does not itself state whether the words "completion of the contract" refer to completion by the contractor, or completion by both the contractor and the State or political subdivision. To my mind, however, the language of the bond itself settles this question, since the condition of the bond is: "That if the above bound principal [Suber Company] shall in all respects comply with the terms and conditions of said contract and his obligations thereunder . . . and shall complete the said contract in accordance with its terms" the bond shall be void. This fixes the obligation of the surety in relation, not to payment by the State, but in relation to performance by the contractor. This language of the bond is not in conflict with the statute and the writer recognizes that if there was any such conflict the terms of the statute would control. Any other construction would make it impossible to sue on the bond so long as the principal contended that the State or political subdivision owed it money under the contract, even though the work was absolutely completed so far as the contractor was concerned and had been accepted by the State. I accordingly concur in the judgment.