Opinion
41036.
ARGUED JANUARY 11, 1965.
DECIDED APRIL 6, 1965.
Action on bond, etc. Fulton Superior Court. Before Judge Tanksley.
Wilson, Branch, Barwick Vandiver, George W. Hood, John W. Wilcox, Jr., for plaintiffs in error.
Alston, Miller Gaines, Hewitt H. Covington, Martin H. Peabody, contra.
1. A provision included in a bond required by and given pursuant to statute is void if the provision is not one that is authorized by the statute.
2. The averments in a plea of recoupment must be as full, clear, certain and definite in setting out the defendant's demand as his allegations would be if he were a plaintiff asserting the demand in an original declaration.
3. The trial judge, having correctly dismissed the plea of recoupment upon general demurrer, did not err in disallowing an amendment to defendant's answer defectively seeking to reassert the same demand for recoupment.
ARGUED JANUARY 11, 1965 — DECIDED APRIL 6, 1965.
Southwest Steel Products brought this action against H. W. Ivey Construction Company, Inc., and Standard Accident Insurance Company to recover $3,779.80 allegedly due the plaintiff as a subcontractor of defendant Ivey, the general contractor in a public school construction project of the DeKalb County Board of Education. The defendant insurance company was surety upon Ivey's performance bond.
To the petition defendant Ivey filed its answer and "plea of setoff and recoupment," so-called. The defendant surety filed general and special demurrers and its answer.
After a hearing on the demurrers, the trial judge overruled all the defendant surety's demurrers to the petition, sustained plaintiff's special demurrers to Ivey's answer, deferred ruling on the general demurrers to Ivey's answer and gave Ivey leave to amend within twenty days.
In response to the order sustaining plaintiff's special demurrers, Ivey amended its answer so that the following allegations were then extant in its counter claim: "Under the terms of Article IX (a) of the contract between plaintiff and this defendant, plaintiff undertook to indemnify defendant against `all claims for damages arising from accidents to persons or property occasioned by the subcontractor (plaintiff), his agents or employees.'. . . This defendant was required to expend the sum of $4,219.51 as a consequence of plaintiff's failure to perform in a sufficiently workmanlike manner the shoring and bracing of the framework called for in plaintiff's subcontract . . . which failure properly to perform the shoring and bracing caused a collapse of the form work when the concrete was poured into said forms. When the formwork collapsed, concrete and debris fell onto boilers, electrical work and reinforcing steel which damage this defendant was required to have repaired and for which this defendant seeks to recoup from plaintiff herein." The counter claim alleged a balance due plaintiff of $3,433, and sought to recover the difference between this amount and $4,219.51.
Plaintiff met this amendment by filing additional general and special demurrers to Ivey's answer, and the trial judge subsequently sustained all the latter demurrers and dismissed Ivey's counter claim.
Thereafter Ivey sought by amendment to strike every paragraph of its counter claim, previously dismissed, and to substitute other allegations demanding recoupment for the same incident previously alleged in its answer. Upon plaintiff's objection the trial judge disallowed the amendment.
The case came on for trial and resulted in a verdict and judgment for plaintiff. Defendants except to various orders of the court on the demurrers filed in the case, to the order disallowing Ivey's amendment, to the orders denying defendants' motions for nonsuit and for a directed verdict, and to the judgments denying defendants' motion for judgment notwithstanding the verdict and their motion for new trial.
1. The petition under consideration did not allege compliance with the following conditions present in the bond involved in this suit. "No suit or action shall be commenced hereunder by any claimant. . . Unless claimant shall have given written notice to any two of the following: The Principal, the Owner, or the Surety above named, within ninety (90) days after such claimant did or performed the last of the work or labor, or furnished the last of the materials for which said claim is made, stating with substantial accuracy the amount claimed and the name of the party to whom the materials were furnished, or for whom the work or labor was done or performed."
The correctness of the trial judge's orders overruling the defendant insurance company's demurrers numbered 1, 2, 3 and 5 rests on the determination of whether the bond under review is a conventional or a statutory one. If held to be a conventional bond the demurrers of the defendant insurance company should have been sustained as the petition failed to state a cause of action since it omitted to allege compliance with an essential condition present in the bond. See Code § 103-103. If held to be a statutory bond given in compliance with Code Ann. § 23-1705, the omitted condition must be read out of its terms and the failure to allege compliance with it was proper. Talmadge v. General Cas. Co., 88 Ga. App. 234 ( 76 S.E.2d 562); Home Indem. Co. v. Battey Machinery Co., 109 Ga. App. 322, 326 ( 136 S.E.2d 193).
The construction project involved was an addition to the Avondale High School building and was within the jurisdiction of the DeKalb County Board of Education. By its terms the bond in question covered the contract of construction and named the DeKalb County Board of Education as obligee. Clearly it is a bond given in compliance with Code Ann. § 23-1705 and is therefore a statutory bond. The bond was complete as a statutory bond and conformed with the statute except as to the above quoted condition which the statute does not authorize.
"The validity of a bond given in compliance with a statute, and which meets the requirements of the statute is not affected or its nature changed by the inclusion in the bond of a condition that is either not authorized or is repugnant to the statute, except in the instances where the law expressly provides that a bond not made strictly in accordance with the statute is void. . . . No law declares that a bond given in compliance with Code § 23-1705 but which included a condition not authorized by the statute is void or invalid." St. Paul-Mercury Indem Co. v. Koppers Co., Inc., 95 Ga. App. 687, 696 ( 99 S.E.2d 275).
The cases of American Surety Co. v. Small Quarries Co., 157 Ga. 33, 34-35 ( 120 S.E. 617) and Hannah v. Lovelace-Young Lumber Co., 159 Ga. 856, 858 ( 127 S.E. 225), cited by the defendant surety, are distinguished in the Koppers Co. case, supra, and the distinctions there are applicable here.
The petition was not defective by reason of failing to allege compliance with an unauthorized condition in a statutory bond.
The trial court properly overruled the insurance company's demurrers 1, 2, 3, and 5. The exceptions to the remaining demurrers of this defendant were abandoned.
2. While defendant Ivey's counter claim in the amended answer arose from an incident that might under appropriate allegations furnish a basis for recovery in tort either by Ivey or by third persons, yet the counter claim sounds in contract as a plea of recoupment under a provision of the same contract upon which the plaintiff seeks to recover. "Recoupment is a right of the defendant to have a deduction from the amount of the plaintiff's damages, for the reason that the plaintiff has not complied with the cross-obligations or independent covenants arising under the same contract." Code § 20-1311; Commercial Credit Co., Inc. v. Anthony, 48 Ga. App. 725, 726 ( 173 S.E. 204). "Recoupment may be pleaded in all actions ex contract, where from any reason the plaintiff under the same contract is in good conscience liable to defendant." Code § 20-1314; Middleton v. Pruden, 191 Ga. 893, 900 ( 14 S.E.2d 82).
However, the averments in a plea of recoupment must be as full, clear, certain and definite in setting out the defendant's demand as his allegations would be if he were a plaintiff asserting the demand in an original declaration. Atlanta Glass Co. v. Noizet, 88 Ga. 43, 44 ( 13 S.E. 833); Cook v. Cobb Roper, 22 Ga. App. 328, 329 ( 95 S.E. 1022); Byrom v. Ringe, 83 Ga. App. 234, 241 ( 63 S.E.2d 235). This obviously means that as against general demurrer a plea of recoupment is subject to the same test of sufficiency as a petition. Under numerous decisions of our appellate courts, the final test of the sufficiency of a petition to withstand general demurrer is whether the defendant can admit all the plaintiff's allegations and still escape liability. See Code § 81-304; Frazier v. Southern R. Co., 200 Ga. 590, 597 ( 37 S.E.2d 774); Johnson v. John Deere Plow Co., 214 Ga. 645, 648 ( 106 S.E.2d 901); Ayers v. Baker, 216 Ga. 132, 136 ( 114 S.E.2d 847). Ivey's counter claim fails to meet this test.
It was incumbent upon Ivey to show as a condition precedent to its right of recoupment under the indemnity provision, that it suffered damage by reason of a claim for which defendant was liable to some third person because of an accident occasioned by the plaintiff, its agents or employees. While we perceive from the sketchy allegations of the counter claim that there was an accident, other necessary allegations of fulfillment of the condition precedent are missing from Ivey's demand. There are no properly pleaded allegations of fact showing that the accident was "occasioned" by the plaintiff, its agents or employees, or that there was a claim against Ivey or that Ivey was damaged in any way.
While Ivey alleged that the accident was caused by plaintiff's "failure properly to perform the shoring and bracing" and that Ivey "was required to have repaired" certain property damage at Ivey's expense, this is not enough. The allegations are vague, indefinite, uncertain and conclusory as well. "A general demurrer only admits facts well pleaded. Where allegations are equivocal, doubtful, or subject to different interpretations, they will be construed most strongly against the pleader." Hoffman v. Chester, 204 Ga. 296, 307 ( 49 S.E.2d 760); State Farm c. Ins. Co. v. Jones, 98 Ga. App. 46, 55 (2) ( 104 S.E.2d 725). "`The allegations of a petition must be construed most strongly against the pleader, and only facts well pleaded and not the conclusions of the pleader, are admitted by the demurrer.' Ford v. S. A. Lynch Corp., 79 Ga. App. 481, 484 ( 54 S.E.2d 320). `In construing a petition on general demurrer, the court will consider that the plaintiff intended to serve his own best interests and will construe the allegations of the petition most strongly against the pleader, and if any inference unfavorable to the rights of the party claiming [a] right may be fairly drawn from the allegations of the petition, this will be done.' Tarver v. Savannah Beach, Tybee Island, 96 Ga. App. 491, 494 ( 100 S.E.2d 616). `It is the general rule that when considered on demurrer, pleadings must be construed most strongly against the pleader, and the absence of averments of essential facts and reliance by the pleader upon allegations short of such facts require a holding that they did not exist.' Hulsey v. Interstate Life c. Ins. Co., 207 Ga. 167 ( 60 S.E.2d 353)." Hardigree v. Housing Authority of the City of Atlanta, 107 Ga. App. 406, 407 ( 130 S.E.2d 275).
The trial judge did not err in sustaining certain general demurrers directed to Ivey's plea of recoupment. No ruling is required of this court on exceptions to orders of the trial judge on other general and special demurrers to Ivey's plea, and the correct sustaining of general demurrers for the reasons discussed above renders moot the remaining issues raised by demurrer.
3. The trial judge having ruled on the merits of Ivey's plea of recoupment, the order sustaining general demurrers to the plea properly established the law of the case adversely to Ivey. Whiteway Neon-Ad., Inc. v. Maddox, 211 Ga. 915, 916 (1) ( 89 S.E.2d 650); Bridges v. Avery Sons Co., 86 Ga. App. 9 (2) ( 70 S.E.2d 550). The trial judge correctly disallowed Ivey's amendment defectively seeking to reassert the same demand.
4. The defendants have abandoned all other assignments of error.
Judgment affirmed. Frankum and Hall, JJ., concur.