Glens Falls Indemnity Co. v. Perscallo

DRAPEAU, J.

Plaintiff bonded the defendant Nick Pers eallo for the faithful performance of a contract with the State of California to build a portion of the state highway. The defendant failed to complete his contract, and the plaintiff was required under the terms of the bond to pay for its completion. Plaintiff advanced money to the defendant for payments to workmen and for material. Then, after the defendant was put off the job, plaintiff compromised with the state for payments made by the state to contractors who finished the work.

Defendant delivered to plaintiff his promissory note for

[801]

$40,000, for part of plaintiff’s advances. To secure payment of the note, defendant also delivered to plaintiff a chattel mortgage of construction machinery. Thereafter all of the machinery was sold, except a power shovel, and the proceeds applied upon the note. This left only the shovel subject to the chattel mortgage.

Action was brought by the plaintiff for the unpaid balance of the note, and also for advances not included in the note.

Steve Bulich intervened, and alleged that the shovel belonged to him.

After trial these issues were submitted to the court. Fifty-seven thousand thirty-one dollars and thirty-one cents ($57,-031.31) was found and adjudged due from defendant to plaintiff. This included the balance due on the note, interest, attorneys’ fees, and other advancements.

As to the shovel, the court found that "the lien of the chattel mortgage was superior to the claimed ownership of the intervener. It was therefore adjudged that the shovel be sold, and the proceeds applied to the amount found due on the note and secured by the chattel mortgage, $25,588.61; any balance remaining to go to the intervener.

From the judgment both defendant and intervener have appealed.

Defendant contends: (1) that the evidence does not support the finding of the amount due on the note; (2) that the compromise payment to the state was not included within the powers given to plaintiff by the bond; (3) that the court made no finding on defendant’s presented issue of impossibility of performance of his contract with the state; and (4) that the court erroneously allowed interest on advances not secured by the note, which included interest on the compromise payment.