Re-Bar Contractors, Inc. v. City of Los Angeles

BURKE, P. J.

Plaintiff, Re-Bar Contractors, Inc., as materialman, furnished steel bars for Massie, a subcontractor for Snyder, the general contractor performing a contract for the Board of Recreation and Park Commissioners of the City of Los Angeles for the construction of a swimming pool and bathhouse on municipal property. Snyder subcontracted with Massie for the placement of the steel reinforcement bars for the improvements and Massie, by written agreement, con

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traeted with plaintiff, Re-Bar Contractors, Inc., for the steel material to be supplied. The construction proceeded and progress payments were made to Snyder. Plaintiff delivered the necessary steel and upon nonpayment of the full amount due under its agreement with Massie filed a valid stop notice with the city. Defendant Pacific Indemnity Co. filed a release bond undertaking to pay any sum which plaintiff might recover by reason of the claims asserted in the stop notice.

On or about March 9, 1959, Snyder delivered a cheek to Massie in the amount of $2,747 payable to Massie and plaintiff, Re-Bar Contractors, Inc. The purpose of such joint payment was to insure that the plaintiff would receive some payment on its account with Massie. Massie attempted to present the check for payment circumventing plaintiff and Snyder stopped payment on the check. On March 16, 1959, Snyder issued a check for $2,359.50 made payable to Massie, plaintiff and the Bank of America. It was endorsed by all parties, deposited in plaintiff’s account, of which plaintiff retained by mutual agreement of the payees the sum of $1,500, paying the balance to Massie. On April 6, 1959, Snyder issued another check in the sum of $1,098.30, payable to the same three payees who in turn agreed that plaintiff be paid $652 out of such funds. Notwithstanding this agreement plaintiff allowed Massie to take the full proceeds of this check.

The court found that plaintiff had supplied materials to the job of a value of $4,661.28. By virtue of the checks paid, Snyder was credited with the $1,500 and $652 he had directed be paid plaintiff out of the joint checks, and gave plaintiff judgment for the balance of its account in the sum of $2,-509.28. Defendants appeal from this judgment.

The principal contention of defendants on appeal is that the payment to one of several joint payees under a contract or negotiable instrument discharges the obligation. They further assert insufficiency of evidence to support certain findings, and endeavor to invoke the maxim that “where one of two innocent persons must suffer by the act of a third, he, by whose negligence it happened, must be the sufferer. ’ ’