Flora v. Aetna Casualty & Surety Co.

SHEPARD, J.

This is an appeal by defendant Aetna Casualty and Surety Company, from a portion of a judgment against appellant and in favor of plaintiffs Melvin and Helen Flora. Defendant Joe Leonard, as general and special administrator of the estate of Ralph Chadwick Cornelius, abandons his appeal.

Facts

The facts are substantially uneontradicted. On January 16, 1958, the plaintiffs-respondents, Melvin and Helen Flora, entered into a building construction contract with Ralph Chadwick Cornelius for the construction of a 10-unit motel in Desert Hot Springs for $42,500. Mr. Cornelius started work on the project on January 20, 1958 and continued working until February 11, 1958, when he died.

Meanwhile, the Bank of America made a building loan to the respondents in January 1958. The bank requested a California contract bond (private work). On February 3, 1958, Mr. Flora first talked with Mr. Cornelius about a bond and then talked with N. H. Curtis, authorized representative of appellant Aetna Casualty and Surety Company. Mr. Curtis told respondents to have Cornelius come in and apply for the bond. On February 5, 1958, Mr. Curtis, as attorney in fact for appellant, and Mr. Cornelius as principal, executed a California contract bond (private work) pursuant to Code of Civil Procedure section 1181. Curtis gave the bond to Cornelius to give to respondents as Cornelius was going to Desert Hot Springs, The bond remained in Cornelius’ possession until

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his death, February 11, 1958. Around February 5, 1958, Cornelius told respondents the bond was taken care of. Shortly thereafter, respondents received in the mail a premium notice on the bond, dated February 6, 1958. On February 12, the day after Cornelius’ death, respondents attempted to pay the premium but Mr. Curtis refused to take the money. He told respondents he had given the bond to Cornelius to take to respondents but that he would not take the money as they did not have the bond when Cornelius died. On the same day, February 12, 1958, plaintiffs obtained the bond from a close friend of the decedent, who had asked Mrs. Cornelius for it. The administrator did additional work under the contract, but failed to complete the agreement.

Thereafter, respondents contracted with another contractor, Ryan and Ryan, to complete the project. Subsequently, respondents brought this action against the representative of the estate of Cornelius, the original contractor, and appellant Aetna Casualty and Surety Company, to recover the excess costs of completing the project as well as certain funds which had been impounded by agreement of the parties. After trial without jury, judgment was rendered for respondents. On appeal, Aetna’s main contention is that there is insufficient evidence that the bond upon which respondents’ action is predicated was ever delivered; therefore it never became effective and appellant is not liable thereon.