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State for Use of Bldg. Com'n for William M. Henry Comprehensive High School for Use of M.A. Hartnett, Inc. v. Wood

Superior Court of Delaware, Kent County

July 21, 1961

STATE of Delaware for the Use of the BUILDING COMMISSION for the WILLIAM M. HENRY COMPREHENSIVE HIGH SCHOOL for the Use of M. A. HARTNETT, INC., a corporation of the State of Delaware, Plaintiff
v.
James H. WOOD and Fidelity and Deposit Company of Maryland, a corporation of the State of Maryland, Defendants. STATE of Delaware for the Use of the BOARD OF TRUSTEES OF DELAWARE STATE COLLEGE for the Use of M. A. HARTNETT, INC., a corporation of the State of Delaware, Plaintiff,
v.
James H. WOOD and Fidelity and Deposit Company of Maryland, a corporation of the State of Maryland, Defendants. STATE of Delaware for the Use of SMYRNA SPECIAL SCHOOL DISTRICT BUILDING COMMISSION for the Use of M. A. HARTNETT, INC., a corporation of the State of Delaware, Plaintiff,
v.
James H. WOOD and Fidelity and Deposit Company of Maryland, Defendants. STATE of Delaware for the Use of DOVER SPECIAL SCHOOL DISTRICT BUILDING COMMISSION for the Use of M. A. HARTNETT, INC., a corporation of the State of Delaware, Plaintiff,
v.
James H. WOOD and Fidelity and Deposit Company of Maryland, Defendants.

Page 328

Henry R. Horsey (of Berl, Potter & Anderson), Wilmington, for M. A. Hartnett, Inc., the use plaintiff.

Albert W. James (of Morris, James, Hitchens & Williams), Wilmington, for defendant Fidelity & Deposit Co. of Maryland.

LYNCH, Judge.

[53 Del. 529] The use plaintiff, M. A. Hartnett, Inc. (hereafter referred to as Hartnett), has filed these four suits seeking to recover payment for supplies and materials it allegedly furnished to defendant, James H. Wood (hereafter referred to as Wood), the general contractor on four public projects. Because public projects are involved, Wood was required by 29 Del.C., Ch. 69, § 6902 to furnish a bond, with corporate surety, 'conditioned that the contractor shall * * * pay to every person furnishing material and performing labor * * * all sums of money due * * *.' The cited statute authorizes materialmen and sub-contractors to 'maintain an action on the bond * * * for the recovery of * * * money * * * due * * * from the contractor.' The actions were based on the statute.

Wood and Fidelity and Deposit Company of Maryland (hereafter referred to as surety), his corporate surety on the statutory bond, were made the only defendants.

Wood apparently has not seen fit to defend these actions, since he made no appearance and he has filed no answers to the complaints. Default judgments have been entered against Wood in two of the suits and it seems obvious that Hartnett is looking primarily to the surety for payment of the materials and supplies Hartnett allegedly furnished to Wood.

The surety's answer has attached to it a copy of the bond sued upon and a copy of an Indemnity Agreement, made September 7, 1949 between James H. Wood, a defendant in the suits, named as 'Contractor' therein, and Hildreth D. Wood and Roberta A. Wood, named as 'Indemnitors'. This Indemnity Agreement provided that the contractor and the indemnitors----

'* * * will * * * indemnify and save the Company harmless from any and all loss, claim, demand, liability and expenses * * * which it shall at any time sustain, incur, or be put to, for, by reason, or in consequence of 'Such Bonds', which have been or may hereafter be executed or procured [53 Del. 530] on behalf of the Contractor, including all costs, counsel fees and expenses incurred in investigating any claims made under or concerning 'Such Bonds', or in collecting any premiums due or losses sustained on 'Such Bonds', or in or about prosecuting or defending any actions, suits, or other proceedings which may be commenced or prosecuted against the Contractor, or against the Company, upon 'Such Bonds', or in any wise relating thereto; we the Contractor (and the Indemnitors, if any), further agreeing, that in any accounting which may be had between the Company and the Contractor, or between the Company and the Indemnitors, or either or both of them, the Company shall be entitled to charge for any and all disbursements made by it in good faith in and about the matters herein contemplated by this Agreement of Indemnity, under the belief that it is or was liable for the sums and amounts so disbursed, or that it was necessary or expedient to make such disbursements, whether or not

Page 329

such liability, necessity or expediency existed; and that the vouchers or other evidence of any such payments made by the Company shall be prima facie evidence of the fact and amount of our liability to the Company.'

The answer set up certain defenses to Hartnett's claims, none of which are here pertinent. It asserted cross claims as to its co-defendant Wood and the named indemnitors. The surety company has moved under Rule 13(h) of the Rules of this Court, Del.C.Ann., for an order----

'making the aforesaid Hildreth D. Wood and Roberta A. Wood defendants to the cross-claim asserted in this Surety Company's Answer, on the ground that their presence is required for the granting of complete relief in the determination of such cross-claim * * * and that jurisdiction can be obtained of them and that their joinder will not deprive the Court of jurisdiction of the action.'

Hartnett opposes this motion, asking (1) that the request of the Surety Company to bring the indemnitors in as additional[53 Del. 531] parties be denied and (2) moving to dismiss the cross claims asserted against them. The plaintiff has set up these grounds in support of the motions:

1. Plaintiff is not a party to the Indemnity Agreement;

2. Plaintiff's suits are based on Title 29, Del.C., § 6902, and the bond furnished by defendants pursuant to the statute;

3. (a) The cross claims are unrelated to plaintiff's statutory action, since it is an independent action for contribution by the surety based on the Indemnity Agreement;

(b) The cross claim presents no common question of law or fact, common to plaintiff's claims;

(c) The cross claim is not compulsory but permissive and defendant may proceed on it in an independent action; defendant surety is not entitled to plead its cross claim in ...


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