Barge & Co., Inc. v. Oakwood Steel Co.

• Decision Date: 06 March 1973
• Docket Number: No. 3,Nos. 47922,47923,s. 47922,3
• Citation: 128 Ga.App. 597,197 S.E.2d 405
• Parties: BARGE & COMPANY, INC. v. OAKWOOD STEEL COMPANY et al. FEDERAL INSURANCE COMPANY v. OAKWOOD STEEL COMPANY
• Court: Georgia Court of Appeals

Page 405

197 S.E.2d 405

128 Ga.App. 597

BARGE & COMPANY, INC. v. OAKWOOD STEEL COMPANY et al.

FEDERAL INSURANCE COMPANY v. OAKWOOD STEEL COMPANY.

Nos. 47922, 47923.

Court of Appeals of Georgia, Division No. 3.

March 6, 1973.

Rehearing Denied March 23, 1973.

Moreton Rolleston, Jr., Greer, Sartain & Carey, J. Nathan Deal, Gainesville, for appellants.

Telford, Stewart & Stephens, J. Douglas Stewart, Gainesville, for appellees.

Syllabus Opinion by the Court

EBERHARDT, Presiding Judge.

Oakwood Steel Company brought the present action on a private or nonstatutory payment bond against Barge and Company, Inc., the principal and prime contractor, and Federal Insurance Company, the surety, which was issued in connection with a contract between Barge and Ryder Truck Lines, Inc., the obligee on the bond, for the construction of terminal facilities for Ryder. The bond provided that 'if the Principal (Barge) shall pay all lawful claims of sub-contractors, materialmen, or laborers for labor performed or materials furnished directly to the Principal, in the performance of said Contract, we agreeing that this bond shall be for the benefit of any sub-contractor, materialman or laborer having a just claim, then this obligation shall be void; otherwise to remain in full force and effect.' Federal filed a cross claim against Barge on an idemnity agreement executed in conjunction with the bond, seeking judgment against Barge for any amount found to be due Oakwood from Federal, and for attorney's fees because of Barge's refusal to defend the action.

On the trial ¹ it developed that Barge entered into a contract with Bernie V. Ward, Inc., a material supplier, under which Ward was to furnish various structures to be used in the construction. Ward, in turn, contracted with plaintiff Oakwood for the fabrication of the structures. All the items supplied by Oakwood were sold to Ward and were either picked up from Oakwood by Ward, delivered to Ward, or delivered to the construction site at Ward's direction. Ward failed to pay Oakwood in full for the materials which it ordered, occasioning this suit on the bond against Barge and Federal.

The jury returned a verdict for Oakwood on the main claim, and found for Federal on its cross-claim for the amount of the judgment plus $985 as attorney's fees and expenses. Barge appeals and Federal cross appeals. Held:

The determinative issue in this appeal is whether Oakwood is a subcontractor or materialman having a right to sue upon the bond in question. Since this is a private, voluntary bond, the issue must be determined from the intent of the parties. 13 Couch on Insurance 2d, p. 385, § 47:193. 'In the absence of a contrary statutory provision, the bond of the principal contractor may be so conditioned as to cover only his indebtedness and not to include that of a subcontractor. For example, a contractor's bond conditioned for the payment of all just debts for labor and materials 'incurred through subcontract or in any other manner' does not include materials furnished to a subcontractor, where under a further restriction in the bond the debts must be incurred 'by or on behalf of the principal.' And a bond conditioned that the...