Berger Manufacturing Co. v. Lloyd

• Decision Date: 26 February 1908
• Citation: 108 S.W. 52,209 Mo. 681
• Parties: BERGER MANUFACTURING COMPANY v. HIRAM LLOYD et al., Appellants
• Court: Missouri Supreme Court

108 S.W. 52

209 Mo. 681

BERGER MANUFACTURING COMPANY v. HIRAM LLOYD et al., Appellants

Supreme Court of Missouri, First Division

February 26, 1908

Transferred from St. Louis Court of Appeals.

Reversed.

Henry A. Hamilton for appellants.

(1) A contract between two parties upon a valid consideration may be enforced by a third party, when entered into for the benefit of such third party, even though he may not be mentioned in the contract, and though he was not privy to the consideration. Rogers v. Gosnell, 58 Mo. 590; State ex rel. v. Gaslight Co., 102 Mo. 482; Ellis v. Harrison, 104 Mo. 270; City to use v Von Phul, 133 Mo. 561; Devers v. Howard, 144 Mo. 671; School District v. Livers, 147 Mo. 580; Bethany v. Howard, 149 Mo. 504; Lime & Cement Co. v. Wind, 86 Mo.App. 163. (2) No one has a right of action on an agreement except those who are in the minds of the parties as beneficiaries of its provisions, and it must be determined from the language employed in the instrument what parties were intended as beneficiaries by the parties to the agreement. State ex rel. v. Loomis, 88 Mo.App 500; Ellis v. Harrison, supra; Howsmon v. Water Co., 119 Mo. 304; State v. Railroad, 125 Mo. 596; Porter v. Woods, 138 Mo. 539; Ins. Co. v. Water Co., 42 Mo.App. 118. (3) The contract and bond involved in the case at bar must be construed together, and the obligation of the sureties on the bond should not be enlarged beyond what is warranted by a fair and reasonable construction of its terms. Sexton v. Anderson, 95 Mo. 373; Houck v. Frisbee, 66 Mo.App. 16; Bauer v. Cabanne, 105 Mo. 110; Cochrane v. Stewart, 63 Mo. 424; Erath v. Allen, 55 Mo.App. 107; Bricken v. Stone, 47 Mo.App. 530.

R. M. Nichols for respondent.

Plaintiff, materialman of the sub-contractor, the Quernheim Company, is embraced within the meaning of the bond, both in its literal interpretation and under repeated decisions. Lime & Cement Co. v. Wind, 86 Mo.App. 163; State ex. rel. v. Loomis, 88 Mo.App. 500; Forge Co. v. Cullen & Stock, etc., 105 Mo.App. 484; St. Louis v. Von Phul, 133 Mo. 565; Devers v. Howard, 44 Mo. 671; School Dist. v. Livers, 147 Mo. 581; City of Bethany v. Howard, 149 Mo. 504; Crone v. Stinde, 156 Mo. 263; Lime & Cement Co. v. Bank, 158 Mo. 273.

OPINION

WOODSON, J.

This suit was instituted in the circuit court of the city of St. Louis by the plaintiff against the defendants, as the principal and sureties on a bond executed by them to the Board of Education of that city, conditioned that Hiram Lloyd, the principal, would faithfully perform a building contract therein mentioned, according to all the terms thereof, and should make payment to all parties furnishing materials used in the work provided for in said contract and specifications thereto annexed, including any alterations and additions that might be made, and for all labor performed on said work, whether by sub-contract or otherwise, then said obligation should be void, otherwise the same should remain in full force and virtue.

For a breach of said bond the plaintiff states that the said defendant, Hiram Lloyd, did enter into a contract with the Quernheim Steel Metal Works Company whereby the said Quernheim Steel Metal Works Company agreed to furnish all the sheet metal work required under the provisions of the aforesaid contract, and that pursuant to said contract and between the 11th day of March, 1902, and the 27th day of March, 1902, inclusive, the said Quernheim Sheet Metal Works Company did purchase and receive from this plaintiff twelve thousand, four hundred and thirty pounds of No. 24 gauge galvanized iron at $ 3.99 per 100 pounds, amounting to $ 495.96, and also one hundred and five pounds of half-and-half solder at seventeen cents per pound, amounting to $ 17.85, and amounting in all to $ 513.81, for which it failed to pay plaintiff; that the said Hiram Lloyd used said material in the construction of said school house, under the provisions of the said first-mentioned contract.

Plaintiff then states that it requested payment of said amount from defendant, Hiram Lloyd, and payment was refused; that it was familiar with the terms of the contract entered into between defendant Lloyd and the Board of Education, and that it relied on the provisions of the contract and bond as security for the payment of the material furnished by it, and prays judgment for the penalty of the bond, $ 52,128.50, and that its damages be assessed at $ 513.81 and costs.

The answer of defendants consisted of:

First. A general denial.

Second. The second defense alleged that the contract and bond were executed as alleged in the petition; that the Quernheim Sheet Metal Works Company did agree with defendant, Hiram Lloyd, to furnish the sheet metal work for the Emerson School; that said company did furnish it to defendant, Hiram Lloyd, and that said Lloyd paid Quernheim Sheet Metal Works Company all he had agreed to pay for the material furnished by that company. Then followed the general allegation: "Defendants further say that defendant, Hiram Lloyd, did erect, construct and build said school house, and did furnish at his own cost and expense all material used in the construction of the said Emerson School, and did pay the wages of all artisans and laborers and all those employed by or furnishing material to said Hiram Lloyd, and did make payment to all parties furnishing the same for all material used by said Hiram Lloyd in aforesaid work, provided for in the contract between said Hiram Lloyd and said Board of Education, and for all labor performed on such work, whether by sub-contract or otherwise."

Third. Defendants pleaded that the bond mentioned in plaintiff's petition provided that the obligee might assign the same to any sub-contractor, materialman or laborer, who at the instance of the principal obligor, had furnished work or material towards the completion of the contract, and that such subcontractor, materialman or laborer should have no benefit or right under the said bond until the same was so assigned. That the said bond was never assigned to plaintiff by the Board of Education and that plaintiff had no right or authority to institute or maintain this action.

Plaintiff's reply was a denial of the matters set forth in the answer.

There is no dispute regarding the facts of the case. The evidence shows that Lloyd entered into the contract with the Board of Education to construct the school house...