Board of Education v. United States Fidelity & G. Co.

• Decision Date: 24 January 1911
• Citation: 134 S.W. 18,155 Mo. App. 109
• Court: Missouri Court of Appeals
• Parties: BOARD OF EDUCATION OF CITY OF ST. LOUIS v. UNITED STATES FIDELITY & GUARANTY CO.

134 S.W. 18

155 Mo. A. 109

BOARD OF EDUCATION OF CITY OF ST. LOUIS v. UNITED STATES FIDELITY & GUARANTY CO.

St. Louis Court of Appeals. Missouri.

January 24, 1911.

Rehearing Denied February 7, 1911.

1. PRINCIPAL AND SURETY (§ 59) — CONTRACT OF SURETYSHIP — CONSTRUCTION.

A contract of suretyship must be given a reasonable interpretation according to the intention of the parties as disclosed by the contract read in the light of the surrounding circumstances, and the purposes for which it was made.

2. SCHOOLS AND SCHOOL DISTRICTS (§ 81) — CONTRACTOR'S BONDS — LIABILITY OF SURETIES.

The obligation of the surety in a bond executed to the board of education of a city by a contractor to install heating and ventilating equipment in a school building is measured by the contract for the work and the bond, read together, and Rev. St. 1899, §§ 6761, 6762 (Ann. St. 1906, p. 3328), requiring contractors for public work to give a bond conditioned for the payment for materials and labor, and which gives a materialman or laborer the right to sue on the bond.

3. SCHOOLS AND SCHOOL DISTRICTS (§ 81) — CONTRACTOR'S BONDS — LIABILITY OF SURETIES.

Under Rev. St. 1899, §§ 6761, 6762 (Ann. St. 1906, p. 3328), requiring contractors for public work to give bond to secure payment for materials and labor, whether by subcontract or otherwise, and giving materialmen and laborers the right to sue on the bond, a bond which stipulates for the payment to the persons furnishing materials used in the work, and which authorizes an assignment of the bond to subcontractors, materialmen, and laborers, who at the instance of the contractor have furnished work or material for the work, binds the surety to answer for the default of the contractor, or the school authorities on the default of the contractor, but does not bind the surety to answer for the default of a third person unless he derives his right to do the work by contract with the contractor.

4. MUNICIPAL CORPORATIONS (§ 347) — CONTRACTOR'S BONDS — LIABILITY OF SURETIES.

Rev. St. 1899, § 6761 (Ann. St. 1906, p. 3328), requiring contractors for public work to execute bonds conditioned for the payment for materials and labor, whether by "subcontract or otherwise," and section 6762 (Ann. St. 1906, p. 3328), authorizing materialmen and laborers of any contractor to sue on the bond, are in pari materia, and must be read together, and, when so read, the only persons authorized to sue on the bond are those furnishing material or labor for any contractor or subcontractor.

5. PRINCIPAL AND SURETY (§ 185) — RIGHT OF SURETY — INDEMNITY.

A surety has a right to be indemnified by his principal for whatever sum he has paid out in discharge of the principal's obligation.

6. DISMISSAL AND NONSUIT (§ 7) — VOLUNTARY NONSUIT — CONDITION OF CAUSE.

Under Rev. St. 1909, § 1980, allowing plaintiff to take a nonsuit at any time before the case is finally submitted to the court or jury and not afterward, a plaintiff is not entitled to nonsuit his case where the case and the instructions for a verdict against him are taken under advisement without any reservation.

Appeal from St. Louis Circuit Court; Hugo Muench, Judge.

Action by the Board of Education of the City of St. Louis, at the relation of the Philip Carey Company, against the United States Fidelity & Guaranty Company. There was a judgment for defendant, and the relator appeals. Affirmed.

S. C. Rogers, for appellant. John M. Wood and Edw. C. Kehr, for respondent.

NORTONI, J.

This is a suit on a building bond executed under the statute relating to public buildings. The finding and judgment were for defendant, United States Fidelity & Guaranty Company, surety on the bond, and plaintiff prosecutes the appeal.

It appears the board of education of the city of St. Louis contracted with E. Kohlbry & A. De Laney, a copartnership doing business under the firm name of the National Engineering & Construction Company, to install the heating and ventilating equipment of the Baden public school building in the city of St. Louis, and defendant, United States Fidelity & Guaranty Company, became surety on their bond in the penal sum of $5,375. The bond was executed under and in accordance with the statute in such cases made and provided (see sections 6761, 6762, Rev. St. 1899 [Ann. St. 1906, p. 3328]), and is conditioned for the faithful performance by Kohlbry & De Laney, trading under the firm name of the National Engineering & Construction Company, in executing the contract in full accord with its provisions, and for the use and benefit of all persons furnishing material or labor thereunder. It seems Kohlbry & De Laney did not perform their undertaking, but a corporation, the Advance Engineering & Construction Company, subsequently formed, did so, and of this corporation it is said Kohlbry, one of the copartners who entered into the contract in the first instance, was president. But there is not a word in proof tending to show the Advance Engineering & Construction Company, a corporation, had any contractual relation whatever with the copartnership of Kohlbry & De Laney, or with the board of education. Relator, the Philip Carey Company, furnished and installed the covering for the steam pipes, which is parcel of the heating apparatus of the Baden school building, under a contract with the Advance Engineering & Construction Company, for which it was to receive the sum of $1,200, but there is nothing in the evidence tending to show that it had any contractual relation whatever with the copartnership of Kohlbry & De Laney, principal obligors in the bond, or with the board of education. The Advance Engineering & Construction Company, which is insolvent, omitted to pay for the material and labor employed in the pipe covering, and this suit is at the instance of the Philip Carey Company, relator, who installed the same for the amount of its debt, $1,200. It proceeds on the bond executed by defendant surety company under the statutes for the faithful performance of the contract of Kohlbry & De Laney and to the use of those who furnished labor or material thereunder. After hearing the proof, the court gave judgment for defendant surety company on the theory that plaintiff's claim is not enforceable against, or, in other words, within, the obligation of the bond as it was contracted by the Advance Engineering & Construction Company, which was neither mentioned in the bond nor shown to be in privity with Kohlbry & De Laney, the principal obligors. In other words, the court by its judgment declared that, though relator furnished the material and installed the covering of the pipes to the extent of $1,200, it may not recover against defendant surety on the bond, for the reason it does not appear the material was furnished or the labor performed under a contract with, or at the instance or request of, the original contractors, Kohlbry & De Laney, whose conduct was assured by defendant or with the board of education, which it appears was authorized to complete any portion of the work not installed by the contractors.

It is argued here that notwithstanding the fact that there was no contract on the part of the Advance Engineering & Construction Company, which installed the heating and ventilating apparatus, and the principal obligor in the bond, Kohlbry & De Laney, whose contract was assured thereby, and notwithstanding there was no contract between the Advance Engineering & Construction Company or relator, the Philip Carey Company, with the board of education to perform the task contracted for and omitted by Kohlbry & De Laney, the court erred in its judgment, for the reason it conclusively appears the material furnished and labor performed by relator entered into the construction of the school building. The bond in suit is a statutory obligation executed by the authority of and in accordance with sections 6761, 6762, Rev. St. 1899 (Ann. St. 1906, p. 3328), and there can be no doubt of the proposition that by its execution these statutes became part and parcel of the obligation assumed by the surety. State ex rel. v. Manhattan Rubber Mfg. Co., 149 Mo. 181, 212, 50 S. W. 321. But, after conceding the proposition suggested, we have been unable to discover anything in the sections of the statute when read together which extends the obligation of the bond beyond its terms to include the debt of a person for materials and labor furnished to one who is not an obligor in the bond such as the contractor or in some relation of privity with him such as a subcontractor under him, unless it be in the case of a materialman or laborer furnishing material or labor to either the contractor or subcontractor. That the Advance Engineering & Construction Company to whom relator furnished the material and labor is neither the contractor, the performance of whose obligation is vouchsafed in the bond, nor a subcontractor under the original contractors, Kohlbry & De Laney, is conceded, and the case concedes, too, there is no contractual relation whatever between the board of education and the Advance Engineering & Construction Company, with whom relator contracted his debt, for no such relation between the board of education and the Advance Engineering & Construction Company was either shown or sought to be shown in the proof. This being true, it is obvious that, though relator furnished the material and labor for covering the pipes at the instance of the Advance Engineering & Construction Company, it is not to be regarded as either a materialman or laborer in the eye of the law, for the reason the essential privity of contract between its debtor and the owner of the building or original contractor is absent. Though a surety is regarded as a favorite of the law and the obligation of suretyship in its application to concrete facts is therefore considered strictissimi jurris, the suretyship contract itself is nevertheless interpreted and construed in accord with the identical rules which...