Board of Public Education in Wilmington v. The Aetna Casualty And Surety Co.
| Decision Date | 15 February 1932 |
| Citation | 35 Del. 100,159 A. 367 |
| Parties | BOARD OF PUBLIC EDUCATION IN WILMINGTON, a corporation existing under the laws of the State of Delaware, for the use of Brosius & Smedley Co., a corporation of the State of Delaware, v. THE AETNA CASUALTY AND SURETY CO., a corporation existing under the laws of the State of Connecticut |
| Court | Delaware Superior Court |
Superior Court for New Castle County, No. 71, November Term 1931.
Action of debt on bond executed by the defendant company as surety for David Lutz & Co., Inc., in connection with the contract awarded to that Company to erect a public school building, in the City of Wilmington, known as the Warner School. The bond in question was executed pursuant to the provisions of Chapter 224, Vol. 29, Laws of Delaware, and, among other things, provided that the obligors therein should "promptly pay all lawful claims of material men and laborers for labor performed and materials furnished in the carrying forward, performing or completing of said contract we agreeing and assenting that this undertaking shall be for the benefit of any material man or laborer having a just claim."
The statute above referred to (Chapter 224, Vol. 29, Laws of Del.), provided that before any public building contract should be awarded the contractor should furnish a bond conditioned that it would "well and truly pay to all and every person furnishing material or performing labor in and about such public improvement, all and every sum and sums of money due him for all such labor and materials for which the contractor is liable." It further provided that every person furnishing material or performing labor as aforesaid might maintain an action on said bond for his own use in the name of the State or the political subdivision thereof authorizing the contract, etc.
The plaintiff claimed that it had furnished lumber to Lutz & Co Inc., to be used by that company in connection with the carrying forward, performing, and completing of its contract for the erection of the Warner School, but had not been paid therefor.
It further claimed that the amount due it for such lumber was $ 872.32 with interest on $ 796.32 thereof from May 22, 1929, and on $ 76.00 thereof from June 15, 1929. The defendant company did not deny that the lumber in question had been furnished and delivered to Lutz & Co., on the site of the Warner School Building as claimed by the Brosius & Smedley Company, or that of the total quantity so delivered lumber to the value of $ 424.87 had been incorporated in that building.
It contended, however:
1. That the remainder of the lumber so delivered to the value of $ 447.45, had not been incorporated in said building but had merely been used by Lutz & Co., as scaffolding in connection with its erection.
It further contended that such lumber, therefore, merely constituted a part of the equipment of Lutz & Co., the contractor, and that its sale price could not be recovered in an action on this bond.
2. That while it had refused to pay for the lumber used for scaffolding, it had admitted its liability for the remainder of the lumber furnished by the Brosius & Smedley Company, and had offered to pay such balance of their claim about June 1, 1931, but that such offer had been rejected. That no interest could, therefore, be recovered on that part of its claim.
The case was heard by the Court without a jury. Other facts will appear in the opinion of the Court.
Judgment entered for the plaintiff.
John J. Morris, Jr., for plaintiff.
Aaron Finger for defendant.
The important question for us to determine is whether the cost of lumber which was used for scaffolding, but which was not actually incorporated in the building erected by the contractor, is covered by his bond.
The bond in question was executed pursuant to the provisions of Chapter 224, Vol. 29, Laws of Delaware, and provides for the payment of all lawful claims of "material men and laborers for labor performed, and materials furnished in the carrying forward, performing or completing" of the contract referred to in it.
It thus appears that its language is somewhat broader in its scope than the language of the old mechanic's lien statutes. See Revised Code 1915, § 2843. The same is also true of the statute pursuant to which this bond was executed. In interpreting its meaning we must also bear in mind that the Supreme Court of this state, in State, use of Pa. R. Co., v. AEtna Cas. & Surety Co., 4 W. W. Harr. (34 Del.) 158, 145 A. 172, 174, in considering a similar bond, adopted the rules applied in the Federal Courts and, therefore, held:
1. That the provisions of Chapter 224, Vol. 29, Laws of Delaware, and bonds given thereunder should be more liberally construed than the usual mechanic's lien statute.
2. That applying that rule of construction, it was not absolutely necessary for labor done to be directly incorporated in the work covered by the contract in order to come within the provisions of a contractor's bond given pursuant to the statute.
Referring to the particular case before it, and after citing numerous Federal cases and stating the facts involved in them, the court then in substance said that in determining whether services performed were covered by the contractor's bond, the test was not the place where they had been performed but the nature of such services and whether they had in a proximate sense contributed to the prosecution and completion of the work referred to in the bond. See, also, Amer. Surety Co. v. Lawrenceville Cement Co. (C. C.), 110 F. 717.
In this connection, the court also added: "With that as the test, labor and materials have been held as not too remote under the circumstances referred to in the cases above cited."
Largely based on this statement, the plaintiff apparently contends that the lumber furnished by the Brosius & Smedley Company, though merely used for scaffolding and not actually incorporated in the Warner School Building, was nevertheless used for a purpose so necessary to the carrying forward, performing and completing of the building to be erected, that it comes within the terms of the bond sued on.
As already intimated, the sole question before the court in Pa. R. R. Co. v. AEtna Cas. & Surety Co. was whether labor performed by a railroad company in transporting stone from a distant point to the place where it was subsequently incorporated in the road to be built, was covered by the contractor's bond.
That the same general principle applied in that case has in some cases been applied to materials furnished, though such materials were not actually incorporated in the building, or other work provided for by the contract, must be conceded; but whether it will govern a particular case necessarily depends on the facts of that case. That it was applied in favor of the seller in Tit. Guar. & Trust Co. v. Crane, 219 U.S. 24, 31 S.Ct. 140, 55 L.Ed. 72, and in Brogan v. Nat. Surety Co., 246 U.S. 257, 38 S.Ct. 250, 62 L.Ed. 703, L. R. A. 1918D, 776, was pointed out by the court in the Delaware case above referred to. Considering the facts involved in those cases it does not necessarily follow, however, that the same rule should be applied in this case.
Where lumber furnished is necessary, in some particular, to the completion of the work covered by the contract, and though not actually incorporated in the finished structure is so changed and consumed in its use, in a practical sense as to have lost its character and usefulness as lumber, the defendant company concedes that it is covered by the contractor's bond. It contends, however, that there is no evidence before us in this case that justifies the application of that principle; and that the lumber in question is, therefore, in the same category as a pick or shovel handle, or some other tool or implement used by the contractor in and about the construction of the school building covered by the contract, but not of such a character as to be ordinarily and necessarily consumed in its use on that particular contract. In other words, it contends that so far as the evidence shows this lumber merely constituted a part of the building equipment of Lutz & Co. that could be subsequently used by that company in other construction work.
The general principle relied on by the defendant company is well established in suits on bonds of this character. Perhaps its most usual application in the reported cases is to lumber necessarily used in making concrete forms and to lumber or other materials used in the preliminary false work necessary in the construction of bridges; but there is no reason why it should be confined to cases of that character if the evidence justifies its application.
In Beals v. Fidelity & Dep. Co., 76 A.D. 526, 78 N.Y.S. 584, 585, affirmed without opinion in 178 N.Y. 581, 70 N.E. 1095, the court in a suit on a bond and in connection with this principle said:
"Its purpose [the bond] was to afford protection to those whose labor performed the work under contract, and to those who furnished material which entered into and became a part of, or was naturally consumed in or about the completion of, the work in question."
See, also, Emp. State Surety Co. v. Des Moines, 152 Iowa 552, 131 N.W. 870, 132 N.W. 837; Nat. Surety Co. v. U.S. (C. C. A.), 228 F. 577, 586, L. R. A. 1917A, 336; Gary Hay & Grain Co. v. Carlson, 79 Mont. 111, 255 P. 722; Nye-Schneider, etc., Co. v. Bridges, et al., 98 Neb. 27, 151 N.W. 942; City Retail Lumber Co. v. Title Guar. & Surety Co., 72 Wash. 300, 130 P. 345, 43 L. R. A. (N.S.) 162, note.
None of these cases involved lumber used for scaffolding but there are dictums in several of them to the effect that...
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