Brown Bros. v. Columbia Irr. Dist.

• Decision Date: 16 November 1914
• Docket Number: 11995.
• Citation: 144 P. 74,82 Wash. 274
• Parties: BROWN BROS. v. COLUMBIA IRR. DIST.
• Court: Washington Supreme Court

144 P. 74

82 Wash. 274

BROWN BROS. v. COLUMBIA IRR. DIST.

No. 11995.

Supreme Court of Washington

November 16, 1914

Department 1. Appeal from Superior Court, Spokane County.

Action by Brown Bros., a corporation, against the Columbia Irrigation District. Judgment for plaintiff, and defendant appeals. Affirmed.

Jesseph & Bourland, of Colville, and Osee W Noble, of Kettle Falls, for appellant.

Danson Williams & Danson, of Spokane (Geo. D. Lantz, of Spokane, of counsel), for respondent.

CHADWICK J.

Defendant is organized under the irrigation district law of the state of Washington, and, as such, let a contract to the Spokane Concrete Company for the construction of an irrigation system for the district. The Spokane Concrete Company purchased supplies and materials from plaintiff. Its account not having been paid, it began an action against the defendant, which appeared and demurred to the complaint. The demurrer was overruled, and defendant standing upon its demurrer, has appealed to this court from a judgment as prayed for.

It is the contention of the defendant that it cannot be held to answer to the suit of plaintiff for two reasons: First because it took a bond from the Spokane Concrete Company conditioned for the payment of all claims for labor, material, and supplies, as provided in Rem. & Bal. Code, §§ 1159-1161; or, second, if it be held that the bond taken did not comply with the statute, the defendant corporation is not one of those specified within Rem. & Bal. Code, § 1160, and, there being no common-law liability, the complaint does not state a cause of action. The bond runs to the defendant, and is not conditioned as the statute requires. It is admitted that the bond is insufficient for want of condition, unless the contract is read into and made a part of the bond. The obligation of the bond is:

'Now, therefore, the condition of this obligation is such that, if the principal shall faithfully perform all the terms and conditions of said contract and indemnify the obligee against any loss or damage directly arising by reason of the failure of the principal to faithfully perform said contract, then this obligation shall be void; otherwise to remain in full force and effect. * * * Fifth. That no right of action shall accrue upon or by reason hereof, to or for the use or benefit of any one other than the obligee herein named; and that the obligation of the surety is, and shall be construed strictly as, one of the suretyship only, shall be executed by the principal before delivery, and shall not, nor shall any interest therein or right of action thereon, be assigned without the prior consent, in writing, of the surety.'

The terms of the contract relied upon by defendant to sustain its theory are:

'And that all excavations shall be made and back-filled, and all work done and materials furnished hereunder by the first party hereto at its own cost and expense and without cost or charge to the second party, and that no person or persons performing work or labor hereunder or furnishing material hereunder shall have any lien against the second party therefor, but that all work done and materials furnished in the carrying out and completion of this contract shall be done exclusively on the credit of the first party hereto.'

Counsel cite many cases holding that a bond given to insure the faithful performance of a contract is to be read in connection with, and as a part of, the contract when an action is brought to recover thereon. We have no doubt of the rule. It has been held by this court in a number of cases. Friend v. Ralston, 35 Wash. 429, 430, 77 P. 794; McDonald v. Davey, 22 Wash. 366, 60 P. 1116; Trinity Parish v. AEtna Indemnity Co., 37 Wash. 515, 79 P. 1097; Martin v. Surety Co., 53 Wash. 290, 101 P. 876. But in all of those cases, and the rule is universal, the action was waged between the parties to the contract. The bond the statute requires is in aid of the laborer, materialmen, and those who furnish supplies to be used upon public works, and is designed to give a remedy that was not known or encouraged at common law. In so far as the claimant is concerned, the contract between the public or municipal corporation and the contracting party is wholly immaterial. If it were not so, a contract and bond might be so drawn as to work an exemption under the statute by providing that a settlement or payment by the municipal corporation to the contracting party would exonerate the bond, or, as in this case, by providing that no action could be maintained on the bond by any one other than the obligee.

Although assailed by counsel we think, nevertheless, that the case of Puget Sound Brick Co. v. School District, 12 Wash. 118, 40 P. 608, is controlling. It was there conceded, and we think it is so here, that the bond was not one upon which an action could have been maintained by the one who had furnished material to the contractor, and it was also admitted, as it is here, that the bond was insufficient if construed independently of the contract. It was held that the school district had not protected itself as required by statute, and was liable to one who had furnished supplies to the contractor for the erection of the building. Greenfield Lbr. & Ice Co. v. Parker, 159 Ind. 571, 65 N.E. 747.

It is contended that the Puget Sound Brick Company Case is in conflict with the later cases of Wheeler, Osgood & Co. v. Everett Land Co., 14 Wash. 630, 45 P. 316, and Crowley v. U.S. F. & G. Co., 29 Wash. 275, 69 P. 784. But these cases, like others cited, were waged between the contracting parties. The statute controlling this case was in no way invoked. Moreover, the defendant has itself construed the bond as personal to itself. It is alleged in the complaint, and is admitted as a fact, that after the sale and delivery of the material furnished by plaintiff, the defendant entered into an agreement to settle with its surety, and agreed that the bond should be surrendered, and that it was then and there canceled and surrendered to the surety company. We think it is clear that plaintiff has a right of action against the defendant for its failure to take a statutory bond. Whether the defendant has a right of action against its surety is a question we do not express any opinion upon.

Coming to the second proposition: Session Laws 1887-88, c. 22, § 1, p. 15, reads as follows:

'Whenever the board of county commissioners of any county of this territory, or the mayor and common council of any incorporated city or town or the tribunal transacting the business of any municipal corporation. * * *'

Section 2 of the act as originally drawn, provided that 'if any board of county commissioners of any county, or the mayor and common council of any incorporated city or town, or tribunal transacting the business of any municipal corporation,' shall fail to take a bond, such county, city, or town or other municipal corporation shall be liable to the persons furnishing labor, supplies, or material. The Legislature of 1897 (Session Laws 1897, p. 57) amended section 1 of the original act as follows:

'Whenever any board, council, commission, trustees * * * or any county or municipality or any other public body shall contract with any person or corporation.' (Italics are ours.)

By this amendment public bodies other than those mentioned in the original act were made amendable to the statute. The Legislature of 1909 (Session Laws 1909, p. 716) reenacted the law, clarifying in some degree the first section of the act. No change of any kind was made in section 2, and it is contended that, inasmuch as an irrigation district is a public body within the meaning of the first section of the act as it now stands, and such descriptive words are not included in the first section of the act, that the irrigation district does not come within the penal clauses of the statute, and it is therefore not liable. We may grant that this is true, unless the Legislature when passing the act adopted and re-enacted the words 'or other municipal corporations' (section 2) as sufficient to include any or all of the bodies designated in the first section of the act as 'board,' 'trustees,' or 'municipality or any other public body.' To meet this suggestion it is contended that this act was passed at a time when this court had declared, in Board of Directors v. Peterson, 4 Wash. 147, 29 P. 995, that an irrigation district formed under the statute providing for the organization of irrigation districts was not a municipal corporation. The question there considered was whether an irrigation district was a municipal corporation within the meaning of section 6, art. 8, of the Constitution, which puts a limit upon the indebtedness that can be incurred by 'county, city, town, school district, or other municipal corporation.' In discussing the case, the broad ancient definition of a municipal corporation was adopted; that is, 'for the purposes...