Central of Georgia Ry. Co. v. U.S. Fidelity & Guaranty Co.

• Decision Date: 15 October 1931
• Docket Number: 4 Div. 508.
• Citation: 223 Ala. 458,137 So. 36
• Court: Alabama Supreme Court
• Parties: CENTRAL OF GEORGIA RY. CO. v. UNITED STATES FIDELITY & GUARANTY CO. ET AL.

137 So. 36

223 Ala. 458

CENTRAL OF GEORGIA RY. CO. v. UNITED STATES FIDELITY & GUARANTY CO. ET AL.

4 Div. 508.

Supreme Court of Alabama

October 15, 1931

Appeal from Circuit Court, Covington County; Emmet S. Thigpen Judge.

Suit on road contractor's bond by the Andalusia Manufacturing Company against R. S. Taylor and the United States Fidelity &amp Guaranty Company, wherein the Central of Georgia Railway Company intervened. From a judgment denying its claim, the intervener appeals.

Reversed and remanded.

Steiner Crum & Weil, of Montgomery, and Powell, Albritton &amp Albritton, of Andalusia, for appellant.

Coleman, Coleman, Spain & Stewart, of Birmingham, for appellees.

BROWN J.

The appellant was permitted to intervene along with the Roquemore Gravel Company, in a suit filed by the Andalusia Manufacturing Company against R. S. Taylor, the contractor, and United States Fidelity & Guaranty Company, the surety on his bond given in pursuance of the provisions of section 28, subdivision (a), of the Act approved August 23, 1927, Acts of 1927, p. 356, known as "the Alabama Highway Code," for the faithful and prompt performance of the contract and all conditions and requirements thereof, in respect to project No. S-273, for the building of 3.30 miles of paved road in Covington county, and obligating the principal and surety to "promptly make payment to all persons supplying him or them with labor, material, feed-stuffs, or supplies, in the execution of the work provided for in such contract."

The trial resulted in a judgment in favor of the plaintiff, and the intervener Roquemore Gravel Company, and against the appellant, for the reason, as the judgment recites, that appellant's claim "is not a proper charge against the bond."

From the judgment against it, appellant on April 16, 1930, appealed. Thereafter the surety company, appellee in this case, on June 20, 1930, appealed from the judgment against it in favor of the Roquemore Gravel Company.

The suggestion in brief that this appeal should be dismissed, because the appellant did not join in the appeal taken by the surety company, is without merit for two reasons: (1) The appeal in this case was first in order, and no duty rested upon the appellant here to abandon its appeal and join in the later appeal; and (2) the case was submitted on the merits without motion to dismiss, and, if any irregularity intervened, it was waived. Robinson v. Murphy, 69 Ala. 543; Lewis et al. v. Jenkins, 215 Ala. 680, 112 So. 205.

The suggestion that the transcript filed on this appeal should be stricken is also without merit. The transcript was substituted for the original by written agreement of the parties before the submission of the case.

The claim of the appellant in part is for freight incurred in carrying sand and gravel supplied by the Roquemore Gravel Company, consigned to the contractor, R. S. Taylor, and on cement shipped by the state highway department to said contractor, all of said materials being shipped for use by the contractor in the performance of the contract. And in part for demurrage on cars used in the shipment of said materials which the contractor failed or neglected to unload within the free time allowed for unloading by the established traffic regulations and the "average contract" in respect thereto, entered into by the carrier and the contractor, and as authorized by such regulations.

The evidence shows that said materials were received and receipted for by the contractor; that the freight and demurrage charges were made in the usual course, and at the authorized rate, and have not been paid.

The question of controlling importance, and the one ground on which the trial court apparently denied the appellant's claim, arises on the contention of appellees that the claim is not for "labor or material," and therefore is not within the purview of the statute and the obligation of the bond. On this question the decisions are not in agreement.

As has been stated in several of our cases, the Alabama statute is in the main the same as the federal law, and we have treated the federal decisions as highly pursuasive, if not controlling, in the construction of our statute. United States Fidelity & Guaranty Co. v. Benson Hardware Co., 222 Ala. 429, 132 So. 622.

The reasoning of the cases holding nonliability is clearly stated in Mandel et al. v. United States, to Use of Wharton & N. R. Co. et al., 4 F. (2d) 629, 631, decided by the Circuit Court of Appeals, Third Circuit, as follows: "The question therefore is: Was the claim of the railroad for freight and demurrage recoverable under the statutory bond, conditioned that the contractors 'shall promptly make payments to all persons supplying him or them labor and materials in the prosecution of the work provided for in such contract'? The court below allowed these items, but we cannot accede to this view. The words 'labor and material,' used by Congress in this statute, are plain words of well-understood meaning, and in the common use and acceptance car demurrage and car freight are not described or embraced by the words 'labor and material.' Moreover, there is no call for the exercise of judicial construction to give to demurrage and freight the protection of this statutory bond. There was a real hardship to labor and materialmen who worked upon, or furnished material for, a structure or improvement on government property. They could have no lien and no way of protecting themselves. Accordingly the statute required from the contractor a statutory bond and approved surety responsibility for the protection of unprotected labor and material. But the railroad required no such protection. It could refuse to deliver to the contractor until both freight and demurrage were paid. Hence neither the words of the bond allow, nor the spirit and purpose of the law require, that judicial construction to enlarge or construe the words 'labor and material' so as to include freight and demurrage. We agree with what was said by the Circuit Court of Appeals of the Fifth Circuit in United States v. Hyatt. 92 F. 445, 34 C. C. A. 447: 'Congress could not have intended to include in the term "labor," as used in this act, the freight charges of a railroad on materials carried by it. The railroad is abundantly protected by its lien on freight."'

The following cases are to the same effect: American Surety Company v. Lawrenceville (C. C.) 110 F. 717-721; Wisconsin Brick Company v. National Surety Company, 164 Wis. 585, 160 N.W. 1044, L. R. A. 1917C, 912.

In Franzen v. Southern Surety Company, 35 Wyo. 15, 246 P. 30, 35, 46 A. L. R. 496, decided by the Wyoming Supreme Court, that court observed: "The rule as to cost of transportation is not yet as clear as might be wished. It has been held by some courts, which have had occasion to pass upon the point, that a railroad company will not have any claim under such bond, mainly for the reason that it has an independent lien which it may readily assert, and because it cannot be said that payment for such item was in contemplation of the parties when the bond was executed. United States use of Sabine & E. T. R. Co. v. Hyatt, 34 C. C. A. 445, 63 U.S. App. 767, 92 F. 442; Wisconsin Brick Co. v. National Surety Co., 164 Wis. 585, L. R. A. 1917C, 912, 160 N.W. 1044; Union Traction Co. v. Standard Brick Co. (Union Traction Co. v. Kansas Casualty & S. Co.) 112 Kan. 774, 30 A. L. R. 464, 213 P. 169. See, also, United States ex rel. McAllister v. Fidelity & D. Co., 86 A.D. 475, 83 N.Y.S. 752. On the other hand, it is held that necessary cost of transportation for which no lien exists, or in cases where the lien is not usually asserted, or is impracticable to be asserted at time of transportation, may be recovered under such bond. Portland v. New England Casualty Co., 78 Or. 195, 152 P. 253; American Surety Co. v. Lawrenceville Cement Co. (C. C.) 110 F. 717; Title Guaranty & T. Co. v. Crane Co., 219 U.S. 24, 55 L.Ed. 72, 31 S.Ct. 140; Illinois Surety Co. v. John Davis Co., 244 U.S. 376, 61 L.Ed. 1206, 37 S.Ct. 614. And, doubtless, where the party furnishing materials pays freight and haulage charges, such charges are a proper part of the cost of the material. Nye-Schneider-Fowler Co. v. Bridges, H. & Co. [98 Neb. 27, 151 N.W. 942], supra. And such items, if within the contract price, seem to be allowed even in the case of mechanic's liens. 27 Cyc. 44. See, also, note 43 L. R. A. (N. S.) 170, and note L. R. A. 1915F, 953."

And in United States Fidelity & Guaranty Co. v. Benson Hardware Co., supra, "A bond under the federal act also includes work done at the quarry, fifty miles away, and the labor of men who stripped the earth to get to the stone, and carpenters and blacksmiths who repaired the cars in which the stone was carried to the dock for shipment, and of stablemen who fed and drove the horses which moved the cars, United States Fid. & Guar. Co. v. U. S., 231 U.S. 237, 34

S. Ct. 88, 58 L.Ed. 200; also amounts paid for the rental of cars, tracks, and other equipment used by the contractor, Illinois Surety Co. v. John Davis Co., 244 U.S. 376, 37 S.Ct. 614, 61 L.Ed. 1206; also amounts paid for cartage and towage," etc. (222 Ala. 429, 132 So. 622, 626).

This court has held that claims for hauling material and transporting workmen by ferryboats are covered by the bond. Union Ind. Co. v. State, for Use of McQueen Smith Farming Co., 217 Ala. 35, 114 So. 415; Union Indemnity Co. v. State, for Use of Armstrong, 218 Ala. 132, 118 So. 148.

In the City of Stuart, for Use and Benefit of Florida East Coast Ry. Co. v. American Surety Co. of New York, 38 F (2d) 193, 194, 195, involving a claim for freight and demurrage, decided by the United States Circuit Court of Appeals, Fifth Circuit, the claim was sustained. The...