City of St. Louis to use of Contracting & Supply Company v. Hill O'Meara Construction Company

• Citation: 158 S.W. 98,175 Mo.App. 555
• Parties: CITY OF ST. LOUIS to use of CONTRACTING & SUPPLY COMPANY, Respondent, v. HILL O'MEARA CONSTRUCTION COMPANY et al., Appellants
• Decision Date: 24 June 1913
• Court: Court of Appeal of Missouri (US)

158 S.W. 98

175 Mo.App. 555

CITY OF ST. LOUIS to use of CONTRACTING & SUPPLY COMPANY, Respondent, v. HILL O'MEARA CONSTRUCTION COMPANY et al., Appellants

Court of Appeals of Missouri, St. Louis

June 24, 1913

Appeal from St. Louis City Circuit Court.--Hon. Leo S. Rassieur Judge.

Judgment affirmed.

Robert E. Collins for appellant.

The main contractor having paid the subcontractor the contract price in full, the materialman who furnished material to the subcontractor was not entitled to recover on the bond furnished by the main contractor, and the court below erred in refusing defendants' instruction and in finding in favor of the plaintiff. Berger Mfg. Co. v. Lloyd, 209 Mo. 681.

Blodgett & Hogan and Chas. W. Bates for respondent.

(1) The right of the materialman who furnished material for the building, which material went into the building, under contract with the contractor's subcontractor, to recover on the bond given by the contractor, and sued on in this case, under the provisions of the ordinances of the city of St. Louis, is clear. Revised Code of St. Louis, 1907, secs 1988 and 1989; St. Louis v. Von Phul, 133 Mo. 561; Kansas City v. Youmans, 213 Mo. 151; United States v. Surety Co., 200 U.S. 197. (2) The right of a materialman, who furnished material for the building, which material went into the building, under contract with the contractor's subcontractor, to recover on the contractor's bond, sued on in this case, under the statutes of the State of Missouri, is clear. 2 R. S. 1899 secs. 6761 and 6762 (with amendment, not pertinent to this case, these sections became secs. 1247 and 1248, R. S. Mo. 909); Board Fidelity & Guaranty Co., 166 Mo.App. 410. (3) The right of the materialman who furnished material for the building, and which material went into the building, under contract with the contractor's subcontractor, to recover on the contractor's bond, sued on in this case as a common law bond, irrespective of either statutory or ordinance provisions, is clear. Lumber Co. v. Schwartz, 163 Mo.App. 659. (4) While the liability of the surety extends to those only who have done labor or furnished material in privity by contract with the original contractor, those are in privity of contract with the original contractor who do labor or furnish material for the building to the subcontractor under the original contract. Board v. Fidelity & Guaranty Co., 166 Mo.App. 410; Lime & Cement Co. v. Wind, 86 Mo.App. 163; Pressed Brick Co. v. School District, 79 Mo.App. 665; Lumber Co. v. Schwartz, 163 Mo.App. 659; Board v. Fidelity & Guaranty Co. , 155 Mo.App. 109. (5) The contractor's bond is a continuing guaranty. The defense set up by appellants that the original contractor paid out more money to complete the work contracted for by the subcontractor than the subcontractor's contract with the original contractor called for, is no defense to this action on the original contractor's bond by the materialman who furnished material for the building under the contract with the subcontractor in reliance on the bond, such material having entered into the building which was accepted by the original contractor and by the owner of the building under the original contract. Kansas City to Use v. Youmans, 213 Mo. 151; Sash & Door Co. v. Buckner, 80 Mo.App. 95. (6) As no lien is provided for publicly owned buildings, it was the purpose of the statutory and ordinance provisions to substitute the obligation of a bond for the security furnished by the mechanics' lien statutes on privately owned buildings. The statutes, ordinances and contractor's bond are to be construed with the purpose in view and so as to effectuate such purpose to the extent that the language used will permit. Board v. Fidelity & Guaranty Co., 155 Mo.App. 109, 166 Mo.App. 410; Press Brick Co. v. School District, 79 Mo.App. 665; United States v. Surety Co., 200 U.S. 197.

ALLEN, J. Reynolds, P. J., and Nortoni, J., concur.

OPINION

ALLEN, J.

This is an action on the bond of a contractor for the erection of an addition to the insane asylum of the city of St. Louis, brought in the name of said city to the use and for the benefit of the relator, the Contracting & Supply Company, to recover a balance alleged to be due the relator for materials furnished to and for such building under contract with a subcontractor of the defendant, Hill-O'Meara Construction Company, the latter being the original contractor. All the parties to the record are corporations. The plaintiff recovered and the defendants prosecute the appeal.

It appears that on September 17, 1908, the defendant, Hill-O'Meara Construction Company, entered into a written contract with the city of St. Louis, whereby it contracted and agreed to construct certain additions to the insane asylum of said city. This contract contains the bond here sued upon, which was executed by the defendant, Hill-O'Meara Construction Company, as principal, and its codefendant, the Mississippi Valley Trust Company, as surety. The bond is conditioned that the defendant "shall faithfully and properly perform the foregoing contract according to all the terms thereof, and shall, as soon as the work contemplated by said contract is completed, pay to the proper parties all amounts due for material and labor used and employed in the performance thereof." The bond also provides that "the same may be sued upon at the instance of any materialman, laboring man, or mechanic, in the name of the city of St. Louis, to the use of such materialman, laboring man or mechanic, for any breach of the conditions thereof."

The essential facts are not in dispute. It appears that on or about July 10, 1909, the defendant, Hill-O'Meara Construction Company, the contractor, sublet to Smith & Watson Company, a corporation, that portion of the work to be done under the contract, designated as "plastering." It further appears that there after, in reliance upon the contract of the Smith & Watson Company with the defendant, Hill-O'Meara Construction Company, the contract of the latter with the city and the bond here sued upon, and at the special instance and request of the Smith & Watson Company and under contract with it, the relator from time to time furnished for and delivered to said building, while in the process of construction, certain plaster, lime, cement and other materials, which were actually used in the construction of said building in the manner contemplated by the said contract for the erection thereof; that the prices charged for the materials so furnished as shown by the account filed with the petition, were the prices agreed upon between the relator and the said Smith & Watson Company, and were the reasonable value of the materials so furnished; and that the balance of $ 2735.14 remained due plaintiff on account thereof.

The evidence discloses that, after doing a portion of the plastering work, the Smith & Watson Company, having in the meantime changed its corporate name, abandoned its contract with the defendant, Hill-O'Meara Construction Company, for doing of said plastering, and that the defendant, Hill-O'Meara Construction Company, was compelled to and did there-after complete this work; that the payments made by the defendant Hill-O'Meara Construction Company to the Smith & Watson Company, or its successor, up to the time of the abandonment of said work, together with the amounts paid out by said defendant to other persons for completing the work to be done under said plastering contract, exceeded the price for which the Smith & Watson Company agreed to do the same.

The suit was instituted within ninety days after the completion of the work, as required by the ordinance under which the bond was given. [Sections 1988 and 1989 of Woerner's Revised Code of the City of St. Louis (1907), now Sections 253 and 254 of the Revised Code of said City (Rombauer, 1912).] The cause was tried before the court without a jury. The court found the issues against the defendants, and entered judgment for the relator and against the defendant Hill-O'Meara Construction Company, as principal, and defendant Mississippi Valley Trust Company, as surety, for the sum of $ 3,000,000, the penalty of the said bond, to be satisfied upon payment of the said sum of $ 2735.14 damages, with interest at the rate of six per cent per annum from the institution of the suit.

The only question involved in the appeal pertains to the right of one to recover on a bond such as this, who furnishes material at the instance and request of a subcontractor, by delivering the same to the building under construction and which is actually used in the construction thereof. Appellants contend that there can be no recovery upon the bond in such a case, where the original contractor has paid the subcontractor the full contract price for the work to be done by the latter. The appellants' position is that the contractor, the Hill-O'Meara Construction Company, paid the subcontractor, Smith & Watson Company, the latter's full contract price for the work to be done by it. This is denied by the relator upon the ground that the contractor had paid to the Smith & Watson Company less than one-half of the amount of its contract price at the time of its abandonment of the work; the payments made thereafter by the contractor on account of the plastering work having been made to others, for the account of the Smith & Watson Company, in the completion of this work. We do not consider the question of payment to the subcontractor material, however, in the view that we take of the case.

The bond is literally in accord with the provisions of the Revised Code of the City of St. Louis above referred to. The statutory provisions concerning such bonds, in force at the time that the contract was entered into, were ...