Clatsop County v. Fidelity & Deposit Co. of Maryland

• Decision Date: 06 April 1920
• Citation: 189 P. 207,96 Or. 2
• Parties: CLATSOP COUNTY, FOR USE OF FRYE & CO., v. FIDELITY & DEPOSIT CO. OF MARYLAND ET AL.
• Court: Oregon Supreme Court

189 P. 207

96 Or. 2

CLATSOP COUNTY, FOR USE OF FRYE & CO., v. FIDELITY & DEPOSIT CO. OF MARYLAND ET AL.

Supreme Court of Oregon

April 6, 1920

In Banc.

Appeal from Circuit Court, Multnomah County; George W. Stapleton Judge.

Action by Clatsop County, State of Oregon, for the use and benefit of Frye & Co., against the Fidelity & Deposit Company of Maryland and others and F. A. Hadley. From judgment for defendants, plaintiff appeals. Judgment reversed, and judgment directed for plaintiff.

This is an action instituted by Clatsop county for the use and benefit of Frye & Co., a corporation, engaged in the sale of meat and meat products with its principal office in Seattle Wash., and one of its branches at Portland, Ore., against the defendants, who are the original contractor, its surety, and subcontractors, upon a bond guaranteeing the performance of a contract for the construction of a part of the Columbia Highway. The cause was tried by the court without the intervention of a jury.

Upon the trial Frye & Co., the use plaintiff, introduced testimony showing substantially the following facts: In May, 1914 Boyajohn-Arnold Company entered into a contract with Clatsop county to build a portion of Columbia Highway, agreeing to make payment promptly for labor and materials. Pursuant to the requirements of section 6266, L. O. L., as amended (Laws 1913, p. 59), Boyajohn-Arnold Company, as principal, and Fidelity & Deposit Company of Maryland, as surety voluntarily gave the required bond to the county conditioned, among other things, to "pay all laborers, mechanics, subcontractors and materialmen and all persons who shall supply such laborers, mechanics or subcontractors with materials, supplies or provisions for carrying on such work and all just debts, dues and demands incurred in the performance of such work." Boyajohn-Arnold Company sublet the contract to Peterson & Johnson, copartners, and they in turn sublet a portion of the contract, involving the clearing and grading of a portion of the highway to F. A. Hadley. Hadley fully performed his subcontract. The portion of the highway which Hadley graded ran through an unsettled region remote from any city or boarding place, and extended over a distance of about 10 miles. He employed a crew of itinerant men thereon ranging in number from 35 to 100. Hadley found it essential to establish two boarding camps along the line of the work whereat the men could eat. Except for the presence of his camps, the men would have quit the work, and could not have been kept together. There was no other place for the men to eat when on the job but at Hadley's camps. Hadley was compelled to establish camps for his laborers, at which he boarded them. It was necessary to board the laborers at the scene of the work in order to retain their services and prosecute the work. Such work cannot be performed in such an unsettled country unless boarding places for the laborers be maintained upon the work. The men paid no cash for their board. Hadley credited each man with wages in an amount large enough to cover the value of the man's labor. In paying the men each man received a check equal to the value of his labor, less the value of his board, which Hadley figured at the rate of 30 cents per meal. For example, if a man's labor had a value of $3 per day, he received therefor his board, plus a check for $2.10.

Relying upon the protection given it by such bond, Frye & Co., the use plaintiff, sold the meats, the price of which is the subject of this action, to Hadley for use in his boarding camps. All of them were so used. Relator, Frye & Co., has never been paid for the meats, although demand therefor was made upon each of the defendants and respondents. Defendant F. A. Hadley was not served with a summons, and did not answer.

At the close of plaintiff's case in chief respondents moved for a judgment. The motion was granted, and judgment rendered accordingly, from which plaintiff appeals. The defendants introduced no testimony. Therefore there is no controversy in regard to the facts.

The trial court found, in addition to the formal findings as to the corporate character of some of the parties, the partnership of Peterson & Johnson, the execution of the contract and bond, the description of the highway, and the furnishing of the supplies of meat by the use plaintiff to Subcontractor Hadley, substantially in accordance with the above statement, finding No. 10 being worded as follows:

"That the said meats so furnished to said defendant F. A. Hadley were used and consumed by him in a boarding house maintained and operated by said defendant F. A. Hadley, along the line of said work for the convenience of said men, and whereat a portion of the men employed by said F. A. Hadley on the work performed by him on said Columbia Highway took their meals; that said men so employed on said work were paid by the said F. A. Hadley wages for the labor performed by them at the rate of $2.25 to $3.50 per day for each day said men were actually employed on said work, in full payment for their services, and the said F. A. Hadley charged each man so employed on said work at the rate of 30 cents per meal for each meal consumed by him at said boarding house, and at the time of the payment of the wages earned by said men, as aforesaid, the said F. A. Hadley deducted from the amount of the check given in payment for such labor the amount due to said F. A. Hadley for the meals so furnished by him to his said employés."

As a conclusion of law the trial court found inter alia as follows:

"That the said meats so furnished by the said relator to the said F. A. Hadley did not come within the provisions of the contract referred to in the findings of fact or the provisions of section 6266, Lord's Oregon Laws, as amended by chapter 27 of the Laws of Oregon of 1913, inasmuch as they did not, nor do they, constitute labor or material for the prosecution of the work provided for in the contract."

Teal, Minor & Winfree and Thaddeus W. Veness, all of Portland, for appellant.

Palmer L. Fales, Malcolm H. Clark, Bert W. Henry, and Harrison Allen, all of Portland, for respondents.

BEAN, J. (after stating the facts as above).

It is the contention of the plaintiff that food used in a necessary boarding house for laborers employed in the prosecution of public work provided for in a contract secured by a bond given pursuant to section 6266, L. O. L. as amended, is included within the terms "labor and materials," and protected by the statutory bond.

It appears that upon the trial of the case the theory of the respondents was to the contrary. There is some contention upon the part of the respondents that the trial court did not find that the board of the men engaged in the labor was necessary "for any prosecution of the work." We do not so understand the findings. In any event the undisputed testimony in the case is that the board of the men furnished by the subcontractor near the work was absolutely necessary in order to retain the laborers and obtain their assistance in the prosecution of the work.

Section 6266, L. O. L., as amended, was enacted to protect all persons supplying a contractor performing public work, labor or materials for any prosecution of the work provided for in the contract. The law was intended for the benefit of the individual assisting in the furtherance of the undertaking, and also for the benefit of the public. It should be given a liberal construction in order to carry out the legislative intent. School Dist. No. 30 v. Alameda Const. Co., 87 Or. 132, 169 P. 507, 788; Columbia County v. Consolidated Const. Co., 83 Or. 251, 260, 268, 163 P. 438; Multnomah Co. v. U.S. Fidelity & Guaranty Co., 87 Or. 198, 207, 170 P. 525, L. R. A. 1918C, 685; Philadelphia v. Stewart, 195 Pa. 309, 45 A. 1056.

Our statute is practically a counterpart of the federal act of August 13, 1894, from which it was derived. Since this case was tried in the circuit court, a parallel case has been determined by the Supreme Court of the United States. Brogan v. National Surety Co., 246 U.S. 257, 38 S.Ct. 250, 62 L.Ed. 703, L. R. A. 1918D, 776. The facts in that case were these: The Standard Contracting Company undertook to deepen the channel of St. Mary's river, Mich., located "in a comparative wilderness at some distance from any settlement. There were no hotels or boarding houses," and the contractor "was compelled to provide board and lodging for its laborers." Groceries and provisions of the value of $4,613.87, furnished it by Brogan, were used by32 the contractor in its boarding house, and were supplied "in the prosecution of the work provided for in the contract and the bond upon which the suit is based. They were necessary to and wholly consumed in such work." The number of men employed averaged 80. They were "boarded" by the contractor under an arrangement by which the contractor was to board them and deduct therefor $22.50 per month from their wages. The contract and the bond executed by the National Surety Company bound the contractor to "make full payment to all persons supplying him with labor or materials in the prosecution of the work provided for in" the contract.

It was held that groceries and provisions furnished the contractor and so consumed by the laborers were materials used "in the prosecution" of the work within the meaning of the federal act and the bond given to secure the contract.

Without taking into consideration the extrastatutory words contained in the bond in suit in the present case, those things which are necessary in the prosecution of the work provided for in the contract are protected as "labor and materials," although such supplies are not physically incorporated into the work. Such materials are embraced...