Collins for Use and Benefit of Dixie Plywood Co. of Tampa v. National Fire Ins. Co. of Hartford

Decision Date10 September 1958
Docket NumberNo. 352,352
Citation105 So.2d 190
PartiesLeRoy COLLINS, Governor of the State of Florida, for the use and benefit of Dixie Plywood Company of Tampa, Inc., a Florida corporation, Appellant, v. NATIONAL FIRE INSURANCE COMPANY OF HARTFORD, a corporation, et al., Appellees.
CourtFlorida District Court of Appeals

Tom Fairfield Brown and Fred T. Saussy, Jr., Tampa, for appellant.

Haskins & Bryant, Sebring, for appellees.

KANNER, Chief Judge.

The trial court granted a motion to dismiss the amended complaint, and thereupon dismissed the action. The appeal is from that ruling.

The Board of Public Instruction of Highlands County on October 26, 1954, entered into a contract for $340,840 with L. W. Ross as general contractor to construct what was designated Woodlawn Elementary School. The action is by a materialman against the sureties of the members of the Board of Public Instruction of Highlands County and the chairman of the board. The theory of the action was that the members of the board failed to perform their ministerial duty of requiring the contractor to furnish a bond conditioned in the manner prescribed by section 255.05, Florida Statutes, F.S.A., so as to protect persons supplying material and labor.

Section 237.31(4) of the school code, Florida Statutes, F.S.A., makes it the duty of the county board of public instruction to require from a school contractor a bond for the faithful performance of his contract as prescribed by law, and section 235.32 of the school code specifies that the amount of the bond by the school contractor shall be one hundred per cent of the contract price. Section 255.05 is the general statute relating to bond requirements of a contractor constructing public buildings.

Section 255.05 about which we are here concerned reads:

'Any person entering into a formal contract with the State of Florida, any county of said state, or any city in said state, or any political subdivision thereof, or other public authority, for the construction of any public building, or the prosecution and completion of any public work or for repairs upon any public building, or public work, shall be required, before commencing such work, to execute the usual penal bond, with good and sufficient sureties, with the additional obligations that such contractor shall promptly make payments to all persons supplying him labor, material and supplies, used directly or indirectly by the said contractor, or subcontractors, in the prosecution of the work provided for in said contract; and any person, making application therefor, and furnishing affidavit to the treasurer of the State of Florida, or any city, county, political subdivision, or other public authority, having charge of said work, that labor, material or supplies for the prosecution of such work has been supplied by him, and payment for which has not been made, shall be furnished with certified copy of said contract and bond, upon which, said person, supplying such labor, material or supplies shall have a right of action, and may bring suit in the name of the State of Florida, or the city, county, or political subdivision, prosecuting said work, for his use and benefit, against said contractor, and sureties, and to prosecute the same to final judgment and execution; provided, that such action, and its prosecution, shall not involve the State of Florida, any county, city or other political subdivisions, in any expense.' 1

The contract provided that the contractor should furnish all of the materials and labor necessary to perform all of the work; and under article 7 it is provided:

'This contract shall become effective and in full force upon execution of this agreement, concurrently with the delivery of a bond issued by a surety company, licensed to do business in the State of Florida, for one hundred per cent (100%) of the contract price, said bond guaranteeing the performance of this contract and as security for the payment of all persons performing labor and furnishing materials in connection with this contract.'

The bond furnished was executed October 28, 1954, by L. W. Ross, general contractor, and Pan American Surety Company, as the principals, to the Board of Public Instruction, Highlands County, Florida, as the obligee in the sum of the contract price. These provisions are contained in the bond:

'Whereas, The Principal has entered into a written contract dated October 26th, 1954, with the Obligee, for the construction of the Woodlawn Elementary School, Sebring, Florida, a copy of which is hereto annexed:

'Now, Therefore, The condition of this obligation is such, that if the Principal shall 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;'

and also the further provision:

'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 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 trial court hinged his determination of the case on two propositions, 1. that the amended complaint did not show that the use plaintiff was unable to collect the debt due, and 2. that the bond, read in its entirety with the contract, did protect laborers and materialmen.

The appellant's position is that the bond was deficient in that it did not contain the statutory obligation, 'shall promptly make payments to all persons supplying him labor, material and supplies, used directly or indirectly by the said contractor, or subcontractors, in the prosecution of the work provided for in said contract.'

The appellees stand on the theory of the trial judge's ruling and present the further proposition that the bond given shows on its face a bona fide attempt on the part of the board of public instruction to comply with the statute, and that if the bond did not protect the materialman because of a technicality, that was not ministerial but concerned the exercise of judgment.

The purpose of the provision contained in section 255.05, that a contractor shall promptly make payments for labor, material, and supplies, is to protect laborers and materialmen whose labor and material are put into public buildings or projects on which they can acquire no lien. A contractor's bond should be construed in the light of this section and must be supposed to accomplish its purpose. See Warren for Use and Benefit of Hughes Supply Co. v. Glens Falls Indemnity Co., Fla.1953, 66 So.2d 54; and City fo Stuart, Fla.1953, 66 So.2d 54; and City of Stuart, R. Co. v. American Surety Co. of New York, 5 Cir., 38 F.2d 193.

As we view it, the heart of this appeal is whether the bond has adequately met the statutory condition involved, and we shall not deal with the other theories advanced. The primary case urged by the appellant is the case of Warren for Use and Benefit of Hughes Supply Co. v. Glens Falls Indemnity Co. In that case, Suwannee County Board of Public Instruction failed to demand and receive from the contractor the bond required by section 255.05. The Supreme Court held that the school board had a mandatory and ministerial duty to see to it that the bond required by section 255.05 was executed, posted, and approved before the work was commenced, and that the failure to perform such duty results in individual tort liability of members of the board.

We have obtained and examined the record in the Glens Falls case. The contract includes no language creating the obligation called for by the statute for protection of a laborer and a materialman. The Glens Falls bond is practically identical in wording with the bond in the instant case, except after the word 'annexed' it has the additional words, 'and which contract is made a part hereof, as fully as if recited at length herein.'

So we see in the Glens Falls case, neither the bond nor the contract has the language included in it to fulfill the statutory obligatory provision. Contrariwise, the language of the contract in the instant case, 'This contract shall become effective and in full force upon execution of this agreement, concurrently with the delivery of a bond issued by a surety company, licensed to do business in the State of Florida, for one hundred per cent (100%) of the contract price, said bond guaranteeing the performance of this contract and as security for the payment of all persons performing labor and furnishing materials in connection with this contract,' substantially raises the question of the legal sufficiency of the bond. Although this quoted language is not directly written into the bond itself, the bond instrument specifically refers to the 'contract of October 26, 1954, for the construction of the Woodlawn Elementary School, Sebring, Florida, copy of which is hereto annexed.' The contract was so annexed and there is no dispute about that.

In the case of the City of Ocala for Use of Standard Oil Co. v. Continental Casualty Co., 1930, 99 Fla. 736, 127 So. 326, 77 A.L.R. 8, the action was against the contractor's surety and the contractor to recover for material and services rendered to the contractor in connection with street improvements, which action involved the question of the sufficiency of the bond. In that case, it is stated, quoting from 127 So. at page 328:

'There was no duty or obligation of the surety company to enter into the bond that the statute requires the contractor to execute 'before commencing' the 'public work.' If a surety company executes a penal bond purporting in terms or in substance or by sufficient reference to be in accordance with or for the purpose of complying with the...

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