Crum v. Jenkins

• Decision Date: 31 March 1928
• Docket Number: 12419.
• Citation: 143 S.E. 21,145 S.C. 177
• Parties: CRUM et ux. v. JENKINS et al.
• Court: South Carolina Supreme Court

143 S.E. 21

145 S.C. 177

CRUM et ux. v. JENKINS et al.

No. 12419.

Supreme Court of South Carolina

March 31, 1928

Appeal from Common Pleas Circuit Court of Orangeburg County M. M Mann, Judge.

Action by G. M. Crum and wife against Henry N. Jenkins, the Maryland Casualty Company, and others. From the judgment, defendant last named appeals. Reversed and remanded.

Lide & Felder, of Orangeburg, for appellant.

A. J Hydrick, J. S. Bowman, Wolfe & Berry, Salley & Salley, C. H Whetstone, and Ed C. Mann, all of Orangeburg, and Melton & Belser, of Columbia, for respondents.

COTHRAN J.

This is an action brought by the plaintiffs, husband and wife, against H. N. Jenkins, a contractor, Maryland Casualty Company, surety upon Jenkins' bond to the plaintiff G. M. Crum, and a number of creditors who had furnished material to Jenkins, the contractor, for the purpose of having determined the question of the liability of the plaintiffs to the several defendant creditors, and, in the event that their liability be established, for the judgment against the contractor and the Maryland Casualty Company, the surety, for said several claims, and for the liquidated damages fixed by the contract, for the contractor's failure to complete the building within the time stipulated in his contract.

This action is a complicated one; the purpose of it, as outlined, will be better understood by what follows:

The plaintiff Mrs. Crum owned a certain lot in the city of Orangeburg; her husband, the plaintiff G. M. Crum, proposed to build a residence for her upon it. On April 27, 1923, he entered into a written contract with the defendant Jenkins to erect the dwelling, for the contract price of $16,500, according to specifications, general conditions, and drawings prepared by architects. The contract contained this provision:

"The contractor agrees to give the owner a bond in the sum of $5,000, which shall guarantee that contractor will faithfully execute the contract, and will protect the owner against any claim for labor and materials incurred by the contractor in constructing the house."

Accordingly, on May 2, 1923, Jenkins, the contractor, with the Maryland Casualty Company as surety, executed a bond. Its condition was:

"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."

The bond also contained this provision:

"Provided, however, that this bond is executed upon the following express conditions, the performance of each which shall be a condition precedent to any right of recovery hereon, anything in the contract to the contrary notwithstanding."

Here follow a number of conditions, none of which are pertinent to the present inquiry except the fifth:

"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 suretyship only. ***"

The contractor proceeded with the building, and entered into contracts with various persons for the material used in construction. Under the terms of the contract, the building was to be completed by October 30, 1923, and the contract contained the following provision:

" The contractor agrees that the work under this contract shall be substantially completed on or before the 30th day of October, 1923. Should the contractor fail to complete and deliver the building on or before the aforesaid date, he agrees to forfeit to the owner as liquidated damages the sum of ten ($10.00) dollars for each and every day thereafter that the work remains unfinished. Such moneys shall be deducted from any balance due the contractor."

On or about November 10, 1923, the contractor abandoned the job, the work having been substantially but not fully completed. The bond company was notified, and, by agreement of all concerned, the plaintiff G. Milton Crum undertook to complete the house at the expense of the bond company, the work being continued by the contractor, the defendant Henry N. Jenkins, under the supervision of the architects. The cost of completing the house, after it was abandoned by the contractor, was $588.25. Up to the time the contractor threw up the job he had been paid the sum of $13,753. As stated, it took $588.25 to complete the house after the contract was thrown up on November 10, 1923; so that in all the plaintiffs have paid the sum of $14,341.25 against the contract price of $16,500, leaving a balance due by them of $2,158.75, which they hold in their hands subject to the contract, and the decision of the court in this case.

In the meantime the contractor had become indebted to materialmen upon the following accounts:

J. P. Coleman, trading as Coleman Lumber Company ...................	$1,228 27
J. D. Jones, trading as Ayers & Williams ..............................	282 60
D. A. Sprinkle .........................................................	60 00
Consolidated Granite Company ...........................................	49 76
Columbia Lumber & Manufacturing Company, corporation ..................	818 31
J. W. Smoak ............................................................	19 75
W. C. Wolfe .............................................................	7 00
Willie Buchanan .........................................................	9 50
W. H. Dukes and W. J. Dawkins, trading as Orangeburg Marble Works ......	32 30
John McNamara .......................................................	1,648 62
	---------
All of which aggregate ..........................................	$4,156 11

-none of which have been paid. Some of these creditors have taken steps to file mechanics' liens upon the house and lot, and all are claiming the protection of the bond which the Maryland Casualty Company has executed.

The plaintiffs in their complaint deny their liability to these creditors, and deny that any of them have complied with section 5639 et seq. of volume 3, Code 1922, relating to mechanics' liens, except the defendant McNamara, who furnished material to the amount of $1,648.62, by and with the consent of G. M. Crum, and has filed the proper notice of lien therefor.

This statement occurs in the "case":

"The defendants J. P. Coleman, Columbia Lumber Manufacturing Company, and John McNamara, claim now to have liens upon the dwelling and property of the plaintiffs, the validity of which are issues in this cause. Notices were served on the owners by J. P. Coleman and Columbia Lumber Manufacturing Company after the material had been furnished, but not previously, and the consent of the owners had not been obtained. John McNamara furnished material and labor after notice to the owners and with their consent."

The plaintiffs being in doubt as to their liability to the creditors, materialmen, and as to the validity of the liens filed against the property, which they claim to be clouds upon the title of the property, have brought this action to clear up the entire situation by an adjudication:

(1) Whether there is any personal liability upon them for the claims of the creditors, materialmen.

(2) Whether the mechanics' liens filed by the defendants Coleman, Columbia Lumber Manufacturing Company, and McNamara are valid liens upon the property.

(3) Whether the Maryland Casualty Company is liable under its bond to pay the claims of the materialmen in the event that it should be determined that there is any liability upon the plaintiffs for the claims of the creditors, materialmen, or that the liens filed by them are valid as against the property.

(4) The amount that the Maryland Casualty Company owes them on account of the failure of the contractor to complete the building within the specified time.

The Columbia Lumber & Manufacturing Company answered, asserting the validity of its mechanic's lien. It also set up a counterclaim (?), in which they claim protection under the bond of the Maryland Casualty Company, and ask judgment against it. (Whether this pleading was served upon the Maryland Casualty Company does not appear.)

It does not appear that any of the other defendants filed answers except the Maryland Casualty Company. That company answered, contesting its liability upon the bond to materialmen.

By agreement of counsel the case was tried by his honor, Judge Mann, upon testimony taken in open court before him, at June term, 1925. On August 6, 1925, he filed a decree holding that the Maryland Casualty Company, as surety upon the contractor's bond, was liable to the defendants, materialmen, who had furnished material used in the construction of the house, and to the plaintiffs for $420 under article 2 of the contract providing for a forfeiture of $10 per day as liquidated damages for failing to complete the construction within the time limited. His honor, the circuit judge, did not pass upon the questions whether the plaintiffs were under any obligation to pay the materialmen or whether the materialmen had secured liens upon the property. As a matter of fact, it was not necessary, under his view of the law that the bond company was liable to the materialmen, to pass upon them.

It is admitted that in the list of creditors set out in the decree, the defendant Coleman Lumber Company and its claim of $818.31 were inadvertently omitted by his honor the circuit judge. (The claim of J. W. Smoak $19.75, set out in the complaint, is also omitted, perhaps for a sound reason).

The...