Doll v. Crume

• Decision Date: 27 June 1894
• Parties: DOLL ET AL. v. CRUME.
• Court: Nebraska Supreme Court

41 Neb. 655

59 N.W. 806

DOLL ET AL.

v.CRUME.

Supreme Court of Nebraska.

June 27, 1894.

Syllabus by the Court.

1. The awarding of a contract by a municipal corporation for an improvement for it is a sufficient consideration to support the promise of a contractor, made to the corporation, to pay for all labor and material furnished him in executing said contract.

2. Neither an express statute of the state nor an ordinance of a municipal corporation is necessary to its authority to require of its contractor a bond to pay for all labor and material furnished him in the execution of his contract with such corporation.

3. Sample v. Hale, 51 N. W. 837, 34 Neb. 220, and Lyman v. City of Lincoln (Neb.) 57 N. W. 531, followed and reaffirmed.

4. Where one person makes a promise to another for the benefit of a third person, such third person can maintain an action upon the promise, although the consideration does not move directly from him. Shamp v. Meyer, 29 N. W. 379, 20 Neb. 223, and Barnett v. Pratt, 55 N. W. 1050, 37 Neb. 349, followed and reaffirmed.

5. The city of South Omaha let a contract for grading its streets to one Davis. McGavock and Doll signed the contract as sureties for Davis. The contract provided that Davis should be paid 45 per cent. of the estimated cost of the work when two-thirds of it was completed; that Davis would complete the work in 180 days; that he would pay for all labor and material furnished him in executing his contract; that “said parties of the third part [McGavock and Doll] hereby guaranty that the said party of the second part [Davis] will well and truly perform the covenant hereinbefore contained to pay all laborers employed on said work; and, if said laborers are not paid in full by said party of the second part, that said third party hereby agrees to pay for said labor, or any part thereof, which shall not be paid by said second party within ten days after the money for said labor becomes due and payable.” On completion of two-thirds of the work, the city paid Davis 90 per cent. of the estimated cost thereof. The city granted Davis an extension of time for the completion of his contract beyond the time fixed therein. One Crume sued McGavock and Doll for the value of labor he had performed for Davis under his contract with the city. Held: (1) That the contract between the city and Davis and his sureties, and the promises and liabilities of the latter thereon, were of a dual nature,--a promise to the city that Davis should perform the work, in the time and manner he had agreed, and a promise, in effect, to Crume to pay him for the labor he should perform for Davis. (2) That the city's overpaying Davis, and extending the time of performance of his contract, did not release the sureties from their contract to pay Davis' laborers. (3) That, if the city had precluded itself from calling on the sureties to make good to it any default of Davis, its acts did not estop the laborers of Davis from enforcing against the sureties their contracts and promises.

Error to district court, Douglas county; George W. Doane, Judge.

Action by Charles Crume against Leopold Doll and Alexander McGavock, as sureties on the bond of one Oliver Davis for the performance of a contract with the city of South Omaha. Judgment for plaintiff, and defendants bring error. Affirmed.Guy R. C. Read and Francis A. Brogan, for plaintiffs in error.

George A. Magney, for defendant in error.

RAGAN, C.

On the 28th day of January, 1890, one Oliver Davis entered into a contract with the city of South Omaha to grade certain of its streets. By the terms of this contract, Davis was to have the work completed in 180 days from the date of the contract. He promised not to assign the contract nor sublet the work. The city, on its part, agreed to pay him for the work certain of its warrants drawn on certain funds. Davis was first to grade L street, and, when that was completed, was to have 45 per cent of the estimated cost of grading that street; and, when two-thirds of all the work was completed, he was to have another estimate of 45 per cent of the cost of the work completed. This contract between Davis and the city was also signed by Leopold Doll and Alexander McGavock, and they signed as sureties for Davis. The work was not completed in 180 days. The city, instead of making payments to him of 45 per cent. of the cost of the work done, paid him 90 per cent. of the estimated cost of such work. On the 31st day of May, 1890, Davis assigned all his interest in the contract to a bank; and on September 8, 1890, the city granted to Davis a further time in which to complete the work under the contract. The contract contained two provisions as follows: “The second party [Davis] further agrees that he will pay all laborers and material men on the work embraced in this contract.” “Said parties of the third part [Doll and McGavock] hereby guaranty that the said party of the second part [Davis] will well and truly perform the covenant hereinbefore contained to pay all laborers employed on said work; and, if said laborers are not paid in full by said party of the second part, that said party of the third part hereby agrees to pay for said labor, or any part thereof, which shall not be paid by said second party within ten days after the money for such labor becomes due and payable; and this provision shall entitle any and all laborers performing labor on the improvements to be done under this contract to sue and recover from said third parties, or either of them, the amount due and unpaid to them, or either of them, by said second party; but said third party shall not be liable on this guaranty on account of said labor beyond $15,000,--the estimated cost of the labor on said work.” One Charles Crume sued Leopold Doll and Alexander McGavock on this contract, in the district court of Douglas county, for labor which he had performed for Davis under his contract with the city of South Omaha. Crume had a verdict and judgment, and Doll and McGavock bring the case here for review.

1. The first argument relied on here for a reversal of this judgment is that the city of South Omaha had no authority or capacity to exact from the contractor or his sureties a condition that they pay the claims of laborers. This question was before this court in Sample v. Hale, 34 Neb. 220, 51 N. W. 837, and decided adversely to the contention of the plaintiffs in error. In that case the board of public lands and buildings of the state of Nebraska had awarded a contract for the erection of a public building to one ...