Fay v. Bankers Surety Co.
| Decision Date | 20 March 1914 |
| Docket Number | 18,490,18489,18,488 - (242,243,244) |
| Citation | 146 N.W. 359,125 Minn. 211 |
| Parties | T.J. FAY v. BANKERS SURETY COMPANY; ROBERT McGINN v. SAME; S.O. PRESTEGAARD v. SAME |
| Court | Minnesota Supreme Court |
Three actions in the district court for Pennington county to recover $300, $310.06 and $245.69, respectively, from defendant as surety upon the bond of Jerry Sherwood in favor of the county of Red Lake for the performance of his ditch contract with that county. The answers were general denials. The cases were tried before Grindeland, J., who made findings and ordered judgment in favor of plaintiff for $300, $128.19 $117.25, and interest, respectively. From orders denying its motions for amended findings or a new trial, defendant appealed. Modified.
Contractor's bond.
1. A county ditch contractor's bonds held to be valid statutory obligations to the extent of the fair import of the language used in their conditions, but no further.
Evidence.
2. Evidence in actions on such bonds held sufficient to connect the items sued for with the ditches covered by the bonds.
Meaning of "materials."
3. Axes, hack-saw blades, horse feed, and provisions, held not "materials" furnished in the execution of the contract, within the meaning of the bonds.
Fuel.
4. Items for coal and wood consumed in generating power used in the ditching work, and for labor as cook for the workmen held within the terms of the bonds.
Assignment of wages.
5. The issue of noncompliance with G.S. 1913, § 3858, requiring notice of assignments of wages to be given to the employer, held sufficiently raised by defendant's general denial of assignments sued on.
Act valid.
6. This statute sustained, as against a claim that it is unconstitutional as infringing upon freedom to contract and on the ground of class legislation.
Double costs.
7. Double costs under G.S. 1913, § 7975, held improperly allowed where no claim therefor was made in the complaint, and no proof of the right thereto on the trial.
McElwee & Payte, for appellant.
G. Halvorson, for respondent.
Kerr, Fowler, Ware & Furber, filed a brief as amici curioe.
Stringer & Seymour also filed a brief as amici curioe.
On April 4, 1910, one Jerry Sherwood entered into a contract with Red Lake county, wherein he agreed to construct County Ditch No. 38 therein, and to pay, as they became due, all just claims for all work and labor performed and all skill and material furnished in its execution, and to save the county harmless from any cost, charge, or expense which might accrue on account of the doing of the work. On May 14, 1910, the same parties entered into a like contract for the construction of Ditch No. 43 in the same county. Sherwood, as principal, and defendant, as surety, executed bonds to the county in connection with both contracts, in adequate amounts, conditioned, among other things, that he would faithfully pay, "as they [became] due, all just claims for all work and labor performed and all skill and material furnished in the execution of [the] contract." Sherwood thereafter entered upon performance of the work. Plaintiffs, directly in their own behalf and claiming also as assignees of others, brought these three separate actions, seeking to recover the value of labor, materials, etc., alleged to have been performed and furnished in construction of the ditches. Defendants denied liability, the causes were separately tried to the court, findings made, and judgments ordered for plaintiffs. In the McGinn case the court awarded a recovery for two axes, $2.40, two dozen saw-hack blades, $1.80, and coal, $6.18; also $56.06 for horse feed, provisions, and labor furnished and performed by one Rime, alleged to have been assigned to plaintiff. In the Prestegaard case the court gave plaintiff judgment for $20, for wood furnished by one Iverson, the claim for which being alleged to have been assigned to plaintiff. In the Fay case $224 was allowed for labor performed by plaintiff. Defendant appealed from orders denying its motions for amended findings and new trials.
1. The first question requiring consideration relates to the allowance for tools and coal in the McGinn case. G.S. 1913, § 5536, provides that bonds in cases like the present shall be taken for the use of all persons who may show themselves aggrieved or injured by any breach thereof or of the contract for which the bond is given, while section 5537 states that every ditch contract and bond shall embrace "all the provisions provided by law for the giving of bond by contractors for public works and improvements and for the better security of the contracting county or counties and of the parties performing labor and furnishing material in and about the performance of such contracts." Bonds by contractors for public works and improvements are required by section 8245, the material portions of which being:
"No contract with the state, or with any municipal corporation or other public board or body thereof, for the doing of any public work, shall be valid for any purpose, unless the contractor shall give bond to the state or other body contracted with, for the use of the obligee and of all persons doing work or furnishing skill, tools, machinery, or materials under, or for the purpose of, such contract, conditioned for the payment, as they become due, of all just claims for such work, tools, machinery, skill and materials, for the completion of the contract in accordance with its terms, for saving the obligee harmless from all costs and charges that may accrue on account of the doing of the work specified, and for compliance with the laws appertaining thereto."
In Wilcox Lumber Co. v. School District No. 268 of Otter Tail County, 103 Minn. 43, 45, 114 N.W. 262, 263, it was declared:
The same principle is restated in State v. Clark, 116 Minn. 500, 502, 134 N.W. 130, 39 L.R.A. (N.S.) 43. And while the rule of strict construction in favor of the surety does not apply to a surety company (Allen v. Eneroth, 118 Minn. 476, 479, 137 N.W. 16), the surety is bound in the manner and to the extent of his obligation and no further; but the bond, being given by virtue of statute, cannot be severed therefrom, and the parties are deemed to have contracted with reference thereto. Such an instrument "must be construed in the light of the statute, and extended, as well as limited in its scope, to those cases contemplated by the statute, unless violence would be done to the language of the bond by such construction." Fairmont Cement Stone Mnfg. Co. v. Davison, 122 Minn. 504, 509, 142 N.W. 899; Combs v. Jackson, 69 Minn. 336, 337, 72 N.W. 565. See also Union Sewer Pipe Co. v. Olson, 82 Minn. 187, 84 N.W. 756; Waterous Engine Works Co. v. Village of Clinton, 110 Minn. 267, 125 N.W. 269; Scott-Graff Lumber Co. v. Independent School District No. 1, 112 Minn. 474, 128 N.W. 672.
Although the bonds are not conditioned in terms in accordance with our present statute, but follow chapter 321, p. 535, Laws 1901, with these principles as guides, we are led to the conclusion that the bonds are valid as statutory obligations to the extent of the fair import of the language used in the conditions. Their effect cannot, however, be extended further. See Union Sewer Pipe Co. v. Olson, 82 Minn. 189, 84 N.W. 956.
While the proofs connecting the items mentioned with either of the ditches is unsatisfactory, we deem it sufficient when the general manner in which these cases were presented to the court below is considered. But, aside from the coal, clearly none of them can be held "materials" within the meaning of the bond. Beals v. Fidelity & Deposit Co. 76 A.D. 526, 527, 78 N.Y.S. 584, and cases cited, affirmed in 178 N.Y. 581, 70 N.E. 1095; Empire State Surety Co. v. Des Moines, 152 Iowa 531, 548, 131 N.W. 870, 132 N.W. 837. Whether the coal, consumed in the performance of the contract, should be considered "material furnished in its execution," is a question upon which the authorities are at variance. See Zipp v. Fidelity & Deposit Co. 73 A.D. 20, 76 N.Y.S 386; City Trust, Safe Deposit & Surety Co. v. U.S. 147 F. 155, 77 C.C.A. 397; National Surety Co. v. Bratnober Lumber Co. 67 Wash. 601, 122 P. 337; City of Alpena v. Title Guaranty & Surety Co. 168 Mich. 350, 134 N.W. 23; City of Philadelphia v. Malone, 214 Pa. St. 90, 63 A. 539; George H. Sampson Co. v. Com. 202 Mass. 326, 88 N.E. 911. With us...
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