Franzen v. Southern Surety Co.

• Decision Date: 18 May 1926
• Docket Number: 1269
• Citation: 35 Wyo. 15,246 P. 30
• Parties: FRANZEN v. SOUTHERN SURETY CO. [*]
• Court: Wyoming Supreme Court

246 P. 30

35 Wyo. 15

FRANZEN v. SOUTHERN SURETY CO. ^[*]

No. 1269

Supreme Court of Wyoming

May 18, 1926

ERROR to District Court, Albany County; VOLNEY J. TIDBALL, Judge.

Action by Asmus Franzen against the Southern Surety Company upon a highway contractor's bond. There was a judgment for defendant, and plaintiff brings error.

Reversed and remanded.

G. R McConnell, and Ray E. Lee, for plaintiff in error.

The contractor's bond was furnished under the requirements of the laws of the state to assure the performance of and is governed by the same laws as other contracts; Cleveland R. R. Co. v. Ellis, 85 O. S. 251; 97 N.E. 967; 39 L. R A. N. S. 1219; State v. Mortensen, 69 Nebr. 376; 5 Ann. Cas. 291; Chapter 151, laws 1921, requires ninety days public notice to be given before final estimates are paid on public contracts; Chapter 31 C. S. prescribes conditions for the protection of persons performing labor or furnishing materials in the execution of such contracts; provisions and supplies come within the terms of materials furnished; Brogan v. Surety Co., 246 U.S. 257; 62 L. ed. 703; hay and grain for animals used on the contract, come within the rule; National Co. v. Lumber Co., (Wash.) 122 P 337; Freight and drayage in delivering materials are included; American Co. v. Cement Co., 110 F. 717; U.S. v. Morgan, 111 F. 474; U.S. v. Hagenman, 204 P. 438; Trust Co. v. Crane Co., 219 U.S. 24; Nye Co. v. Bridges, 151 N.W. 942; Trust Co. v. Engine Works, 163 F. 168; Surety Co. v. John Davis Co., 244, U.S. 376; bond is valid even though broader than contract; Clatsop County v. Feldschau, 199 P. 953; 18 A. L. R. 1221; U.S. F. & G. Co. v. Parker, 20 Wyo. 29. The contract and bond constitute the obligation of the surety.

Lee Cotton, for defendant in error.

Bonds filed under these statutes are a substitute for laborers' and materialmen's liens, and since laborers and materialmen cannot file liens upon public property, bonds of this class are made to furnish a remedy; Smith v. Bowman (Utah) 88 P. 687; U.S. v. Burgdorf, 13 Ap. D. C. 506; Press Co. v. Surety Co., 149 F. 507; Young v. Young, 52 N.E. 776; Surety Co. v. Lauber, 55 N.E. 793; King v. Downey, 56 N.E. 680; U.S. v. Surety Co., 200 U.S. 197; the bond should cover only lienable items; Beals v. Fidelity Co., 76 A.D. 256; 178 N.Y. 581; 70 N.E. 1095; Surety Co. v. Excavator Co. 160 P. 716; U.S. v. Ins. Co., 198 F. 923; Jones v. Hotel Co., 30 C. C. A. 108; 193 U.S. 532. There is no valid claim on the bond for contractors' equipment; Beals v. Co., 178 N.Y. 681; 70 N.E. 1095; Co. v. Yowmans, 112 S.W. 225; U.S. v. Morgan, 111 F. 474; or for repairs; Public Works v. Yonkers, 124 N.Y.S. 307; Boiler Works v. Surety Co., 127 P. 573; or for fuel, lubricants or explosives; Zipp v. Fidelity Co., 76 N.Y.S. 386; City Trust v. U.S., 147 F. 155; Philadelphia v. Malone, 63 A. 539; food and supplies for men are excluded; Cadenasso v. Antonelle, 127 Cal. 382, 59 P. 765; Parkinson v. Alexander, 14 P. 466; St. Louis v. Ritz, 1 P. 27; U.S. v. Kinepland, 93 F. 403; U.S. v. Fidelity Co. 169 Ill.App. 1; Van Havns Co. v. Day, 148 S.W. 1129; Armour & Co. v. Western Co. 78 P. 1106; Perrault v. Shaw, 38 A. 724; Electric Co. v. Springfield Co., 86 N.E. 248. Money loaned is not a claim; Cadenasso v. Antonelle, supra; Hardaway v. Surety Co. 150 F. 465; drayage expense is not included; Alpena v. Murray Co., 159 Mich. 336; 123 N.W. 1128. In Gibbs v. Tally, 65 P. 970, a similar statute in California was held unconstitutional. In Bolln Co. v. Irrigation Co., 19 Wyo. 542, this court held this statute unconstitutional except as to material which actually entered into and formed a part of the permanent structure; the word "material" is used in the statute instead of the word "supplies". The finding of the lower court seems to be in harmony with this decision.

BLUME, Justice. POTTER, C. J., and KIMBALL, J., concur.

OPINION

BLUME, Justice.

This action was brought in Albany county by Asmus Franzen, plaintiff, hereinafter designated in the same manner, against the Southern Surety Company and others, for certain material furnished by plaintiff to Fitzgerald Brothers, a partnership. It appears that on the 1st day of June, 1922, the said partnership entered into a contract with the Highway Commission of the state for the purpose of building a portion of the Lincoln Highway in the county of Albany, for the consideration mentioned in said contract. Said contractor furnished a bond to the state of Wyoming in the principal amount of $ 4700, with the Southern Surety Company as surety. The bond, after reciting the foregoing contract and the proposal and specifications attached thereto, and making the same a portion of the bond, concludes:

"Now therefore, if the said principal shall well and truly perform said work in accordance with the terms of said contract, advertisement, proposal, plans and specifications, and pay for all labor and material in connection with said work, then this obligation shall be void; otherwise it shall remain in full force and effect."

The plaintiff herein furnished to said partnership supplies or materials of the value of $ 405.67, the following items of which are in dispute: First, feed, consisting of hay and grain, fed to, and consumed by, the horses that were used by said partnership in doing said work. Second, overshoes, furnished to said contractors or to some of the men on said work. Third, coal, used for the generation of power of a machine used in the construction of said road. Fourth, coal oil, evidently used for the purpose of furnishing light in the camp maintained by said partnership in connection with the construction of said road. Fifth, haulage of the foregoing items. The court disallowed all of these items and entered judgment accordingly, from which plaintiff has appealed. It appears that said partnership failed to fully perform its contract, and said surety company completed it and paid out the sum of $ 1428.61 in excess of the amount which it received under said contract from the state. This fact, however, seems to have no bearing on the case, inasmuch as the excess payment, together with the amount herein asked by the plaintiff, does not equal the amount of the bond, and hence we shall not give this matter any further consideration.

1. The bond herein was evidently executed pursuant to the provision of section 329, W. C. S. 1920, first passed as chapter 137 of the Session Laws of 1919. That section provides, among other things, that whenever a contract is entered into with the state, county, city, town, school district or other public corporation for the construction of any public work or improvement exceeding the contract price of $ 500, the contractors shall be required to execute a bond to the state or other public subdivision thereof "for the use of the same, and also for the use and benefit of all persons who may perform any work or labor or furnish any material in the execution of such contract, conditioned for the performance and completion of such contract according to the terms thereof and to comply with all the requirements of law; and to pay, as they become due, all just claims for all work or labor performed and material furnished in the execution of such contract." (Italics are ours.) The condition of the bond executed in the case at bar is not strictly in accordance with the provisions of the statute. The meaning of the language employed in the bond, however, is probably as broad as, if not broader than, the meaning of the language employed in the statute. In any event, the bond appears to have been given pursuant to the requirement of the statute. It must, accordingly, be construed in connection therewith. Fay v. Bankers Surety Co., 125 Minn. 211, 146 N.W. 359, Ann. Cas. 1915C 688; Aetna Casualty & Surety Co. v. Henslee, (Ark.) 163 Ark. 492, 260 S.W. 414, 416; Multnomah County v. U.S. Fid. & G. Co., 92 Ore. 146, 180 P. 104. And with that construction in mind, we think we may assume that the contractor and the surety company herein are liable to the extent that they are made so under and by virtue of the provisions of section 329 aforesaid.

2. Counsel for the surety company, however, argue that the statute aforesaid could not make the bonding company liable for any material except such as actually, and bodily, entered into the permanent structure and became a component part thereof, and that if it attempts to do so, it is to that extent void and unconstitutional. In support of that contention, we are only cited to the case of George Bolln Co. v. Irrigation Co., 19 Wyo. 542, 121 P. 22. In that case this court construed chapter 78 of the laws of 1909 requiring a ditch owner to take from the person, with whom he makes a contract for the construction of a ditch, a good and sufficient bond in some surety company, conditioned that such contractor should pay all laborers, mechanics, ranchmen, farmers, material men and other persons who supply him or any of his subcontractors with labor or material of any kind; and providing, further, that if the owner fails to take such bond, he is liable to the full extent of all debts contracted by such contractor or a subcontractor in the construction of the ditch. We held that in so far as the statute requires a surety company bond and creates a personal liability for other things than labor and materials which actually go into the work and thereby enhance the value of the property, it is unconstitutional and void and interferes with the liberty to contract, is a taking of property without due process and a denial of the equal protection of the laws. We fail to see the application of that case. The statute referred to therein deals with contracts between private individuals. Section 329, supra, deals with bonds in connection...