General Elec. Co. v. Webco Const. Co.
| Decision Date | 20 November 1967 |
| Docket Number | No. 21806,21806 |
| Citation | 164 Colo. 232,433 P.2d 760 |
| Parties | GENERAL ELECTRIC COMPANY, Plaintiff in Error, v. WEBCO CONSTRUCTION CO. and National Union Fire Insurance Company, Defendants in Error. |
| Court | Colorado Supreme Court |
Martin I. Steinberg, Denver, for plaintiff in error.
Thomas E. McCarthy, Denver, for defendants in error.
The parties are here in the same order that they appeared in the trial court and will be referred to as follows: Plaintiff in error as plaintiff or as G. E.; the defendants in error as defendants or Webco and National Union, respectively.
In November, 1962, Webco, as general contractor, was awarded a contract by School District No. 1 in Arapahoe County, Colorado, for the construction of some new classrooms and to make other alterations to the Flood Junior High School building in Englewood, Colorado. Pursuant to C.R.S.1963, 86--7--6, Webco, through National Union as surety, delivered to the school district a Performance bond and Labor and material payment bond. One undertaking was for the faithful performance of the contract and the other bound the principal and surety to make prompt payment to suppliers for all labor and material used or required to be used in the performance of the general contract. The latter bond protection extended to suppliers of either the principal contractor or the subcontractors.
The bond provided that no action by a claimant thereunder could be instituted after the expiration of one year following the date on which the work called for in the contract was completed, but it had another provision that 'any law controlling' should be deemed to amend the one year provision if such law required a shorter period of time within which the action must be brought.
Currier Electric Co., Inc. was engaged by Webco to perform the electrical work required by the principal contract. In the performance of its subcontract, the Currier company purchased material and electrical equipment from G. E.
Plaintiff instituted suit against Currier as the primary debtor and joined Webco and National Union under the provisions of the labor and material payment bond. The action was commenced on June 18, 1964 after there had been negotiations between the attorneys of the respective parties for many months. Because the Currier firm was involved in bankruptcy proceedings in the federal district court, all proceedings in the action with respect to that defendant were stayed by the bankruptcy court. In both the trial court and here the action has continued only against Webco and National Union under the bond.
The trial court entered judgment for the defendants. Although finding that a balance of $14,110.10 was owing the plaintiff for materials sold and delivered to Currier, the trial court nevertheless ruled that there could be no judgment against Webco and National Union because under the provisions of C.R.S.1963, 86--7--4, plaintiff was required to commence its action on the material and labor bond within six months after the completion of the work under the principal contract; that more than six months had elapsed between the time the principal contract work was completed and the date of the commencement of the action; and that therefore the action against the principal and surety was barred.
As grounds for reversal of the judgment, plaintiff advances three arguments:
I. An action on a public works contractor's bond for more than $1000 is not subject to a six months statute of limitations;
II. The actual completion of the work was less than six months prior to the bringing of the suit; and
III. Defendants, by the conduct of their attorneys, were estopped to raise the defense of the six months statute of limitations.
We will discuss plaintiff's contentions in that order.
For a resolution of the problem as to whether there is a six months statute of limitations which barred this action, an analysis of several sections of the statutes involving public construction is called for. One is C.R.S.1963, 86--7--4. It was originally enacted as c. 135 of the Session Laws of 1915 and provides that before commencing any work the 'person' to whom a public works contract is awarded is required to furnish a bond conditioned that there shall be Prompt payment to all persons furnishing labor or materials, whether to the principal contractor or subcontractors. The section is concluded with the following language:
(Emphasis added.)
Subsequent sections of C.R.S.1963, 86--7--5 through 86--7--7, retained by the Revisor of Statutes and reenacted in the 1953 and 1963 Colorado Revised Statutes were originally enacted as Chapter 155 of the Session Laws of 1923. Section 86--7--5 defines what is meant by a 'contractor' of public works contract. Section 86--7--6 provides that on all contracts of more than $1000 the principal contractor shall deliver a Performance bond, i.e., binding the principal and surety to the public agency for the faithful performance of the public works project. There is an additional provision to protect laborers and materialmen, not only against the bond but when read with 86--7--7 provides for them another remedy whereby their unpaid claims may be filed for payment within the public agency. The latter is thereafter required for a period of No longer than ninety days following a date fixed and published for final settlement with the principal contractor to withhold payment on the contract in an amount sufficient to cover any such claims. There is no repetition of the requirement to commence action within six months.
Therefore, the question presented is: Did the legislature by its 1923 enactment repeal by implication 86--7--4 as to all contracts over $1000; and does there remain only the bond required by 86--7--6 on all contracts over $1000? We answer this question in the negative because of the following legislative history:
The 1923 act dealing with public contracts contained four sections which were not republished contained four secti...
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