H. Earl Clack Co. v. Staunton

• Court: Montana Supreme Court
• Writing for the Court: ANGSTMAN, Justice.
• Citation: H. Earl Clack Co. v. Staunton, 105 Mont. 375, 72 P.2d 1022 (Mont. 1937)
• Decision Date: 02 November 1937
• Docket Number: 7664.
• Parties: H. EARL CLACK CO. v. STAUNTON et al.

72 P.2d 1022

105 Mont. 375

H. EARL CLACK CO. v. STAUNTON et al.

No. 7664.

Supreme Court of Montana

November 2, 1937

Appeal from District Court, Twelfth District, Hill County; John Hurly, Judge.

Action by the H. Earl Clack Company against Thomas Staunton and another. Judgment for defendants, and plaintiff appeals.

Reversed and remanded for a new trial.

See also, 100 Mont. 26, 44 P.2d 1069.

Max P Kuhr, of Havre, for appellant.

W. J Tighe and John L. Slattery, both of Great Falls, A. F. Lamey of Havre, W. D. Rankin, of Helena, and R. H. Glover, of Great Falls, for respondents.

ANGSTMAN Justice.

This action was tried to the court without a jury. The court found for defendants and the plaintiff appealed from the judgment. The facts are these: Defendant Staunton entered into a written contract with the state, acting through the highway commission, to construct a certain designated highway in Toole county. The contract, so far as material on the point we are now to consider, contained these provisions:

"The contractor further covenants and agrees that he will well and truly pay all laborers, mechanics, subcontractors and material men who perform work or furnish material under this contract, and all persons who shall supply him and/or the subcontractors with provisions, provender and supplies for the carrying on of the work. ***

The contractor shall not sublet any portion of the contract without the previous written consent of the commission. Consent on the part of the commission will be given only when in its opinion the best interests of the state will be served by so doing. The subletting of any or all of the work will in no way relieve the contractor of any responsibility under his contract and the commission may for cause order any or all sub-contracts cancelled and the sub-contractors removed from the work. Any loss or damage that may be suffered on account of such action shall be borne by the contractor. Sub-contractors will be recognized only in the capacity of foremen or responsible employees of the contractor; and except as such they shall have no relations with the commission.

Each and every sub-contract shall be in writing and shall provide that the work be performed in accordance with all the provisions of the agreement or contract obligating the general contractor. Certified copies of all sub-contracts shall be furnished to the commission for approval before execution by the parties to such subcontract and a copy of such approved subcontract shall be filed with the commission after execution by the parties thereto."

The contract also contained this clause: "It is expressly understood and agreed by and between the parties hereto that as a condition precedent to the complete execution of this contract, the contractor will furnish a good and sufficient surety bond in the amount of One hundred sixteen thousand six hundred twenty-two and 33/100 Dollars ($116,622.33) to be conditioned upon the faithful performance of the covenants and agreements as herein set forth by him to be performed, subject to the approval by the Chairman of the State Highway Commission and the Attorney General of the State of Montana."

Defendant surety company became surety on the bond furnished pursuant to, and conditioned as required by, section 5668.41, Revised Codes, reading in part as follows:

"Whereas, it was one of the conditions of the award of the State Highway Commission, acting for and on behalf of the State of Montana, pursuant to which said contract was entered into, that these presents should be executed:

Now, therefore, the condition of this obligation is such that if the above bonded 'principal' as contractor shall in all respects faithfully perform all of the provisions of said contract, *** and shall well and truly pay all laborers, mechanics, sub-contractors and material men who perform work or furnish material under said contract, and all persons who shall supply him or the sub-contractor with provisions, provender and supplies for the carrying on of the work, *** then this obligation to be void or otherwise to be and remain in full force and virtue."

Thereafter Staunton entered into a contract with the Cascade Construction Company, a Montana corporation, whereby that company agreed to perform a designated part of the work involved in the construction of the highway project, consisting of hauling road material, at the agreed price of 1/2 cent a hundred feet. It was stipulated that all work should be done in accordance with the specifications set forth in the contract between Staunton and the state. This agreement also contained this clause, "It is further agreed and understood that as a part of the consideration of this contract, the said party of the second part (being the Cascade Construction Company) shall act as superintendent herein for said party of the first part (being Staunton) and without further compensation." Whether this contract obtained the written consent of the highway commission does not appear, but it was shown that it was filed with that commission.

Plaintiff furnished to the Cascade Construction Company petroleum products for carrying on its work on the highway. It was paid some on account, but there is a balance due for which recovery is sought in this action.

The crucial point in the case is whether it was incumbent upon plaintiff to give the notice prescribed by section 5668.42, Revised Codes. That section reads: "Every person, firm or corporation furnishing provender, provisions, materials or supplies to be used in the construction, performance, carrying on, prosecution or doing of any work for the state, or any county, city, town, district, municipality or other public body, shall not later than seven (7) days after the date of the first delivery of such provender, material, supplies or provisions to any subcontractor or agent of any person, firm or corporation having a subcontract for the construction, performance, carrying on, prosecution or doing of such work, deliver or send by registered mail to the contractor a notice in writing stating in substance and effect that such person, firm or corporation has commenced to deliver provender, provisions, materials or supplies for use thereon, with the name of the subcontractor or agent ordering or to whom the same is furnished, and that such contractor and his bond will be held for the same, and no suit or action shall be maintained in any court against the contractor or his bond to recover for such provender, provisions, material or supplies, or any part thereof, unless the provisions of this act have been complied with."

The court found that plaintiff failed to comply with this section of the statute, and it is quite clear from the findings of fact and conclusions of law that recovery was denied mainly because of that fact.

Plaintiff contends that in view of the contract between Staunton and the state making subcontractors employees of the contractor, and in view of the contract between the Cascade Construction Company and Staunton, wherein Staunton agreed that the construction company was his superintendent, and Staunton's agreement to pay all persons who should furnish the subcontractor with supplies no notice was required to be given under section 5668.42. It relies, in the main, upon certain decisions of the Supreme Court of Washington, from which state our statute was adopted with but slight changes. Kirkpatrick v. Douglas, 104 Mont. 212, 65 P.2d 1169. The Supreme Court of Washington has held under statutes practically identical with ours that unless the consent of the commission or board to the subletting is had, and unless the subcontract is filed, the notice required by the statute need not be given. Cascade Construction Co. v. Snohomish County, 105 Wash. 484, 178 P. 470. When the consent is not obtained, the subcontractor becomes in legal effect the agent of the contractor. Crane Co. v. Musgrave & Blake, 102 Wash. 59, 172 P. 866.

Here as above noted, the subcontract was filed with the highway commission, and for the purposes of the case we may assume that the highway commission consented to the subletting. By the terms of the contract, there was expressly established the relationship of principal and agent between Staunton and the Cascade Construction Company, and Staunton expressly agreed to pay all persons furnishing supplies to the Cascade Construction Company, and we need not here base the agency upon the failure to obtain the consent of the highway commission. That this action...