Haynes Hardware Co. v. Western Casualty & Surety Co.
| Decision Date | 23 January 1943 |
| Docket Number | 35745. |
| Citation | 133 P.2d 574,156 Kan. 356 |
| Parties | HAYNES HARDWARE CO. et al. v. WESTERN CASUALTY & SURETY CO. |
| Court | Kansas Supreme Court |
Syllabus by the Court.
In determining whether completion bond was intended to provide for payment of lien claims for material and labor used in construction of apartment building, contract for construction of building was deemed a part of bond where bond, which owner, as builder and principal, executed in compliance with such contract, referred to contract, and contract designated principal of bond as owner and contractor, and specifications required contractor to furnish the labor and materials to finish the work.
In determining lien claimants' right to recover against surety on completion bond for material and labor used in construction of apartment building, intent of bond with respect to protection of claimants, and not the motive of the parties, was the controlling factor.
In ascertaining intent of completion bond as respects right of lien claimants to recover against surety for labor and materials used in construction of apartment building, Supreme Court was required to construe bond and contract for construction of building together.
A completion bond was intended as a "faithful performance bond" and was given by the principal as owner and contractor and was executed by the surety for direct benefit of lien claimants for material and labor used in construction of apartment building, where obligees made loan to principal who was owner and builder, before apartment was constructed and construction contract, which was part of bond, designated principal as owner and contractor, and required contractor to furnish labor and materials to finish the work.
Doubt whether completion bond was intended to protect lien claimants for material and labor used in construction of apartment building, by a subsequent construction placed on the bond by the parties, was resolved in favor of lien claimants, where such construction indicated that all parties to bond clearly understood that it was intended to guarantee payment of material and labor claims.
Where construction contract, which was part of completion bond required owner and contractor to pay claims for labor and materials used in construction of apartment building claimants of liens for labor and materials so used were entitled to enforce payment of their claims from surety on the bond, notwithstanding provision of bond that no right of action should accrue thereon for use of any one other than specified obligees.
Where an irreconcilable conflict exists between general provisions of a contract and particular portions written into the contract, preference is given to the latter for purpose of ascertaining the intention of the parties.
A third person although not a party to a contract and without knowledge thereof may avail himself of a contract made by others for his benefit.
The general principal that a third person, although not a party to a contract and without knowledge thereof, may avail himself of a contract made by others for his benefit, applies to actions by claimants against sureties on completion bonds to enforce liens for labor and materials used in construction of buildings.
Where construction contract, which was part of completion bond required owner-builder to pay claims for material and labor used in construction of apartment building, lien claimants' right to require surety on bond to pay claims for material and labor so used was not defeated by bond provision that no right of action should accrue on bond for use of anyone other than specified obligees, where claimants did not participate in bond.
Where completion bond was intended for benefit of laborers and materialmen and obligees, and it was to interest of obligees that former be paid for labor and material used in construction of apartment building securing obligees' mortgage from owner, obligee was not barred by bond provision that no action should accrue thereon to use of anyone other than the obligees, from becoming co-plaintiff with laborers and materialmen to collect their liens from surety.
An obligee of a completion bond was authorized to become a co-plaintiff with laborers and materialmen to collect lien claims from surety of bond, notwithstanding provision of bond that no right of action should accrue thereon for use of anyone other than the obligees. Gen.St.1935, 60-403.
Where owner of apartment building had defaulted in payment of laborers' and materialmen's claims arising from construction of building and obligee of owner's completion bond, who held owner's mortgage secured by the building to be constructed, financed a new loan to owner, released the old mortgage, and assigned the new mortgage, obligee had sufficient "interest" to maintain action against surety on bond to collect the laborers' and materialmen's claims for their use. Gen.St.1935, 60-403.
Final ruling sustaining demurrer to petition by claimant against surety on completion bond to enforce liens for material and labor used in construction of apartment building did not bar action under amended petition setting forth additional material provisions of construction contract, which was part of bond, charging that bond had been construed to guarantee payment of such claims, and adding an obligee of the bond as coplaintiff. Gen.St.1935, 60-403.
Where surety on completion bond was not prejudiced by obligee's action against owner-principal to foreclose mortgage on an apartment building, completion of which was secured by the bond, obligee was not "estopped" from maintaining action on bond against surety to collect claims for labor and material used in the building for use of the laborers and materialmen. Gen. St.1935, 60-403.
Where foreclosure action by obligee of completion bond against owner-principal, claimants of liens for labor and materials used in construction of apartment building, and surety on bond was dismissed without prejudice, and old loan was refinanced under settlement agreement to which surety was not a party, providing that agreement should not relieve persons liable to lien claimants, surety was not relieved from liability on the bond to laborers and materialmen.
A party cannot split a single cause of action but must set up all damages suffered by him as the result of a breach of duty in one action.
Successful action by obligee against surety on completion bond for damages by principal's default in failing to pay claimants of liens for labor and materials used in construction of apartment building and for being obliged to refinance principal's loan from obligee did not bar action by obligee against surety for use of laborer and materialmen's lien claimants on ground that surety was attempting to split a cause of action, where the causes of action and persons were not identical. Gen.St.1935, 60-403.
Judgment in favor of obligee against surety on completion bond for damages from principal's failure to pay claimants of liens for labor and material used in construction of apartment building and for damages sustained by obligee's refinancing new loan to principal was not "res judicata" of obligee's action for use of claimants against surety on bond, where the parties and causes of action were not the same. Gen.St.1935, 60-403.
Where actions are on different causes of action the first judgment is not conclusive of matters which might have been litigated in the former action but parties are only bound by what was in fact litigated.
The record in an action on a bond, originally instituted by a lien claimant and in which an obligee in the bond later, by leave of court, joined as a co-plaintiff, for the purpose of recovering amounts due claimants for labor performed and material furnished on an apartment building, examined and held: (1) The contract for the construction of the building was written into and made a part of the bond; (2) the bond and contract considered and construed together, as they had to be, for the purpose of ascertaining the intent and purpose of the bond, disclosed (a) the principal executed the bond in the dual capacity of owner of the building and contractor; (b) the bond was intended to be a faithful performance bond which required the owner and contractor, the principal in the bond, to pay all claims for labor performed and material furnished in order to be entitled to estimated advancements out of the mortgage loan made to finance the construction of the building; (3) the parties to the bond, after its execution, construed the purposes and intent of the bond to be as indicated in 2(a) and 2(b) above; (4) in view of the special contractual provisions written into the bond, set forth in the opinion, for the benefit of laborers and materialmen, such persons were not precluded by a general and inconsistent provision in the bond, also set forth in the opinion, from maintaining an action on the bond; (5) the plaintiff obligee could properly maintain an action on the bond alone or as a co-plaintiff with a laborer or materialman for the benefit of the latter persons; (6) the sustaining of a demurrer to the original petition of a lien claimant from which ruling no appeal was taken, did not, under circumstances narrated in the opinion, constitute a bar to the maintenance of the instant action under the amended petition filed by leave of court; (7) the record in a previous mortgage foreclosure action, discussed in the opinion, did not constitute an estoppel to the maintenance of the instant action; (8) the record in a previous action, discussed in the opinion, instituted by the same obligee on the bond for damages did not bar the instant action on the ground of res judicata.
Appeal from District Court, Lyon County; Joe Rolston, Jr., Judge.
...
To continue reading
Request your trial
-
Weiner v. Wilshire Oil Co. of Tex.
...preference is given to the latter for the purpose of ascertaining the intention of the parties. (Haynes Hardware Co. v. Western Casualty & Surety Co., 156 Kan. 356, 133 P.2d 574; and Geier v. Eagle-Cherokee Coal Mining Co., 181 Kan. 567, 313 P.2d The paragraph specifically reserving the ove......
-
Holmes v. Kalbach
...French v. French, 161 Kan. 327, 167 P.2d 305, certiorari denied 329 U.S. 727, 67 S.Ct. 81, 91 L.Ed. 629; Haynes Hardware Co. v. Western Casualty & Surety Co., 156 Kan. 356, 133 P.2d 574; West v. Sims, 153 Kan. 248, 252, 109 P.2d 479. This, we may add, is the rule even though the party for w......
-
Geier v. Eagle-Cherokee Coal Min. Co.
...1085, and cases cited therein. Another rule of construction applicable to written contracts is found in Haynes Hardware Co. v. Western Casualty & Surety Co., 156 Kan. 356, 133 P.2d 574, where this court '* * * Where an irreconcilable conflict exists between general provisions of a contract ......
-
Smith's Estate, In re
...Derby Oil Co. v. McPherson Gas Co., 142 Kan. 373, 46 P.2d 872; West v. Sims, 153 Kan. 248, 109 P.2d 479; Haynes Hardware Co. v. Western Casualty & Surety Co., 156 Kan. 356, 133 P.2d 574; Holmes v. Kalbach, 173 Kan. 736, 252 P.2d 603). The contract being beneficial to Floyd, his acceptance t......