Hicks v. Randich

• Decision Date: 25 September 1928
• Docket Number: (No. 6262.)
• Citation: 144 S.E. 887
• Court: West Virginia Supreme Court
• Parties: HICKS. v. RANDICH et al.

144 S.E. 887

HICKS.

v.RANDICH et al.

(No. 6262.)

Supreme Court of Appeals of West Virginia.

Sept. 25, 1928.

(Syllabus by the Court.)

Appeal from Circuit Court, Raleigh County.

Action by H. W. Hicks, trading, etc., against J. M. Randich and others. From the decree plaintiff appeals. Reversed, bill reinstated, and decree rendered.

David D. Ashworth and Clay S. Crouse, both of Beckley, for appellant.

Hubard & Bacon, of Fayetteville, for appellee Republic Casualty Co.

LIVELY, P. The only question involved in this appeal is whether the plaintiff's claim, which consists of an account for material used in the repair of trucks and the labor expended in placing those repairs, is covered by the contract and bond given for faithful performance of the contract, and for the payment of labor expended and material furnished in and about the construction of the public road.

The case involves the question of the liability of a bonding company as surety on the bond of a contractor for the building of a public road. It was tried in the lower court on the pleadings and exhibits, and upon an agreed statement of facts. The decree complained of dismissed the plaintiff's bill, and from that decree he appeals.

Randich & Company was awarded two contracts by the county court of Raleigh county, for the building of two county-district roads, and was required under the statute, and by the contract, to execute bonds for the faithful performance of the contract and certain obligations hereinafter fully set out. One bond was in the sum of $47,553.08, and the other for $31,625.73. The contract is to the effect that the contractor will construct the road according to the advertisements and estimates, and will furnish, at his own cost and expense, all the necessary materials, labor, tools, and appliances to build and complete the same, in accordance with the specifications and plans, and as set out in his proposal; and the contract mentions that a copy of the bond to secure proper compliance with the contract is attached to and made a part of the contract. The condition of the bond is that, if the contractor shall in all respects comply with the terms and conditions of the contract, and shall complete the work, and shall save the county court harmless from any liability or carelessness or negligence in its construction, or liability for payment of wages or materials furnished, "and shall well and truly pay all and every person furnishing material or performing labor in and about the construction of said roadway, all and every sum or sums of money due him, them, or any of them, for all such labor and material for which the contractor is liable, " then the obligation is to be void; otherwise, to remain in full force and virtue. The two contracts and two bonds are similar, and what is said of one applies to both. Plaintiff, who was the owner of a garage and kept automobile parts for sale and did repair work on automobiles, repaired and furnished automobile parts to the contractor's trucks used in the building of the roads, while the building was in progress. The trucks were used by the contractor in hauling crushed stone and the like on the road, and it is stipulated that the material furnished, and the repairs and labor supplied, were necessary in order that the trucks should be in proper condition to haul the stone, and the like, used inthe construction; but it is also stipulated that all of the repairs were not totally destroyed by use or otherwise during the progress of the work. An itemized account of the automobile parts furnished and the labor expended is filed wth the plaintiff's bill, and amounts to $2,570.77. The amount of the material furnished to repair the trucks and make them fit for operation is largely in excess of the labor performed in placing these repairs on the trucks.

Plaintiff asserts that the surety on the bond, the Republic Casualty Company, is liable for the payment of plaintiff's claim under the bond; whereas the surety company asserts that it is not so liable. The circuit court found in favor of the contention of the surety company and dismissed plaintiff's bill.

A road contractor is required by law to execute a bond. The statutes require a county court, or other public body entering into a contract of that character, to take from the contractor a bond. Section 104 of chapter 43 of the Code gives the county court authority to permanently improve its county-district roads, and to contract therefor with any contractor—

"and take bonds and security in the penalty equal to 50 per centum of the estimated cost of the work in question, from any such contractor, for the faithful performance of his contract."

It will be observed that this statute only requires a bond for the faithful performance of the contract. And the penalty is only 50 per centum of the estimated cost of the work. There is nothing in that statute which requires a bond to be given for the payment of work and materials furnished by third persons, unless the contract and bond themselves so provide. And third persons would have no claim by virtue of that statute, and none under a bond. But there is another statute, section 12, c. 75, Code, which makes it the duty of the county court to require every person to whom it shall award a contract for the construction of public building, or other structure, to require from the contractor a bond in the penal sum equal at the least to the reasonable cost of the—

"materials, machinery, equipment, and labor required for the completion of said contract, and conditioned that in the event such contractor shall fail to pay in full for all such materials, machinery, equipment, and labor used by him in the erection, construction, improvement, alteration, or repair of such public building or other structure, or building or other structure used or to be used for public purposes, then said bond, and the sureties thereon, shall be responsible to said materialmen, furnisher of machinery or equipment, and furnisher or performer of said labor, or their assigns, for the full payment of the full value thereof."

It will be noted that section 104, c. 43, of the Road Law says the county court may take bonds with surety for the faithful performance of the contract; and, as above noted, nothing is said about requiring payment for material, machinery, equipment, and labor furnished by third persons. The bond in question here does provide for the payment for material and labor used in and about the construction of the roadway. The bond evidently was given in view of section 12 of chapter 75, which is a mandatory statute requiring bonds for the payment to third persons for materials, machinery, equipment, and labor used in the work; and it was an attempt to comply with that statute. In arriving at the intention of the parties in entering into this contract and bond, both statutes must be considered and read in pari materia. A permanently improved highway is a "structure" within the meaning of section 12, c. 75, Code. State ex rel. Sand & Gravel Co. v. Royal Indemnity Co., 99 W. Va. 277, 128 S. E. 439, 43 A. L. R. 552. It will be noted that this section is contained in the chapter on mechanics' liens. It is against public policy to have mechanics' liens upon buildings and structures used for public purposes. It would hamper the conduct of public affairs to have public property put up and sold at auction under mechanics' liens, or like liens; and hence the evident object of the Legislature in enacting this statute was to provide a remedy for laborers and materialmen in payment of their debts equal to that of the mechanics' lien. And it will be observed that this statute requires the bond to be sufficient to pay for reasonable cost of the materials, machinery, equipment, and labor used by the contractor in the work. It may be that the statute, rather clear in its terms, was intended to protect the seller of machinery and equipment used by the contractor. A contractor may have no equipment when he makes his bid and is awarded the contract. That would not necessarily prevent the award of the contract by the county court or other public body, for he gives a bond sufficient to pay for the machinery, materials, and labor used therein. A surety company signing such bond for a consideration is supposed to know the capacity and fitness of its principal to perform the work, and no doubt takes into consideration his business ability to meet his obligations for material, machinery, and labor used in the contract for which it is surety. However, we are not called upon to determine in this case whether the seller of machinery is protected in the purchase price under a bond given in pursuance of this statute. What we have said is simply indicative of the intention of the act gathered from its terms, its location as a part of the...