Kansas City To Use of Kansas City Hydraulic Press Brick Company v. Youmans

• Decision Date: 26 June 1908
• Parties: KANSAS CITY to use of KANSAS CITY HYDRAULIC PRESS BRICK COMPANY et al. v. F. C. YOUMANS et al., Appellants
• Court: Missouri Supreme Court

112 S.W. 225

213 Mo. 151

KANSAS CITY to use of KANSAS CITY HYDRAULIC PRESS BRICK COMPANY et al. v. F. C. YOUMANS et al., Appellants

Supreme Court of Missouri

June 26, 1908

Appeal from Jackson Circuit Court. -- Hon. John G. Park, Judge.

Reversed and remanded (with directions).

Frank P. Sebree and Peak & Strother for appellants.

(1) The contract of the appellant United States Fidelity & Guaranty Company sued on herein is a contract of guaranty. 14 Am. and Eng. Ency. Law (2 Ed.), 1128, 1130; 20 Cycl. of Law & Prac 1397; Bank v. Libbey, 101 Wis. 193. (2) The contract, being one of guaranty, is to be construed so as to give effect to the intention of the parties as it is to be gathered from the instrument, and so strictly as not to extend the meaning of the terms used in the guaranty, or to amplify such meaning, so as to increase the extent of the obligation. Eddy & Co. v. Sturgeon, 15 Mo. 203; Railroad v. Smith, 27 Mo.App. 378; Mitchell Bros. v. Railton, 45 Mo.App. 278; Bauman Jewelry Co v. Bertig, 81 Mo.App. 399; Bank v. Parrott, 125 Cal. 472; Hooper v. Hooper, 81 Md. 155; Bank v Hosie, 119 Mich. 116; Schwartz v. Hyman, 107 N.Y. 565; Morgan v. Boyer, 39 Oh. St. 326. (3) The appellant's contract is a limited and not a continuing guaranty, and appellant was bound under it to see that Youmans paid on the work the amount of $ 83,540, and no more. And more than that amount having been paid by the principal Youmans for the purposes specified in the contract, appellant's contract has been performed and it is no longer liable for any amount whatever. Eddy v. Sturgeon, 15 Mo. 198; Smith v. Van Wyck, 40 Mo.App. 522; Glass Co. v. Moore, 119 Mass. 435; Cutler v. Ballou, 136 Mass. 337; Sherman v. Mulloy, 174 Mass. 41; Rueter v. Howe, 60 N.H. 579; Marx v. Schwartz, 14 Ore. 180; Congdon v. Reed, 7 R. I. 578; Lawton v. Maner, 10 Rich. L. (S. C.) 323; Solary v. Stultz, 22 Fla. 265; Price v. Webster, 30 Ga. 802; Columbus Sewer Pipe Co. v. Ganser, 58 Mich. 385; Towhy v. McMurran, 57 Minn. 242. (4) The Richards & Conover Hardware Company was not entitled to recover anything on its claim, inasmuch as none of the articles therein mentioned were used in the sewer, or became any part of the sewer. Fitzpatrick v. Thomas, 61 Mo. 515; State v. Gregory, 170 Mo. 604; Indiana Powder Co. v. Railroad, 116 Mo.App. 364; Basshor v. Railroad, 65 Md. 99; Allen v. Elwert, 29 Ore. 443; McAuliffe v. Jorgenson, 107 Wis. 132; Beals v. Fidelity & Deposit Co., 76 A.D. 526, 78 N.Y.S. 584; affirmed, per curiam, in 178 N.Y. 581; Philadelphia v. Malone, 214 Pa. St. 90; Oppenheimer v. Morrell, 118 Pa. St. 189; Standard Oil Co. v. Lane, 75 Wis. 636; Holter Hdw. Co. v. Ontario Min. Co., 24 Mont. 198; U. S. v. City Trust, Safe Dep. & Security Co., 21 App. D. C. 369. (5) Even if the Richards & Conover Hardware Company is held to be entitled to recover for some of the items claimed for, still it is not entitled to recover for any of the items specifically set out in the sixteenth exception of appellant to the referee's report; such items amounting to $ 382.86. Authorities under point 4. (6) Section 20 of article 9 of the Kansas City charter is unconstitutional and void, and this proceeding not being justified by any valid provision of law, the judgment rendered is erroneous and should be reversed. Badgley v. St. Louis, 149 Mo. 122; Noble v. Kansas City, 95 Mo.App. 167.

Botsford, Deatherage & Young, Johnson & Lucas, Charles B. Adams, R. H. Field, M. A. Fyke and Henry S. Conrad for respondents.

(1) Section 20, article 9, of the charter was and is valid and is enforceable and in harmony with the Constitution and laws of the State. Kansas City ex rel. v. Schroeder, 196 Mo. 281; State ex rel. v. Field, 99 Mo. 352; Kansas City v. Scarritt, 127 Mo. 643; St. Louis v. Von Phul, 133 Mo. 651; Kansas City v. Marsh Oil Co., 140 Mo. 458; Devers v. Howard, 144 Mo. 671; Stephens v. Kansas City, 146 Mo. 460; Kansas City v. Ward, 134 Mo. 172; Kansas City v. Bacon, 147 Mo. 259; Kansas City v. Mastin, 169 Mo. 80. (2) The contention of appellants' counsel that Youmans was bound to pay the sum of $ 83,540 and that when that sum was paid by him the liability of appellants' sureties ceased, is not sustained by the contract sued on. The contract makes the sureties liable severally to each one of the materialmen and laborers for the amount of material and labor which they respectively put in the work; that is, a several liability in favor of each laborer and each materialman. Youmans was never liable to pay any person, or persons, the sum of $ 83,540. That sum was merely estimated by the engineer as the amount the work would cost, and the only figure which that sum cuts in the contract is that it fixes the maximum aggregate liability of the sureties who signed the contract, for labor and materials, which Youmans failed to pay for. Lyman v. City of Lincoln, 38 Neb. 794; Doll v. Crume, 41 Neb. 655; School District v. Livers, 147 Mo. 580. (3) The contract of appellants created a liability not only with those who contracted direct with Youmans, the contractor, but with subcontractors for material and labor. The purpose was to liberalize the contract obligation of the contractor and his sureties so as to make it answerable to all persons, whether original or subcontractors, who furnished material or labor on the work. Glencoe Lime & Cement Co. v. Ward, 86 Mo.App. 163; Ihrig v. Scott, 5 Wash. St. 584; Sepp v. McCann, 47 Minn. 364. (4) The propositions of this brief are supported by the following additional authorities: Guarantee Co. v. Press Brick Co., 191 U.S. 416; Bethany v. Howard, 149 Mo. 513; Spokane Lumber Co. v. Boyd, 58 P. 337; United States v. National Surety Co., 92 F. 549; United States Fidelity & Guaranty Co. v. Omaha Bldg. & Const. Co., 116 F. 145. (5) The liability of the appellant sureties in this case cannot be determined by the general principles of the law of surety or the law of guaranty, but the appellant surety company in this case, being in the business of making this class of bonds for a consideration, sustains the position of insurer and not the position of surety or guarantor. 27 Am. and Eng. Ency. Law (2 Ed.), 452.

Rees Turpin and Williams & Hunter also for respondents.

(1) Appellant is liable on the contract for the full amount of the bills left unpaid by Youmans irrespective of the amount paid out on the work by Youmans. (2) The procedure established in this State by the Code and the decisions of the courts has been followed in this case; plaintiffs are entitled to recover on this contract without the aid of the charter, and plaintiffs Ash Grove White Lime Association and The Richards & Conover Hardware Company were properly made parties plaintiff under the general rules of procedure. Badgley v. St. Louis, 149 Mo. 122; State ex rel. v. Field, 99 Mo. 352; Devers v. Howard, 144 Mo. 671; Glencoe Lime & C. Co. v. Wind, 86 Mo.App. 163; Buffalo Forge Co. v. Mfg. Co., 105 Mo.App. 484; Kansas City ex rel. v. Shroeder, 196 Mo. 281; Carter v. Mills, 30 Mo. 432; Traven v. Dawson, 65 Mo.App. 93. (3) All of the items of material furnished by plaintiff The Richards & Conover Hardware Company were within the terms and intent of the contract and were used up and consumed in the work. This plaintiff is entitled to recover for them, and the finding of the referee and the judgment of the circuit court for this plaintiff should be sustained. Rapauno Chemical Co. v. Railroad, 59 Mo.App. 6; Andrews v. Railroad, 16 Mo.App. 299; Indiana Powder Co. v. Railroad, 116 Mo.App. 364; Schaghticoke Chem. Co. v. Greenwich, 76 N.E. 153; Zipp v. Fidelity & Dep. Co., 73 A.D. 20; Beals v. Fidelity & Dep. Co., 76 A.D. 526; Keystone Mining Co. v. Gallagher, 5 Col. 23.

GRAVES, J. Gantt, C. J., Burgess, Fox and Woodson, JJ., concurring; Lamm, J., concurs in separate opinion; Valliant, J., dissents in separate opinion.

OPINION

In Banc.

Per Curiam.

This cause having been transferred to the Court in Banc and having been re-argued, the following opinion of Judge Graves, in Division No. One, is adopted as the opinion of the Court in Banc.

Gantt, C. J., Burgess, Fox and Woodson, JJ., concurring therein; Lamm, J., concurs in separate opinion; Valliant, J., dissents.

GRAVES J.

Action by relators and intervening petitioners in the name of Kansas City on a contract entered into for the construction of a sewer in said city.

By ordinance No. 19459, the city of Kansas City provided for the building of a sewer in Sewer District No. 218 of said city. Having been the lowest bidder for the work required by said ordinance, the defendant, F. C. Youmans, was awarded the contract. He entered into such contract and one Geo. J. Baer, now deceased, and defendant United States Fidelity and Guaranty Company signed as his sureties or guarantors. In said contract, which is the contract sued upon herein, F. C. Youmans is designated as party of the first part, these sureties or guarantors as parties of the second part, and the city of Kansas City as party of the third part. By the contract the first party was to be paid for his work in taxbills against the property in the district. This contract was drawn in form as prescribed by section 20 of article 9 of the Kansas City charter, and this suit now before us was instituted in the manner provided for in said section, so that we quote it in full, as follows:

"Contracts for making city improvements on streets, sidewalks, avenues or alleys, or for constructing sewers, let to the lowest bidder, shall contain a covenant on the part of the contractor or contractors with the city, to pay for the work and labor of all laborers and teamsters, teams and wagons employed on the job and for all materials used therein, and performance of such covenant to be guaranteed by two or more sureties signing...