Morganton Mfg. & Trading Co. v. Anderson

• Decision Date: 15 April 1914
• Citation: 81 S.E. 418,165 N.C. 285
• Parties: MORGANTON MFG. & TRADING CO. ET AL. v. ANDERSON ET AL.
• Court: North Carolina Supreme Court

81 S.E. 418

165 N.C. 285

MORGANTON MFG. & TRADING CO. ET AL. v. ANDERSON ET AL.

Supreme Court of North Carolina

April 15, 1914

Appeal from Superior Court, Forsyth County; Lane, Judge.

Action by the Morganton Manufacturing & Trading Company and others against E. L. Anderson and another to enforce liens for materials furnished. From the judgment, plaintiffs appeal. Affirmed.

In construing a codified statute, resort may be had to the original legislation.

The defendant E. L. Anderson was the owner of a lot in Winston and on the 28th day of August, 1911, he entered into a contract with the defendant C. A. Crews, as contractor, by which the latter agreed to build a house thereon for $4,600.

The parts of the contract material to be set out are: "The contractor shall and will provide all the materials and perform all the work for the erection and completion of a two-story frame residence located on lot fronting Brookstown street, in the city of Winston, N.C. * * * To secure the true and faithful performance of all and every of the covenants and agreements herein mentioned. The party of the first part shall, at his own expense, within ten days from this date, furnish said party of the second part a bond signed by the American Surety Company in the sum of $1,000, to protect the second party against damage suits, for personal injuries, for liens, for material or labor; to remain in full force and effect until representation of satisfactory evidence of the satisfaction of all such claims. The final payment shall be made within ten days after the completion of the work included in this contract, and all payments shall be due when certificates for the same are issued. If at any time there shall be evidence of any lien or claim for which, if established, the owner of the said premises might become liable, and which is chargeable to the contractor, the owner shall have the right to retain out of any payment then due or thereafter to become due an amount sufficient to completely indemnify him against such lien or claim. Should there prove to be any such claim after all payments are made, the contractor shall refund to the owner all moneys that the latter may be compelled to pay in discharging any liens on said premises made obligatory in consequence to the contractor's default."

By agreement the bond provided for in the contract was executed by the defendant the Maryland Casualty Company, instead of by the American Surety Company, and the penalty in the bond was $4,600 and not $1,000.

The bond contains the following provisions, among others "Now, therefore, the condition of this obligation is such that if the said principal shall faithfully perform said contract on his part, according to the terms, covenants and conditions thereof (except as hereinafter provided), then this obligation shall be void, otherwise to remain in full force and effect. This bond is executed by the surety upon the following express conditions, which shall be conditions precedent to the right of the owner to recover hereunder. * * * The surety shall not be liable under this bond to any one except the owner, but it is agreed that the owner, in estimating his damage, may include the claims of mechanics and materialmen, arising out of the performance of the contract, and paid by him, only when the same by the statutes of the state where the contract is to be performed are valid liens against his property."

The Morganton Manufacturing & Trading Company furnished materials for said building, and which were used therein, of the value of $1,063.31, and the other creditors materials of the value of $1,877.18, all of which were furnished under contract with the said Crews, contractor. All of said creditors filed notice of their claims with the defendant Anderson, and, at the time of filing such notice, there was due the contractor Crews, who is insolvent, by the owner Anderson, $1,328.39. Said creditors also filed notice of lien in the office of the clerk of the superior court; the notice of lien of the Morganton Manufacturing & Trading Company being the first filed.

The matters in controversy were tried before a referee, Mr. J. E Alexander, and upon the facts found by him, substantially as herein stated, his honor adjudged that the Maryland Casualty Company was not liable to the creditors, and that the balance in the hands of Anderson should be distributed pro rata among all the creditors, to which the creditors excepted and appealed.

The creditors, other than the Morganton Manufacturing & Trading Company, except to: (1) "The refusal of the court to find, as a matter of law, that the Maryland Casualty Company was bound to said parties who furnished material in the completion of the house of E. L. Anderson, and further except to the judgment of the court that the bond executed by the surety company was bound only to the extent of protecting E. L. Anderson, and did not protect materialmen and laborers for work done and material furnished. * * *" The Morganton Manufacturing & Trading Company excepts: "To the ruling of the court overruling the said plaintiff's first exception to the report of the referee, and holding that this plaintiff was not entitled to priority by reason of filing the first lien in the office of the clerk of the superior court of Forsyth county, as set forth in said exception, which is hereby referred to and made a part hereof as fully as if written herein." (2) "To the ruling of the court in overruling said plaintiff's second exception to the report of the referee, and holding that the parties were entitled to prorate in the fund, and that this plaintiff was not entitled to priority, as set forth in said exception, which is hereby referred to and made a part hereof, as fully as if written herein." (3) "To the judgment of the court that the fund should be prorated between all claimants, notwithstanding this plaintiff has filed the first lien in the office of the clerk of the superior court of Forsyth county."

J. T. Perkins, of Morganton, for Morganton Mfg. & Trading Co.

Watson, Buxton & Watson and L. M. Swink, all of Winston-Salem, for other creditors.

F. P. Hobgood, Jr., of Greensboro, for Maryland Casualty Co.

ALLEN J.

The contract entered into between the defendants Anderson and Crews, and the bond executed by the Maryland Casualty Company to secure its performance must be considered together, as contended by the creditors, in order to properly determine the extent of the obligations of the bond, and, when we examine the contract, we find first an agreement upon the part of the contractor to provide all the materials and to perform all the work necessary to erect the building.

The contention of the creditors is that this is an agreement to furnish the materials and labor and impliedly to pay for them, and, as the bond was executed to secure performance of the contract, the casualty company is bound for the payment of the claims for materials. If this is a proper construction of the contract, and the casualty company is bound for obligations not expressed in the bond, the conclusion contended for would seem to follow, in the absence of restrictive words in the bond, but we are of opinion this is not a correct view of the agreement of the parties.

The stipulation that the contractor will furnish the materials and labor adds nothing to the agreement to build the house, because it could not be built without the materials and labor, and there can be no implied promise to pay between the contractor and the owner, the parties to the contract, as the contractor was to furnish the materials, and consequently there could be no implied promise to pay him for them, and the owner made the express promise to pay $4,600 for the building, which included materials.

The parties undertook to reduce their agreement to writing, and presumably inserted every provision regarded material, and it is a well-recognized principle that there can be no implied contract, where there is an express contract...