N.Y. Cas. Co. of N.Y. v. Wallace & Tiernan, Inc.

Decision Date22 January 1935
Docket NumberCase Number: 22766
Citation174 Okla. 278,50 P.2d 176,1935 OK 43
CourtOklahoma Supreme Court
PartiesNEW YORK CASUALTY CO. OF NEW YORK v. WALLACE & TIERNAN, Inc.
Syllabus

¶0 1. PRINCIPAL AND SURETY - Rules of Construction of Contract of Suretyship.

A contract of suretyship should be interpreted and the intelligible meaning of its language ascertained. It will then be construed and applied strictly in favor of the surety, and without allowance of an implication against him; but this rule in no way interferes with the use of the ordinary tests by which the actual meaning and intention of the contracting parties are determined, and the same canons of interpretation which apply in the interpretation of other contracts should be applied in suretyship contracts.

2. BONDS - Construction of Statutory Bond.

Statutory bond must be construed and enforced in terms of statute.

3. SAME - Superadded Stipulations in Bond Disregarded.

Superadded stipulations in statutory bond must be disregarded and true intent of parties enforced.

4. MUNICIPAL CORPORATIONS - Liability on Statutory Contractor's Bond to Persons Furnishing Labor or Material for Public Improvement - Provision of Bond Confining Benefit to Those Who Might Become Entitled to Liens Held Meaningless and Disregarded.

The effect of a provision in a bond given to a city by a contractor for improvement of a city building, for payment by the contractor of all indebtedness incurred by the contractor in carrying out the contract, as one for the benefit of persons furnishing labor or material, allowing them to sue on the bond is not defeated, under the rule of expressio unius est exclusio alterius, by the declaration of the bond that it is made for the benefit of all who may become entitled to liens under the contract; such clause not including any person a the building under the law not being subject to lien, so that it is without force and meaningless, and the bond is to be treated as though such words were omitted.

5. PLEADING - Sufficiency of Petition With Exhibits Attached to Withstand Demurrer.

On demurrer to petition, court has duty to examine petition and exhibits attached thereto, and if they together state facts sufficient to constitute a cause of action, demurrer should be overruled.

Appeal from District Court, Oklahoma County; Orel Busby, Assigned Judge.

Action by Wallace & Tiernan, Inc., against the New York Casualty Company of New York. Judgment for plaintiff, and defendant appeals. Affirmed.

Tomerlin & Chandler and Troy Shelton, for plaintiff in error.

Chas. L. Yancey, H.L. Douglass, and R.L. Cox, for defendant in error.

PER CURIAM.

¶1 This is an appeal from a judgment of the district court of Oklahoma county. The parties will be referred to in this case as they appeared in the trial court, the defendant in error as plaintiff, and the plaintiff in error as defendant.

¶2 The plaintiff instituted suit against the defendant for the recovery of $715 for certain equipment furnished to the J. D. Mann Construction Company at New Cordell, Okla., used in the construction of a sewer disposal plant for said city. The said J. D. Mann Construction Company had a written contract with the city to do the work and furnish the material required for the construction of the sewer disposal plant. The defendant, as surety, joined with the J. D. Mann Construction Company in executing a bond entitled "Statutory Lien Bond," which bond is in the following words and figures, to wit:

"New York Casualty Company of New York, N Y
"Statutory Lien Bond.
"Know All Men By These Presents:
"That we, J. D. Mann Construction Company of Oklahoma City, Okla., as principal, and New York Casualty Company of New York, a corporation, organized and existing under and by virtue of the laws of the state of New York, duly authorized to transact business in the state of Oklahoma, as surety, are held and firmly bound unto the state of Oklahoma as obligee for the use and benefits of all persons in whose favor liens might accrue under and by virtue of the mechanic's lien laws of the state of Oklahoma, in the penal sum of thirty-four thousand eight hundred three and 27-100 dollars, good and lawful money of the United States of America, for the payment of which well and truly to be made, we bind ourselves, our heirs executors, administrators, successors, and assigns, firmly by these presents.
"Whereas, the principal entered into a written contract, dated September 23, 1930, with the city of New Cordell, Okla., to do the work and furnish all materials required for the construction of the sewer and disposal plant extensions, for the city of New Cordell, Okla., as shown on the plans, to he in strict accordance with the plans and specifications and advertisement for same, as approved by the mayor and city council of the city of New Cordell, Okla,. a copy of which contract is hereto annexed.
"Now, therefore, the condition of this obligation is such, that if the said principal shall well and truly pay all indebtedness incurred for labor and material used or furnished in the carrying out of said contract, which might be the basis of liens against said property, as aforesaid, and the real estate on which it is situated, then this obligation shall become null and void, otherwise shall remain in full force and effect.
"Signed and sealed this 23rd day of September, 1930.
"J. D. Mann Construction Company,

"By J.D. Mann.

"New York Casualty Company, N Y

"By Arthur Burkett, Attorney-in-fact.

"(Seal)

"(Indorsements)

"Cordell Sewer Extension Bond

"Filed Oct. 8, 1930

"Myrtle Taylor, Court Clerk

"Eva M. Penn, Deputy."

¶3 Suit was instituted against the defendant only. The defendant demurred to the petition on the ground that the petition did not state a cause of action. The demurrer was overruled. The defendant elected to stand upon its demurrer and declined to plead further. Thereupon judgment was rendered for the plaintiff on its petition, to which was attached a properly verified account.

¶4 The defendant prosecutes this appeal, asking for reversal. The two grounds upon which defendant depends may be summarized as follows, to wit:

(1) That there was no liability on the bond for the reason that it contained the following language:
"are held and firmly bound unto the state of Oklahoma, as obligee, for the use and benefits, of all persons in whose favor liens might accrue under and by virtue of the mechanic's lien laws of the state of Oklahoma"

- and similar expression in another paragraph of the bond.

(2) That the petition does not sufficiently allege that, the material was used or consumed in the construction of the sewer system.

¶5 The defendant cites and depends upon the cases of Smith v. Bowman 32 Utah, 33, 88 P. 687; Hutchinson v. Krueger, 34 Okla. 23, 124 P. 591, and American Sash & Door Co. v. McGregor, 129 Okla. 261, 264 P. 602. We cannot agree with defendant that these cases are controlling in the case at bar.

¶6 A study of the case of Smith v. Bowman, supra, discloses that at the time the bond in question in that case was given, there was a statute in Utah requiring a contractor for the construction of public improvements to give a bond; the bond in that case contained an enforceable obligation in favor of the Utah State Agricultural College, the obligee therein. It contained other material. However, the bond was not a nullity.

¶7 The case of Hutchinson v. Krueger, supra, is not controlling, for the reason that the bond in that ease was given pursuant to section 6162, Compiled Laws of Oklahoma of...

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