Peter Kiewit Sons' Co. v. Nat'l Cas. Co.
| Decision Date | 17 February 1943 |
| Docket Number | No. 31481.,31481. |
| Citation | 8 N.W.2d 192,142 Neb. 835 |
| Court | Nebraska Supreme Court |
| Parties | PETER KIEWIT SONS' CO. v. NATIONAL CASUALTY CO. |
PETER KIEWIT SONS' CO.
v.
NATIONAL CASUALTY CO.
No. 31481.
Supreme Court of Nebraska.
Feb. 17, 1943.
Appeal from District Court, Douglas County; Sears, Judge.
Action by Peter Kiewit Sons' Co. against the National Casualty Co., surety on a bond, for certain obligations incurred by a contractor in the performance of a road construction contract made by and between the contractor and the State of Nebraska, and consisting of rental charges for contractor's equipment supplied by plaintiff, cost of transportation of equipment, and for supervisory services rendered by plaintiff. From a judgment in favor of the plaintiff, the defendant appeals.
Affirmed.
1. A bond, such as the one in suit, is a contract made for the benefit of the parties furnishing labor and materials in performance of the principal contract, and such persons have a right to sue thereon in their own names.
2. Where a construction contractor contracts with the department of roads and irrigation to construct a highway according to plans and specifications and furnishes bond therefor, and subsequently, due to disagreement with the department, said contractor, with the consent of the department, contracts to employ another contractor to have exclusive supervision and control over the job to complete it, and to furnish, in so doing, such equipment as may be needed and transportation of the same to and from the job, the contractor so employed may, after the work is completed, maintain suit against the surety, the contract being made for the benefit of a class to which he belongs, and recover for such items as labor and materials purchased under an agreement of hire or lease, in that all that is purchased is consumed in aid of the contract and constitutes labor and materials, within the meaning of section 52-118,, Comp.St.1929, and the bond given in conformity with such statute.
3. Bonds given under section 52-118, Comp.St.1929, are to be liberally construed to effectuate their purpose. The spirit and intent of the statute is to obligate a surety company to pay for material which is actually used in performing the contract. The statute is in its nature remedial.
[8 N.W.2d 193]
Swarr, May & Royce and James M. Paxson, all of Omaha, for appellant.
Crofoot, Fraser, Connolly & Stryker, of Omaha, for appellee.
Heard before SIMMONS, C. J., and ROSE, EBERLY, PAINE, CARTER, MESSMORE and YEAGER, JJ.
MESSMORE, Justice.
The plaintiff, construction contractors, brought this action against the National Casualty Company, surety on a bond, the conditions of which are hereafter set forth, for certain obligations incurred by the contractor, Roadmix Construction Company, in the performance of a road construction contract made by and between the Roadmix company and the state of Nebraska. The claims of the plaintiff against the surety involved in the action are for obligations owed by the Roadmix company to plaintiff, consisting of rental charges for contractor's equipment supplied by plaintiff, and used in carrying on the work of the contract; cost of transportation of the plaintiff's rented equipment to and from the job; a fee for supervisory services rendered by plaintiff in the performance of the job pursuant to contract between plaintiff and the Roadmix company. Jury waived, case tried to the court. The court found in favor of the plaintiff and awarded judgment for $6,311.69 and interest. Motion for a new trial overruled. The defendant appeals.
To eliminate confusion, the plaintiff will be hereinafter referred to as Kiewit, the National Casualty Company as surety, and the Roadmix Construction Company as Roadmix.
On June 11, 1938, the contract between Roadmix and the department of roads and irrigation was entered into. It provided in part as follows:
“Party of the second part (Roadmix) further agrees to pay all just claims for material, supplies, tools, machinery and labor, and all other just claims filed against him or any of his subcontractors in carrying out the provisions of this contract and further agrees that the contractor's bond shall be held to cover all such claims.” Roadmix “further agrees to perform the work under the direct supervision of the Department of Roads and Irrigation, subject to inspection at all times by the Secretary of Agriculture of the United States, or his authorized agents, and in accordance with the laws of the State of Nebraska.” The consideration was $40,964.09. Roadmix “agrees to construct in accordance with the plans and specifications,” etc., “being items numbered 23 and 24 of Group 11 and 25, 26, 27, 28, and 29 of Group 14, Federal Aid Secondary Project No. FAS-38-A(1), in Cherry County, Nebraska. ***”
“That it is mutually understood and agreed by parties hereto that the general and detailed plans, the Standard Specifications for Highway Construction” and the contractor's bond are a part of the contract.
The bond provided in part:
“Now therefore, if said Roadmix Construction Corporation as principal shall in all respects fulfill this said contract according to the terms and the tenor thereof, and shall faithfully discharge the duties and obligations therein assumed, then the above obligation is to be void ***; otherwise to be and remain in full force and virtue in law.
“It is expressly understood and agreed that this bond is given to secure and does secure not only the faithful performance by the principal herein named of said contract for the construction work as specified in said contract and in strict accordance with the terms of said contract and the plans and specifications made a part thereof; but that it is given to secure and does secure also the payment by the said bounden Roadmix Construction Corporation of all just claims for material, lubricants, oil and gasoline used or consumed in the construction of the work, and for the payment of all laborers and mechanics for all labor performed in the work either by any subcontractor or otherwise in conformity with the provisions of Section 52-118 of the 1929 Compiled Statutes of Nebraska, and if such payments be made then this obligation shall be null and void.”
Section 52-118, Comp.St.1929, is in part as follows: That public boards empowered
[8 N.W.2d 194]
by law to enter into a contract for the erecting, furnishing or repairing of a public improvement, and any officer so empowered by law to enter into such a contract, “to which the general provisions of the mechanics' lien laws do not apply, and where the mechanics and laborers have no lien to secure the payment of their wages and materialmen who furnish material for said work have no lien to secure payment for material furnished in said work, to take from the person, persons, firm or corporation to whom the contract is awarded a bond *** conditioned for the payment of all laborers and mechanics for labor that shall be performed and for the payment for material which is actually used in the erecting, furnishing, or repairing of the building or in performing the contract.”
The record discloses that difficulty arose with reference to the manner in which the terms of the contract were being performed by Roadmix, and it was to be terminated by the state. The president of Roadmix was familiar with the job, and his grading outfit was on the job, and Kiewit was asked to intercede with the highway department and work out something that would permit Roadmix to retain control and finish the job. A contract was entered into by and between Roadmix and Kiewit, in part, as follows:
Roadmix “agrees to and hereby does employ Peter Kiewit Sons' Co. to supervise all work in the further performance of the contract *** between” Roadmix and the department of roads.
“It is agreed that” Kiewit “shall have the exclusive and complete control of all work in the further performance of the contract, without interference by Roadmix.” Roadmix “agrees to do, as directed by” Kiewit “any and all things necessary to the performance of the work under said contract in accordance with the purposes and terms of this Agreement.” The contract also provided for diligent prosecution of the work by Kiewit, and Roadmix “agrees further to furnish and provide any and all funds necessary for the completed performance of said contract and this Agreement over and above the estimates paid on same.”
“It is agreed that the wages of $65 per week of the Superintendent provided by” Kiewit “and all foremen's wages, shall be included and considered as a part of the cost of work and paid by” Roadmix. Roadmix “further agrees to pay for the gas and oil necessary in the operation of the Superintendent's car.” Kiewit “is to furnish all other necessary supervision without expense to Roadmix Construction Company.”
“It is agreed further that any equipment furnished by” Kiewit “for use in the performance of the work, shall be paid for monthly at a fair rental value agreed upon before the equipment is moved on to the job. It is agreed further that Roadmix Construction Company should pay for the transportation of all equipment furnished by” Kiewit “to and from the job.”
The contract had an addenda, signed by the parties, listing the work done prior to September 1, 1938, in a total amount of $10,786.77. Acting under and pursuant to the terms of the contract with Roadmix, Kiewit took over the job and supervision thereof. If there is liability on the part of the surety, then the evidence and accounting with reference thereto may be considered.
The defendant claims that by the terms of the bond it is a statutory bond, written in conformity with section 52-118, Comp.St.1929, and defendant's position is best reflected by the following cases:
Iddings Co. v. Lincoln Construction Co., 104 Neb. 124, 175 N.W. 643, is cited. The part thereof to which defendant directs our attention is contained in the opinion, reading: “The bond sued upon was given in conformity with section 3840, Rev.St.1913. It follows that the parties to this litigation executed and...
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