Pidgeon Thomas Iron Co. v. Leflore County

• Decision Date: 21 April 1924
• Docket Number: 23987
• Citation: 99 So. 677,135 Miss. 155
• Court: Mississippi Supreme Court
• Parties: PIDGEON THOMAS IRON CO. v. LEFLORE COUNTY et al. [*]

99 So. 677

135 Miss. 155

PIDGEON THOMAS IRON CO. v. LEFLORE COUNTY et al. ^[*]

No. 23987

Supreme Court of Mississippi

April 21, 1924

Division B

January 1, 1920

1 COUNTIES. County, political subdivision of state; in absence of statute county not liable for negligence of its officers.

A county is a political subdivision of the state, and, in the absence of a statute imposing liability therefor, it is not liable for the negligence of its officers.

2 COUNTIES. County not liable for failure to require bond protecting laborers and materialmen.

Chapter 217, Laws of 1918, which requires any contractor engaged in construction work for a county to execute a formal performance bond, with an additional obligation for the protection of laborers and materialmen, does not impose any liability on such county, either expressly or by necessary implication, for the negligence of its officers in failing to require such bond.

3. COUNTIES. Failure of board of supervisors to require bond does not render individual members liable for claims of laborers or materialmen.

The failure of a board of supervisors to comply with a statute directing the taking of a bond from a contractor for public work, conditioned for the payment of all indebtedness for labor and material, upon which bond any person to whom there is due any sum for labor or material furnished may bring an action, does not render the members of such board individually liable for the payment of the claims of laborers or materialmen.

4 COUNTIES. Surety on bond submitted with bid not liable to laborers and materialmen.

Where a bidder for public work for a county submitted with his bid a bond conditioned that, in the event the contract was awarded to such bidder, he would execute a formal contract and a bond for the performance of the terms and conditions thereof, the surety on such bond did not become liable for the payment of claims for labor and material furnished for the work, where the county permitted the contractor to enter upon and complete the work without requiring the execution of a formal contract or a bond for the protection of laborers and materialmen as required by chapter 217, Laws of 1918.

HON. C L. LOMAX, Chancellor.

APPEAL from Leflore chancery court, HON. C. L. LOMAX, Chancellor.

Suit by the Pidgeon Thomas Iron Company against Leflore county and others. From a decree sustaining demurrers to the bill of complaint, plaintiff appeals. Affirmed.

Decree affirmed.

Gardner & Gardner, for appellant.

The surety company is liable, for the reason that the condition of the "bidder's bond" which was made by the surety company, and which was the inducement for the acceptance of the bid of the Larimer & Burgett Bridge Company, has never been complied with. It will be noticed that the condition is, that in the event the contract is awarded to the principal--which was done--the principal, the bridge company, would execute and enter into a formal contract within the time required--which it did--and "furnish good and sufficient surety to secure the performance of the terms and conditions of the contract" which it never did, and this is the breach that we say makes the surety company liable for the damages which appellant sustained, by reason of the failure on the part of the bridge company to give the security required by the statute.

The surety company is not in a position to take advantage of the failure to be notified after this bond was not given by the bridge company. It was the duty of the surety company to follow up its obligation and see that the terms of the bond were carried out, that is to say, that the bond was given, and having failed to do this, it is now, estopped from denying liability.

In case of ambiguity, or doubtful construction, the bond should be construed in the light of circumstances surrounding the execution thereof, the object to be accomplished, the situation of the parties and the relations existing between them. 9 C. J., page 33; 84 C. C. A. 630, 61 So. 642. The nature of the duty of the obligor and the character of the obligee must also be regarded as explanatory of the intent. 74 Am. Dec. 541.

The law at the time of the execution of this bond is a part of it just as much so as if it had been inserted in it, and if the law gives the bond a certain legal effect, it is as much a part of the bond as if its terms were incorporated therein. Chapter 217, Laws of 1918 (this statute), when this "bidder's bond" was made, entered into and became a part of the contract, or obligation assumed by the surety company in the execution of the "bidder's bond," just as much so as if incorporated in terms therein. 9 C. J., page 34; 30 S.E. 67; 134 S.W. 951; 108 S.W. 548; 20 So. 587.

Building and Construction Contracts. The general rules governing the rights, duties and liabilities of sureties in other cases apply to sureties on a builder's bond, the sureties being bound only where their promise is supported by a sufficient consideration, and only in the manner and to the extent provided in the obligation as construed together with other instruments to which it refers; and where the language of the bond is that selected by the surety, it must be given the strongest interpretation which it will reasonably bear in favor of the insured. 163 S.W. 1171.

Mechanics and materialmen have a lien for which they have a right to sue on the bond given the county. Laws 1918, ch. 128; Hemingway's Supplement, sec. 2434; 15 C. J. 558, 15 C. J. 561, sec. 263, also sec. 254; American Surety Co. v. Huey, 191 S.W. 617.

Liability of Leflore County. We have some doubt as to whether or not Leflore county, or the members of the board of supervisors, officially or individually, are liable, but, we are going to give the court the benefit of our investigation, and submit the matter. In many states it is held that the failure to give the bond renders the county and its officers liable to the materialmen. 15 C. J., page 559, sec. 254; 97 Minn. 487, 107 N.W. 560, 115 Tenn. 639, 91 S.W. 1011; 22 Wash. 106, 60 P. 139; 171 N.C. 551; 142 Mich. 637; 67 Mich. 43; 158 Mich. 678; 105 Tenn. 581; 72 Mich. 295; 15 Corpus Juris, 558.

Pollard & Hammer, Means Johnston, and Wm. M. Hall, for appellees.

I. The bond inures only to the named obligee: Scott v. Alton Banking & Trust Company, 175 S.W. 920; Birckhead v. Brown, 5 Hill (N. Y.) 634. Numerous other cases along the same lines are grouped in note in 1 A. L. R., pages 866 to 870, inclusive, under the subhead Special Guaranty, See also 9 C. J. 85. We submit, therefore, that Leflore county, or more strictly speaking, the board of supervisors of Leflore county, the obligee named in the bond, is the only board or group who could have demanded anything of the bond company by reason of the execution of the bidder's bond; that neither the appellant here, nor any other materialman or laborer, had anything to do with the bidder's bond, and obtained no rights under it.

II. No notice was given to the bond company that the bridge company had been awarded the contract, and no contractor's bond was demanded of the bond company. To bind the bond company, even to Leflore county, notice by Leflore county should have been given that its guaranty was accepted and that its principal had been awarded the contract. The bidder's bond, at best, was simply an offer of guaranty, and a surety can never be held beyond the terms of his engagement, and every guarantor has a right to stand on the strict terms of his obligation. Davis v. Wells Fargo & Company, 26 L.Ed. 688; Russell v. Clark, 7 Cranch 69; Davis Sewing Machine Company v. Richardson, 29 L.Ed. 480. See also note on Conditional Guaranty, 16 L. R. A. (N. S.), page 367; German Savings Bank v. Drake Roofing Company, 84 A. S. R. 337; Note 105 A. S. R., page 513 and 514; Montgomery v. Kellogg, 43 Miss. 492; Ellis v. Jones, 70 Miss. 61.

III. A materialman acts at his peril if he fails to ascertain if a contractor's bond for his protection is in existence: Woodward Lumber Company v. Grantville, 79 S.E. 221, cited in Ann Cas. 1917B, 1090; Bushnell v. Haynes, 156 P. 343; Blanchard v. Burns, 49 L. R. A. (N. S.) 1201.

We submit in conclusion that by no process of reasoning can we conceive that any liability can attach to the bond company for a failure on the part of the board of supervisors to do their official duty, and by no process of reasoning or construction of the statute can we conceive that the surety on a bidder's bond can be held liable on a claim which could only be asserted on a contractor's bond which was never executed.

Means Johnston, for appellants, in reply.

I. The general rule is that a county, in the absence of express statutory provisions is not liable for torts and negligence in the condition, use, and management of public institutions. Mary Davies v. County, 1916B. L. R. A. 1261, and note; Jefferson County v. Grafton, 74 Miss. 435, 21 So. 247, 60 A. S. R. 516, and 36 L. R. A. 798; Brabham v. Board of Supervisors Hinds County, 54 Miss. 363.

II. A county can have no liability, except as authorized expressly, or by necessary implication, by some statute. Counties are political subdivisions of the state, created for convenience. They are not corporations with the right to sue and be sued as an incident to their being, but are quasi-corporations, invested by statute with certain powers, and subject to certain liabilities, and can neither sue nor be sued, except as authorized by statute. The right to maintain a suit like this is not only outside of the contemplation of the statute, but is opposed by every consideration of public policy. Nugent et al. v. Board Miss. Levee Commissioners, 58 Miss. 197; Redditt v. Wall, 53 So. 45, 34 L. R. A. (N. S.) 152; Harrison County v. Marione, 110 Miss....