R.L. Snelson & Co. v. R.G. Hill & Co.
| Decision Date | 09 January 1929 |
| Docket Number | 593. |
| Citation | 146 S.E. 135,196 N.C. 494 |
| Parties | R. L. SNELSON & CO. v. R. G. HILL & CO. et al. |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Swain County; J. H. Harwood, Special Judge.
Suit by R. L. Snelson & Co. against R. G. Hill & Co., the Southern Surety Company and others, in which the East Tennessee National Bank intervened. Judgment for plaintiff, and intervener and the Southern Surety Company appeal. Affirmed as modified. Civil action by creditors (general creditors' bill) to recover for materials furnished the contractor and labor performed in and about the construction of a highway in Swain county, and to hold the surety on the contractor's bond liable for the payment of said claims. Certain interveners also assert the right to enforce their claims against the surety on said bond. The general fact situation may be stated as follows:
(1) On June 29, 1925, R. G. Hill & Co., contractor, entered into a written agreement with the highway commission of Forney Creek township (Swain county) for the construction of a highway known as "projects 3 and 4," in which contract it was stipulated, among other things, that "the contractor shall and will provide and furnish all the materials machinery, implements, appliances and tools, and perform the work and labor required to construct and complete projects 3 and 4 located in Swain county *** according to the proposal, plans and specifications prepared by said commission," etc.
(2) In pursuance of its duty under C. S. § 2445, as amended (Pub. Laws 1923, c. 100), and for a valuable consideration, the Forney Creek highway commission, on June 29, 1925, took from the contractor, as principal, and the Southern Surety Company, as surety, a bond in the sum of $136,252.75 in for the faithful performance of said contract; the condition of the bond being "that if the above bounden principal, as contractor, shall in all respects comply with the terms of the contract and conditions of said contract, and his, their, or its obligations thereunder, including the specifications and plans there referred to and made a part thereof, and such alterations as may be made in said specifications and plans as therein provided for, and shall well and truly and in a manner satisfactory to the consulting highway engineer, complete the work contracted for, and shall save harmless the highway commission of Forney Creek road district of Swain county, North Carolina, from any expense incurred through the failure of said contractor, or his, their or its servants, and from any liability for payment of wages or salaries due or material furnished said contractor, and shall well and truly pay all and every person furnishing material or performing labor in and about the construction of said roadway all and every sum or sums of money due him, them or any of them, for all such labor and materials for which the contractor is liable, *** then this obligation shall be void; otherwise, to be and remain in full force and virtue."
(3) After working upon said projects for a little more than a year, the contractor failed, breached its contract, and quit the work long before its completion, and the same was taken over and finished by the Southern Surety Company.
(4) The contractor, at the time of its failure, was indebted to a large number of persons and firms for and on account of labor performed and materials furnished and used in and about the construction of said highway.
(5) This suit was instituted under C. S. § 2445 (as amended) by laborers and materialmen to recover on the bond given by the contractor. Others intervened, and also asserted their claims against said bond.
A reference was had under the statute, which resulted in a satisfactory adjustment of most of the claims. But the East Tennessee National Bank appeals from the disallowance of its claim, while the Southern Surety Company appeals from so much of the judgment as relates to the claims of Bryson City Bank, R. L. Tulloh, D. S. Hill, and W. J. Savage & Co.
Bryson & Bryson and S.W. Black, all of Bryson City, for appellant East Tennessee National Bank.
Robert Ruark, of Raleigh, for appellant Southern Surety Co.
Edwards & Leatherwood, of Bryson City, for appellee Hill.
S. W. Black, of Bryson City, for appellees Bryson City Bank, Tulloh, and W. J. Savage & Co.
Appeal of Intervener, East Tennessee National Bank.
In January, 1926, the contractor, R. G. Hill & Co., borrowed from the East Tennessee National Bank the sum of $5,000, executing its promissory note as evidence thereof, a portion of which was used in paying laborers for work done in and about the construction of said highway. The balance of this loan was used for other purposes connected with the construction of said projects. No assignment was taken from any of the laborers or other persons receiving payment from these funds, and the note itself does not show for what purpose the money was loaned. The referee held that the loan of $5,000 made by the East Tennessee National Bank to the contractor was not covered by the bond in suit, and this ruling was approved by the judge of the superior court. The appeal of the intervener challenges the correctness of the conclusion reached.
The judgment...
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