Reiff v. Redfield School Board

• Decision Date: 18 December 1916
• Docket Number: 49
• Citation: 191 S.W. 16,126 Ark. 474
• Parties: REIFF v. REDFIELD SCHOOL BOARD
• Court: Arkansas Supreme Court

191 S.W. 16

126 Ark. 474

REIFF v. REDFIELD SCHOOL BOARD

No. 49

Supreme Court of Arkansas

December 18, 1916

Appeal from Pulaski Chancery Court; Jno. E. Martineau, Chancellor affirmed.

Decree affirmed.

Carmichael Brooks, Powers & Rector, for appellants.

1. The bond was not given as required by Act No. 446, Acts 1911, p 462. The bond was to the Redfield School District; the bondsmen did not qualify; the sureties were not approved by the clerk nor was the bond filed according to law. It does not contain the proper recitals. There can be no recovery. 86 Ark. 212; 17 Id. 483; 79 Id. 550; 74 Id. 545; 81 Id. 235; 100 Id. 253; 109 Id. 508; 111 Id. 379; 126 Am. St. 1095.

2. The Redfield School District sustained no injury. 65 Ark. 27.

3. Defendants are bound only according to the terms of the bond. 60 C. C. A. 623; 79 Ark. 530.

4. There was no liability unless the material and labor went into and became part of the improvement. Kirby's Digest § 4970; Act 446, Acts 1911; 85 Ark. 158.

Mehaffy, Reid & Mehaffy, for appellee.

1. The fact that the bond was made to the school district instead of the State is not material. The object of the bond was to guarantee the performance of the contract. 8 Neb. 344; 1 N.W. 243, 347; 17 Wend. 67; 26 Id. 502; 27 N.W. 233; 52 Id. 567-8; 64 Id. 1050; 32 P. 466; 51 Ark. 205; 10 Id. 89; 128 P. 266. The bond was not void but was available to anyone sustaining injury. 17 Wend. 67; 26 Id. 502; 25 Ky. 472; 84 F. 114.

2. School directors are public officers. 81 S.W. 1237; 88 Id. 1; 79 N.E. 481; 84 Ark. 540; 87 S.W. 941; 49 Id. 705; 77 Va. 518; 22 P. 628. The bond was intended to secure all materialmen. 86 Ark. 212; Acts 1911, p. 464, § 3. No statutory bond is void for want of form. Kirby's Digest, § 6368.

3. The materialmen have the right to sue on the bond. 111 Ark. 373; 115 N.W. 811; 117 S.W. 611; 126 Id. 530; 159 Ill.App. 139; 134 S.W. 18; 32 P. 466; 53 N.E. 793; 21 N.W. 83; 56 N.E. 680; 46 S.W. 625; 6 Cyc. 83; 168 S.W. 61; 42 S.E. 858; 105 N.W. 319; 160 S.W. 270; 151 N.W. 942; 138 N.W. 102.

OPINION

HART, J.

On February 19, 1915, the Board of Directors of Redfield School District and the Clark Pressed Brick Company, of Malvern, Arkansas, instituted this action in the chancery court against the Aetna Accident & Liability Company, J. W. Sanders and H. F. Reiff, to recover $ 527.56 and the accrued interest alleged to be the balance due for 85,000 bricks that were used in the construction of a school house by said school board. The material facts are as follows:

On the 27th day of June, 1914, the Redfield School Board of Redfield, Arkansas, entered into a contract in writing with S. A. Sanders to erect a school building for the district for the consideration of $ 6,100.00 to be paid him by the district. The contract contained plans and specifications as to the manner of the performance of the work, but inasmuch as none of its provisions, except article 5, have any bearing on the issues raised by the appeal we need only refer to that article.

Article 5 provided, in substance, that should the contractor at any time fail in any respect to prosecute the work with diligence or fail in the performance of any of the agreements of the contract, upon such neglect or failure being certified by the architect, the owner shall have the right after three days written notice given, to terminate the employment of the contractor and take possession of the premises for the purpose of completing the work and may employ any other persons to finish the work and provide the materials therefor. Sanders entered into a bond in the sum of $ 12,500.00 with J. W. Sanders, H. F. Reiff and the Aetna Accident & Liability Company as his sureties, payable to the Redfield School Board for the faithful performance of the contract. One of the conditions of the bond was that S. A. Sanders should faithfully and promptly perform and keep all the conditions and agreements contained in the contract and should pay for all labor and materials for same.

S. A. Sanders, the contractor, died September 12, 1914, before the school house was finished. The work on the building ceased after his death and the school board gave written notice to his sureties of that fact and notified them that within three days from that date the board would take possession of the building and complete it according to the terms of its contract with Sanders. At the expiration of three days, the board took possession of the building and completed it according to the terms of the contract. It was proved that the Clark Pressed Brick Company, of Malvern, Arkansas, had shipped to the contractor 85,000 brick to be used in the construction of the school house and that all of these brick went into the construction of the building except about 11,000; that of these, 4,000 were used in another school house and that 7,000 were sold for $ 42.00 at the instance of the agent of the Aetna Accident & Liability Company; that there was $ 527.56 and the accrued interest due the brick company.

The chancellor found that all the bricks furnished went into the building except 11,000, and that there was due the Clark Pressed Brick Company $ 527.56 with $ 46.44 interest; that the Aetna Accident & Liability Company is liable for 7,000 of the brick which were sold by reason of having authorized and directed the sale of said brick, but that as to the 4,000 brick which were not sold, and which were not used in the construction of the building, that neither of the defendants were liable. A decree was entered in accordance with the findings of the chancellor and the case is here on appeal.

The defendant Reiff was engaged in the lumber business and furnished lumber to the contractor to be used in the construction of the school house in question, and procured the Aetna Accident & Liability Company to sign the bond and agreed to indemnify it from all losses thereunder. He signed the bond as surety because he was interested in the contract to the extent that he was furnishing the contractor the material that went into the school house.

The correctness of the decision of the chancellor holding the sureties liable depends upon whether or not the bond was executed pursuant to Act 446 of the Acts of 1911 and the construction to be given thereto. See General Acts of 1911, p. 462. Section 2 of the Act reads as follows:

"Section 2. Public Officers--Whenever any public officer shall, under the laws of this State, enter into a contract in any sum exceeding one hundred dollars, with any person or persons, for the purpose of making any public improvements, or constructing any public building, or making any repairs on the same, such officer shall take from the party contracted with, a bond with good and sufficient sureties to the State of Arkansas, in a sum not less than double the sum total of the contract whose qualifications shall be verified, and such sureties shall be approved by the clerk of the circuit court in the county in which the property is situated, conditioned that such contractor, or contractors shall pay all indebtedness for labor and material, furnished in the construction of said public building, or in making said public improvements."

In the absence of a statute the right to sue on a public contractor's bond given to the owner of the property for labor and material furnished is dependent entirely on the terms of the bond. Without some provision promising to pay the laborers and materialmen, an action cannot be maintained. This is the effect of our decision in Eureka Stone Co. v. First Christian Church, 86 Ark. 212, and Russellville Water & Light Co. v. Sauerman, 109 Ark. 501, 161 S.W. 502. On the other hand where a bond is executed pursuant to the statute providing that a contractor's bond given thereunder for the faithful performance of public work shall inure to the benefit of those furnishing labor and materials, it is well settled that an action may be maintained thereon by one of such persons to recover for services rendered or material supplied in the fulfillment of the contract. Case note to Ann. Cas. 1916 A, at p. 761, and many cases from quite a number of states are cited.

In such cases the purposes contemplated by the legislative requirement, as to the bond to be given, are not merely to secure the public in respect to the accomplishment of the work contracted for, but it is also intended to secure or protect those doing labor or supplying materials for the contractors, even though there may be no responsibility on the part of the public agency to them. It is contended by counsel for the defendants that the bond in question was not executed pursuant to the statute above quoted, but we cannot agree with counsel in this contention. It will be noted that the statute requires that the bond be "conditioned that such contractor, or contractors shall pay all indebtedness for labor and material furnished in the construction of said public building, or in making said public improvements." One of the conditions of the bond is that "they (referring to principal and sureties) will pay for all labor and materials for the building."

The undertaking of the bond follows the statute and we are clearly of the opinion that it was the intention of the parties to execute a bond in compliance with the terms of the statute. The bond was filed in the office of the clerk of the circuit court in the county where the school house was to be erected and was approved by him. It is also insisted that the board of school directors are not public officers within the meaning of the statute but in the case of A. H. Andrews Co. v. Delight Special School District, 95 Ark 26, 128 S.W. 361, it was held that school directors are public officers and that the rules respecting their powers are the...