Rust v. U.S. Fidelity & Guar. Co.

• Decision Date: 31 August 1915
• Docket Number: 12119.
• Citation: Rust v. U.S. Fidelity & Guar. Co., 151 P. 248, 87 Wash. 93 (Wash. 1915)
• Court: Washington Supreme Court
• Parties: RUST v. UNITED STATES FIDELITY & GUARANTY CO.

151 P. 248

87 Wash. 93

RUST v. UNITED STATES FIDELITY & GUARANTY CO.

No. 12119.

Supreme Court of Washington

August 31, 1915

Department 2. Appeal from Superior Court, Pierce County; E. M. Card Judge.

Action by W. R. Rust against the United States Fidelity & Guaranty Company. Judgment for plaintiff, and defendant appeals. Reversed, with direction to dismiss the action.

Huffer & Hayden, of Tacoma, for appellant.

Fogg &amp Fogg, of Tacoma, for respondent.

PER CURIAM.

In January, 1912, the McDermott & Carmody Contracting Company entered into a contract with the respondent, Rust, to construct for him a tunnel at Ruston, Pierce county. The contract required the contractors to 'furnish and provide in sufficient numbers * * * all things that may be necessary or requisite for constructing and completing' the work within a certain time, and to give a bond conditioned 'for the payment of all liens, claims, and other sums of money, and for the true and faithful performance and compliance with all and singular the terms and provisions of * * * this contract.' Pursuant to the contract the contractors, as principal, and the appellant, as surety executed a joint and several bond conditioned for the faithful performance of the contract; the bond among other things reciting:

'Now the condition of the foregoing obligation is such that if said above-named principal shall well and truly keep and perform all the conditions and covenants of this contract on its part to be kept and performed, and shall indemnify and save harmless the said W. R. Rust as therein stipulated, then this obligation shall be of no effect, but otherwise it shall remain in full force and effect.'

Some time in March the contractors commenced the prosecution of the work under the contract, and continued therein until August 9th, when they abandoned the work because of financial difficulties, leaving unpaid a number of bills for materials used therein. The respondent thereupon took over and completed the contract, and thereafter began this action against the surety company to recover damages for defective work by the contractors, for demurrage for delay, and for the amount of the bills left unpaid by the contractors. The claims for damages and demurrage were settled before trial leaving in issue only the demand for the amount of the unpaid bills. The case was tried before the court without a jury, and resulted in a finding of the amount of the bills, a conclusion of law that respondent was entitled to maintain the action for the use and benefit of the creditors, and a judgment in respondent's favor for the use and benefit of the creditors for the amounts found due them.

From this judgment the surety on the bond has appealed.

From the view we take of the case, but one question raised by the appeal need be considered--the right of respondent to maintain the action for the benefit of the creditors. No liens had been filed by the creditors prior to the institution of this action, and it appears that the time within which liens could be filed by them has elapsed. Respondent has not been damaged in any manner by the nonpayment of these debts, and, the time for filing liens having elapsed, there is no contention that he will be so damaged in the future. There is, therefore, no ground upon which the judgment can be sustained as an indemnity for respondent, but he contends that the bond was both an indemnity and a guaranty bond, given, first, to indemnify him, and, second, to secure the performance of the conditions of the contract, one of which was the payment of all bills for material.

While the contract did not expressly provide that the contractors should pay all bills incurred in the prosecution of the work we have held that an agreement to furnish materials includes an...