Sherman Mach. & Iron Works v. Iverson Specialty Co.
| Decision Date | 23 April 1935 |
| Docket Number | Case Number: 24900 |
| Parties | SHERMAN MACHINE & IRON WORKS et al. v. IVERSON SPECIALTY CO. et al. |
| Court | Oklahoma Supreme Court |
¶0 1. MUNICIPAL CORPORATIONS - Liability on Statutory Bond Given by Contractor on Public Works - Bond Held Not Liable For Use of Equipment and Repairs to Same Furnished to Subcontractor.
In a suit by materialmen against the principal and surety on a statutory bond furnished pursuant to section 10983, O. S. 1931, insuring the payment of all indebtedness incurred for material and labor furnished in the making of a public improvement, recovery cannot be had on such a bond for the use of equipment and repairs to same which was furnished to the subcontractor.
2. SAME - Recovery of Interest on Claims For Labor and Material Furnished to Subcontractor.
In such a suit, laborers and materialmen furnishing labor and materials directly to a subcontractor and not to the original contractor may recover interest on their respective claims.
3. SAME - General Liability on Statutory Bond.
The bond provided for by section 10983, O. S. 1931, is liable for all material and labor furnished to the contractor or subcontractor, and used in or consumed in the course of the construction of the project.
Appeal from District Court, Oklahoma County; Sam Hooker, Judge.
Action by the Sherman Machine & Iron Works et al, against the Iverson Specialty Company et al. Judgment for defendants, and plaintiffs appeal. Affirmed in part and reversed in part.
Tomerlin, Chandler & Shelton, Richard W. Fowler, and John Swinford, for plaintiffs in error.
Stanley B. Catlett and B.B. Kerr, for defendants in error.
¶1 This is an appeal by transcript from the judgment of the district court of Oklahoma county, Okla., in an action filed by the plaintiffs, Sherman Machine & Iron Works, a corporation, and United States Fidelity & Guaranty Company, a corporation, against the defendants, Iverson Specialty Company, a corporation, et al., to determine the plaintiffs' liability on a certain statutory bond furnished by them, which insured the payment of all indebtedness for labor and materials furnished for the construction of a certain water supply system for the Oklahoma City Air Terminal. Judgment in the lower court was for the defendants, establishing all of their claims, and the plaintiffs have appealed. For convenience, the plaintiffs in error will be hereinafter referred to as plaintiffs, and the defendants in error as defendants, as they appeared in the lower court.
¶2 On or about the 26th day of January, 1931, Sherman Machine & Iron Works entered into a contract with the city of Oklahoma City whereby Sherman Machine & Iron Works was to construct a certain water supply system for the Oklahoma City Air Terminal. This contract, among other things, provided for the drilling of a deep water well. Pursuant to section 10983, O. S. 1931, the plaintiff Sherman Machine & Iron Works, as principal, and the plaintiff United States Fidelity & Guaranty Company, as surety, executed and delivered to the city of Oklahoma City a statutory bond in the sum of $9,970 insuring the payment of all indebtedness incurred for labor and material furnished in the making of the said public improvement.
¶3 Thereafter, Sherman Machine & Iron Works entered into a contract with the defendant Dulaney Bros. under the terms of which the said Dulaney Bros., as subcontractor, agreed to drill the well to a depth of 750 feet and to furnish the labor and material therefor in consideration of $3,100.
¶4 Thereafter, the said Dulaney Bros. entered upon the performance of the said contract and incurred debts for labor and material in the drilling of the well. On or about June 1, 1931, Dulaney Bros. violated their contract and abandoned the job, leaving claims for labor and materials used therein unpaid, and it was necessary for the plaintiff to complete the well.
¶5 While Dulaney Bros. were drilling the well the plaintiffs paid out large sums of money to laborers and materialmen who furnished labor and material to Dulaney Bros., which was incorporated, in said job, and after the taking over of the work by Sherman Machine & Iron Works, it paid out additional large sums for the completion of the said well so that the aggregate amounts so paid out by it, or which it obligated itself to pay, were largely in excess of the amount due Dulaney Bros. under subcontract.
¶6 Inasmuch as Dulaney Bros. did not pay a large part of the bills incurred by them for labor and material, several of the defendants who had furnished labor and material to Dulaney Bros. filed separate suits in the district court of Oklahoma county against Dulaney Bros., Sherman Machine & Iron Works, and the United States Fidelity & Guaranty Company upon these claims, and upon the statutory bond executed by Sherman Machine & Iron Works, as principal, and United States Fidelity & Guaranty Company, as surety. In order to have all of these claims adjudicated in one action, the principal and surety on the said bond, on September 29, 1931, filed their action against Dulaney Bros. and all of the defendants, setting up the facts hereinbefore set out, and asked that all parties having claims by reason of having furnished labor and material to Dulaney Bros. to be used on the job, be made parties defendant and be required to set up their claims, and that all of the suits theretofore filed be consolidated with this action, and all of the actions were consolidated on October 8, 1931.
¶7 Thereafter, the various claimants filed answers and cross-petitions setting up their claims, and the cause proceeded to trial. At the trial the court found from the evidence that Sherman Machine & Iron Works was not indebted to Dulaney Bros. on the subcontract, and that it had already advanced and paid out to Dulaney Bros., and for their account to laborers and materialmen furnishing labor and materials under the subcontract, sums of money in excess of any indebtedness due or that might be due and payable under the said subcontract to Dulaney Bros.
¶8 The court further found that certain defendants and cross-petitioners were not entitled to any judgment in the case, and then found that the remaining claimants were entitled to judgment against the plaintiffs upon the statutory bond furnished by them, in various amounts set forth in the journal entry of judgment. Plaintiffs filed their motion for new trial, alleging as error on the part of the court the same grounds as are set forth in the petition in error and as hereinafter set out. The motion for new trial was overruled, and the case appealed to this court.
¶9 Since the filing of this appeal, the judgments of the defendants Feenberg Supply Company and Reynolds & Rork, Inc., have been compromised and settled and stipulations have been filed with the clerk of this court dismissing this appeal as to these two parties.
¶10 There are three questions to be decided upon this appeal, and we will dispose of them in the order in which they appear in the specifications of error, as follows:
¶11 1. The plaintiffs contend that no recovery can be had upon such a statutory bond for rent for the use of equipment and repairs to such equipment.
¶12 The claims of...
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