Smiley v. State ex rel. Truax

• Decision Date: 18 November 1915
• Docket Number: No. 8810.,8810.
• Citation: 60 Ind.App. 507,110 N.E. 222
• Parties: SMILEY et al. v. STATE ex rel. TRUAX et al.
• Court: Indiana Appellate Court

60 Ind.App. 507

110 N.E. 222

SMILEY et al.

v.STATE ex rel. TRUAX et al.

No. 8810.

Appellate Court of Indiana, Division No. 2.

Nov. 18, 1915.

Appeal from Circuit Court, Morgan County; Nathan A. Whitaker, Judge.

Action by the State, on the relation of James Truax and another, against Milton T. Smiley and others. Judgment for plaintiffs, and defendants appeal. Affirmed.

Ira C. Batman, Robert G. Miller, and James W. Blair, all of Bloomington, Homer Elliott, of Spencer, and A. M. Bain, of Martinsville, for appellants. Willis Hickam and Hubert Hickam, both of Spencer, for appellees.

IBACH, P. J.

The substantial averments of the complaint and the court's special findings show the facts of this case to be as follows:

In the year 1909, upon a proper petition, the board of commissioners of Owen county, Ind., let a contract for the construction of a free gravel road in Wayne township in said county to appellant Smiley. He, together with his coappellants, as his sureties, executed a bond payable to the state of Indiana, conditioned that Smiley would construct the road according to the plans and specifications therefor, and according to the terms and conditions of his contract, and “pay all the debts incurred by him in building the road, including labor and material and for boarding laborers.” Soon after commencing the work Smiley became financially embarrassed, was unable to pay labor and coal bills, and, being unable to borrow, he issued time checks or orders to his laborers for work done on the road, and they sold them at 10 per cent. discount.

James Truax and Lester Truax, relators, partners as Truax & Son, purchased a number of these orders, and expected to be paid face value therefor. Since the laborers were required to discount their time orders, they refused to continue the work unless the contractors increased their wages to meet the discount. This was done, and the work proceeded.Truax & Son continued to purchase the orders directly from the laborers, and took an assignment to themselves in writing of each order purchased. Truax & Son also sold Smiley coal to the amount of $47.26 for crushing stone used in the construction of the road. After the purchase of the orders and furnishing the coal, and before the acceptance of the road by the commissioners, Truax & Son and Smiley ascertained the amount of the orders purchased by them to be $1,152.53, and that such sum was owing to them by Smiley. The accounting was reduced to writing, signed by Smiley, and by agreement filed by relators with the county auditor for payment when the road was completed, and was pending for adjustment when the road was accepted. The board found there was due, and Smiley was allowed, $1,814.11, but Smiley and his sureties objected to the payment of the bill of Truax & Son out of said fund.

The court found that there is due Truax & Son $1,143.41 principal, and $184.59 interest from the date of the orders-a total of $1,328. The court also finds that from January 1, 1907, to January 1, 1913, appellee James Truax was a member of the board of commissioners of Owen county, and participated in all the acts of the board relative to said pike, which was in his district and under his personal charge.

When the work was accepted, there was a shortage in the fund, and the relators brought this action against Smiley and his sureties on his bond. On such special finding the trial court stated his conclusions of law in appellees' favor, and rendered judgment accordingly.

The errors assigned for reversal present in different ways one main proposition for consideration: Do Truax & Son, upon the facts, come within the terms of the contractor's bond, either by its own terms or the statute under which it was given? The statute under which the bond here involved was given provides that the contractor “shall *** pay for any labor or material therefor that shall have been furnished either to him or to any subcontractor, agent, or superintendent under him.” Burns 1914, § 7723. The bond in suit provides that the contractor “shall promptly pay all debts incurred by him in the prosecution of said work, including labor, materials furnished,” etc.

[1] In arriving at the true intent of the parties to this bond, we are not warranted in looking to disconnected sentences merely, but we are required to consider the bond in its entirety, and consider it in connection with the contract to secure the performance of which the bond was executed. Thus considered, we think it is clear that the true intention of the parties to the bond was to secure the payment of all labor and material used in the building of the pike road mentioned in the contract. This is the only way that a laborer or materialman can be secured in the performance of...