Smith v. Bowman

• Decision Date: 15 January 1907
• Docket Number: 1785
• Citation: 32 Utah 33,88 P. 687
• Court: Utah Supreme Court
• Parties: SMITH v. BOWMAN et al

88 P. 687

32 Utah 33

SMITH v. BOWMAN et al

No. 1785

Supreme Court of Utah

January 15, 1907

APPEAL from District Court, Third District; T. D. Lewis, Judge.

Action by F. P. Smith against J. H. Bowman and others. Plaintiff appeals from the judgment.

AFFIRMED.

Everard Bierer for appellant.

APPELLANT'S POINTS.

"Where a promise or contract has been made between two parties for the benefit of a third person, an action will lie thereon at the instance and in the name of the party to be benefited although the promise or contract was made without his knowledge and without any consideration moving from him." (Bakerv. Bryan, 64 Ia. 261, 21 N.W. 83; Lumber Co.v. School District [Iowa], 90 N.W. 504; Jordanv. Kavanaugh, 63 Ia. 152, 18 N.W. 851; Williamsv. Markland, 15 Ind.App. 669; 44 N.E. 562; St. Louisv. Von Phul, 133 Mo. 561 34 S.W. 844; Deversv. Howard, 144 Mo. 671, 46 S.W. 625; Lymanv. Lincoln, 38 Neb. 794, 57 N.W. 531; Samplev. Hale, 34 Neb. 220, 51 N.W. 837; Plumbing & Heating Co.v. McClay, 43 Neb. 649, 62 N.W. 531; Knappv. Swaney, 56 Mich. 349, 23 N.W 162; Metal Worksv. Dodge, 129 Cal. 390, 62 P. 41; Surety Co.v. Cement Co., 9 Kan. App. 8, 57 P. 237.)

Henderson, Pierce, Critchlow & Barrette and Dye & Stephens for respondents.

RESPONDENT'S POINTS.

In Spalding Lumber Co.v. Brown (Ill.), 49 N.E. 725, the court held that sureties on a contractor's bond conditioned that the contractor "shall only perform said contract, and all the covenants and agreements therein contained, and shall pay and discharge from said premises all liens for material, labor or otherwise which may accrue on account of said building contract" are not liable for the contractor's failure to pay subcontractors, who have no lien on the building. (2 Brandt on Suretyship (3 Ed.), sec. 748.) Nothing is clearer both upon principle and authority, than the doctrine that the liability of a surety is not to be extended by implication beyond the terms of the contract. (Coughranv. Bigelow, 9 Utah 260, 266, and cases cited; Victor S. M. Co.v. Crockwell, 2 Utah 557.) It is questionable whether the trustees had authority beyond the powers expressly authorized by law to extend the obligation to include third parties as obligees, or to add conditions additional to those specified in the statute. That they had no such authority has received judicial sanction. (Breenv. Kelly, 45 Minn. 532, 47 N.W. 1067; Park B. & Co.v. Sykes, 67 Minn. 153, 69 N.W. 712; Beckerv. Keokuk, 79 Iowa 419, 44 N.W. 694; 2 Brandt on Sur. [3 Ed.], sec. 617; Board of Educationv. Grant, 64 N.W. 1050, and cases cited. Superadded conditions regarded as surplusage. 27 Am. & Eng. Enc. Law [2 Ed.], 540, notes and cases.)

What is said above with reference to contracts generally, applies with peculiar force in the case of a contract of suretyship. A surety is said to be a favorite in law. He gets no value received for his accommodation; he helps along business. True, he cannot for those reasons evade his express promise, but beyond the exact and express promise so made he is not liable either by implication or construction or interpretation. As stated in the books, his liability is strictissimi juris. Applying that rule in this case, it becomes easy to see where appellant is seeking to hold sureties in this case beyond the strict letter of their bond. (1 Brandt on Suretyship, sec. 93; Coughranv. Biglow, 9 Utah 261; Cadenassov. Antonelle, 127 Cal. 382.)

The cases in the first two subdivisions below go further than we need to go in order to establish our position. In each of those cases, in spite of the fact that there was a promise, either in the bond or the building contract, or both, that materialmen should be paid for their material, still, for reasons announced in the several opinions, it was held that there was no cause of action in favor of materialmen against sureties on the bond. The cases in the third subdivision below are entirely analogous to the case before us, and, because they each disclose facts upon which an issue similar to the one in this case is raised, are convincing authority in this case.

(1) Where there is an express agreement in the building contract that the contractor shall pay all materialmen and laborers, and the bond undertakes to assure the faithful performance of the building contract. (Electric Appliance Co.v. Fidelity & Guaranty Company [Wis.], 53 L. R. A. 609; Parkerv. Jeffery [Ore.], 37 P. 712; Lumber Co.v. Miller [Ore.], 43 P. 659.

(2) Where there is an express promise in the bond; that is, in the obligation thereof, that the sureties will see that materialmen and laborers dealing with the contractor shall be paid, but where there is no such promise in the building contract. (Breenv. Kelly [Minn.], 47 N.W. 1067; Searsv. Williams [Wash,], 37 P. 665; 38 P. 135 [Rehearing].)

(3) Where there is no agreement in the building contract that the contractor shall pay materialmen or laborers, and no obligation in the bond binding the sureties to see them paid; but where such payment was merely a condition in the bond, or where there was some other feature in bond or contract upon which materialmen sought to base claims against sureties. (Townsendv. Cleveland Fire-proofing Co. [Ind.], 47 N.E. 707; Bldg. Co.v. Wilson [Mich.], 67 N.W. 125 [discussing Knappv. Swaney]; Huntv. King [Iowa], 66 N.W. 71; Wellerv. Goble [Iowa], 23 N.W. 290; Lumber & Ice Co.v. Parker [Ind.], 65 N.E. 747; Hartv. State, 21 N.E. 654; Montgomeryv. Rief, 15 Utah 495.)

STRAUP, J. McCARTY, C. J., and FRICK, J., concur.

OPINION

STRAUP, J.

The State Agricultural College of Utah entered into a contract with the defendants, Bowman and Hodder, for the construction of a college building. The contract, so far as material, provided that the contractors should furnish all material and labor necessary to construct the building, and complete the same in workmanship satisfactory to the architect, and in accordance with plans and specifications. The college agreed to pay eighty-five per cent of the value of the work as it progressed and as it was incorporated into the building. The remaining fifteen per cent was made payable upon the acceptance of the building by the trustees, providing, among other things, that the building was "free from all liens or right of liens for debts due for claimed to be due from the contractors, and satisfactory evidence thereof furnished to the owner." To secure the faithful performance of the contract, the contractors furnished a bond signed by the defendants Wilson and McGurrin, which, so far as material, bound them "unto the State Agricultural College as well as to all persons who may become entitled to liens under the contract (hereto attached) in the sum of $ 22,000 to be paid to the said agricultural college and to said parties who may be entitled to liens;" and provided that "the condition of this obligation is such that if the above bounden Bowman, Hodder & Co. shall in all things stand to and abide by, and well and truly keep and perform the covenants and agreements in the hereto attached contract," entered into between the said college and Bowman, Hodder & Co., "and shall duly and promptly pay and discharge all indebtedness that may be incurred by the said Bowman, Hodder & Co. in carrying out the said contract, and complete the same, free of all mechanics' liens, and shall truly keep and perform the covenants, conditions and agreements in said contract and in the within instrument contained, on his part to be kept and performed, at the time and in the manner and form therein specified, as well as all costs, including attorney's fees, in enforcing the payment and collection of any and all indebtedness incurred by said Bowman, Hodder & Co. in carrying out said contract, then the above obligation shall be void; else to remain in full force and virtue. This bond is made for the use and benefit of all persons who may become entitled to liens under the said contract, according to the provisions of law in such cases made and provided, and may be sued upon by them as if executed to them in proper person." The plaintiff and his assignor furnished material to the contractors which was used by them in the construction of the building. A part of the material so furnished remained unpaid. This suit was thereupon brought by plaintiff against Bowman, Hodder & Co. and against Wilson and McGurrin, their sureties, to recover payment for such unpaid material. The complaint substantially contained the foregoing facts. No defense was made by Bowman, Hodder & Co. At the trial the defendants Wilson and McGurrin objected to the introduction of any evidence, on the ground that the complaint stated no cause of action against them. The objection was sustained by the court, and judgment was thereupon entered in favor of plaintiff and against the contractors, but not against Wilson or McGurrin. From this judgment plaintiff appeals.

It is contended by the appellant that Wilson and McGurrin, by the execution of the bond, undertook, not only to benefit the agricultural college but also intended to benefit other persons of which plaintiff is one, and that such intention is apparent upon the face of the bond, and therefore plaintiff is entitled to maintain this action against them. On the contrary, it is asserted by respondents that no such intention is indicated by the terms of the bond, that the bond was given only for the benefit of the agricultural college and those who may be entitled to liens, and that the plaintiff has not brought himself within the class entitled to liens, and therefore he cannot maintain the action against them. By statute it is expressly provided that the provision of the mechanic's lien statute does not apply to a public building, structure, or improvement. (Section 1399, Re v....