Southern Sur. Co. v. Municipal Excavator Co.

• Decision Date: 25 July 1916
• Docket Number: 7342.
• Citation: 160 P. 617,61 Okla. 215
• Parties: SOUTHERN SURETY CO. v. MUNICIPAL EXCAVATOR CO. ET AL.
• Court: Oklahoma Supreme Court

160 P. 617

61 Okla. 215

SOUTHERN SURETY CO. v. MUNICIPAL EXCAVATOR CO. ET AL.

No. 7342.

Supreme Court of Oklahoma

July 25, 1916

Rehearing Denied Oct. 31, 1916.

Syllabus by the Court.

The allegations of a petition challenged by a general demurrer must be construed in connection with the exhibits attached to the petition.

A claim for rentals due for the use of certain trenching machines let to a contractor in charge of the construction of a waterworks system, for a municipal government, is not "labor and material furnished in the construction of such public improvement," and is not protected by the bond required by section 3881, Rev. L. 1910, and the surety on such bond is not liable for such indebtedness.

Commissioners' Opinion, Division No. 2. Error from District Court, Oklahoma County; John W. Hayson, Judge.

Action by the Municipal Excavator Company against the Southern Surety Company and another. Judgment for plaintiff, and the Surety Company brings error. Reversed and remanded, with directions.

E. C Stanard, J. H. Wahl, and C. H. Ennis, all of Shawnee, for plaintiff in error.

Twyford & Smith, of Oklahoma City, for defendants in error.

GALBRAITH C.

This cause was decided on demurrer in the court below. It was held that no cause of action was stated by the plaintiff, and judgment was rendered accordingly. The plaintiff brought action against the Southern Surety Company and Nick Peay upon a bond given in pursuance to sections 3881 and 3882 Rev. L. 1910. The allegations of the petition, so far as important to be noticed here, are: That the Southern Surety Company does a general bonding business throughout the state of Oklahoma. That Nick Peay, doing business under the name of Nick Peay Construction Company, as principal, and the Southern Surety Company, as surety, executed and filed with the clerk of the district court of McIntosh county a certain bond in writing, a copy of which is attached as "Exhibit A." That said bond was for the sum of $63,000 and recited that whereas the Nick Peay Construction Company had entered into a written contract with the city of Eufaula, Okl., for the construction of a sanitary sewer system and the further extension of the waterworks system, now, therefore, "if the said principal shall well and truly pay all indebtedness incurred for any and all labor and material, furnished in the construction of said extension in the performance of said contract, then this obligation to be null and void, otherwise to remain in full force and effect." That prior to making and filing the bond the plaintiff entered into a certain contract in writing with the defendant Nick Peay, conditioned for supplying and furnishing certain labor and material to be used in the execution of the terms of said contract of the said Nick Peay with the city of Eufaula. A copy of said contract was attached to the petition, and further alleged: "That the said Nick Peay, doing business as the Nick Peay Construction Company, became indebted to and incurred certain indebtedness with the plaintiff for work and material furnished by plaintiff to said Nick Peay in the construction of said sewer system and extension provided for and under the terms of the contract marked 'Exhibit C,' and to cover which indebtedness the said bond marked 'Exhibit ____' was made and filed by the defendants, and each of them. That the labor and material furnished by plaintiff to said defendant aforesaid was under and by virtue of the said subcontract hereto attached marked 'Exhibit B.' That said labor and material was furnished and the indebtedness incurred therefor between the 25th day of January, 1913, and June 12, 1913, and was of the contract price and value of $3,394.51, and on which amount the plaintiff received payment of $850, leaving a balance due and unpaid of $2,544.51 for such labor and material so furnished and indebtedness incurred as aforesaid and for which said surety bond was given by said defendants." And that demand for the payment of the balance due on said account for labor and material had been made and payment refused, and that said action was brought within six months as provided by statute, and attached a statement of the account for labor and material, as claimed, as "Exhibit B," and prayed for judgment in the amount of the account.

The statement of the account attached to the petition was as follows:

Oklahoma City, Okl., August, 1913.

Nick Peay, doing business as the Nick Peay Construction Company, To Municipal Excavator Company, Dr.

February 28, 1913, statement rendered ..

$ 894 23

February 28, 1913, statement rendered .....

483 36

April 6, 1913, statement rendered .........

409 21

April 6, 1913, statement rendered ..........

19 74

June 12, 1913, statement rendered .......

1,443 53

June 12, 1913, statement rendered .........

144 44

---------

$3,394 51

Credits.

March 1, 1913, by cash .....

850 00

---------

Balance due .............

$2,544 51

The pertinent parts of the contract between plaintiff and Nick Peay, under which plaintiff's claim arose, are as follows:

"Clause 1. That said first party (plaintiff) hereby agrees to furnish said second party (the construction company) with two of its trenching machines for a minimum term of sixty working days, without respect to delays Sundays and legal holidays excepted. * * *

Clause 3. Said first party hereby agrees to furnish one operator who shall be in full charge of said machine during such time as second party desires to operate said machine, and shall also have the right to employ an engineer and fireman to operate the engine and do firing. Said operator, engineer and fireman to be the employés of and to be paid by the second party.

Clause 5. Said second party shall pay to said first party a minimum rental of $30 for No. 43 and $20 for No. 58 per day * * * and in addition to pay five (5) cents per cubic yard for all excavation in trenches less than eight (8) feet in depth, and ten (10) cents per cubic yard for all excavation in trenches (8) feet or more in depth."

The surety company filed a general demurrer to the petition which was by the court overruled, and the surety company, refusing to amend but electing to stand upon its demurrer, refused to plead further, and the court rendered judgment against it for the amount claimed in plaintiff's petition. To review that judgment an appeal has been duly perfected to this court.

The error assigned is the order of the court overruling the demurrer to the petition. It is insisted by the plaintiff in error that, inasmuch as it appeared from the face of the petition that the account sued upon was not for "labor and material" furnished in connection with the execution of the contract for a public improvement, but arose out of a claim for rentals for trenching machines furnished by the plaintiff to the contractor, this indebtedness is not within the condition of the bond, and therefore the petition failed to state a liability against the surety company. It is contended on behalf of the defendant in error that inasmuch as the petition alleged that the account was for "labor and material furnished the contractor in the execution of the public improvement," and that the demurrer admitted the truth of these allegations, therefore the petition stated an indebtedness within the conditions of the bond, and the court was therefore right in overruling the demurrer.

It may be conceded that, so far as the allegations of the petition are concerned, considered alone an indebtedness within the terms of the bond is declared upon, since the claim is alleged to be due for labor and material furnished the contractor in the execution of his contract; but, when taken in connection with the exhibits attached to the petition, it clearly appears that the indebtedness sued upon was for the rentals for the trenching machines that the plaintiff furnished the contractor. However, the rule is that in construing the petition upon a demurrer the exhibits attached thereto must be considered in connection with the allegations thereof. In the case of Whiteacre v. Nichols, 17 Okl. 387, 87 P. 865, it is said:

"On demurrer to a petition, as defective, in that it does not state facts sufficient to constitute a cause of action, the petition should be liberally construed with a view to substantial justice between the parties; and a demurrer will only be sustained where the petition presents defects so substantial and fatal as to authorize the court to say that, taking all the facts to be admitted, they furnish no cause of action whatever."

In Calman v. Kreipke, 40 Okl. 516, 139 P. 698, the Nichols Case, supra, is approved, and the first paragraph of the syllabus of that case reads:

"In an action on account where the petition upon its face states facts sufficient to constitute a cause of action against the defendant, but certain exhibits attached thereto suggest a doubt as to whether the defendant, in making the purchase, acted in a representative capacity, or as an individual, a general demurrer thereto should be overruled."

See, also, Davis et al. v. Board of Commissioners of Choctaw Co., 158 P. 294, not officially reported.

Under the rule announced in these decisions, the allegations of the petition in the instant case must be construed in connection with the exhibits attached thereto. So construed, it clearly appears that the claim in suit is due entirely for rentals on machines furnished by the excavator company to the contractor. This presents the question squarely whether or not a claim for rentals due for a machine, independent of any claim for labor for operating it, can properly be said to be "labor and material furnished" within the condition of the bond in suit. Upon the answer...