State ex rel. Berry Asphalt Co. v. Western Sur. Co., 5-350

• Decision Date: 22 March 1954
• Docket Number: No. 5-350,5-350
• Citation: 266 S.W.2d 835,223 Ark. 344
• Parties: STATE ex rel. BERRY ASPHALT CO. et al. v. WESTERN SURETY CO. et al.
• Court: Arkansas Supreme Court

Page 835

266 S.W.2d 835

223 Ark. 344

STATE ex rel. BERRY ASPHALT CO. et al. v. WESTERN SURETY CO. et al.

No. 5-350.

Supreme Court of Arkansas.

March 22, 1954.

Concurring Opinion April 5, 1954.

Rehearing Denied May 3, 1954.

Tompkins, McKenzie & McRae, Prescott, for appellants.

H. B. Stubblefield, Little Rock, for appellees.

GEORGE ROSE SMITH, Justice.

This is a suit brought by the appellant, Berry Asphalt Company, (a) to recover judgment for $5,023 for asphalt sold to the North Little Rock Asphalt Company, a corporation that is now insolvent, (b) to recover $1,910 of this account from Western Surety Company, as surety upon a contractor's bond executed by the insolvent company, and (c) to reach by equitable garnishment the sum of $300 which Street Improvement District No. 567 of Little Rock is said to owe the insolvent concern. On these issues the chancellor (a) entered judgment by default for the amount sued for, (b) held that the suit upon the contractor's bond was filed too late, and (c) ruled that the $300 held by the district was not reached by this proceeding. This appeal brings issues (b) and (c) to us.

In 1950 District 567 and a companion district employed the North Little Rock Asphalt Company to do certain paving work for the districts. The agreement required the contractor to furnish two bonds, both of which were executed by the contractor as principal and by Western as surety. The work was substantially completed in October of 1951, but this suit was not filed by Berry, which had furnished $1,910 worth of asphalt for the job, until February 24, 1953. The chancellor was of the opinion that the suit should have been brought within six months after October, 1951, the month in which he found the work to have been completed and the final estimate to have been made.

Except for a contention that we do not reach, relating to the date of the final estimate, Berry concedes that its suit was delayed too long as far as one of the two contractor's bonds is concerned. This bond is entitled Statutory Performance Bond, secures only indebtedness for labor and materials, and by its terms was executed pursuant to Act 446 of 1911. Ark.Stats.1947, §§ 51-628 and 51-629.

The dispute upon issue (b) centers upon the other bond, which is entitled Performance Bond. The undertaking of this bond is twofold: First, that the contractor will perform and complete the job in a good and workmanlike manner, and, second, that he will save the districts harmless against claims for labor, materials, and certain other items that we need not enumerate, except to say that these items are substantially the same as those listed in § 1 of Act 368 of 1929. Ark.Stats. § 14-604. Berry contends that this second bond is a common law bond upon which the period of limitations is five years. Western contends that it is a statutory bond, upon which § 3 of Act 368 requires suit to be brought within six months after the date of the final estimate to the contractor. That is the narrow issue to be decided.

We think Berry's position to be well-taken. Act 446 of 1911 required certain public officers, upon entering into construction contracts, to obtain a bond securing liability for labor and materials. Since those who furnish labor and materials for public works are not protected by the general mechanic's lien laws (Holcomb v. American Surety Co., 184 Ark. 449, 42 S.W.2d 765), the purpose of Act 446 was to provide that protection with respect to those public contracts to which the Act applies.

Under the 1911 law questions arose as to the extent of the surety's liability upon the bond for labor and materials, and Act 368 of 1929 was enacted for the purpose of including 'all items which had been previously questioned or would likely be used or employed subsequently in the performance of the construction contracts there enumerated.' Consolidated Indemnity & Ins. Co. v. Fischer, etc., Co., 187 Ark. 131, 58 S.W.2d 928, 929.

It is clear that the 1929 statute did not, as Western now contends, require a second statutory bond in addition to the one exacted by the 1911 law. Instead, the 1929 Act is purely interpretational in character. Section 1, § 14-604, provides that all bonds required by designated public officers shall be liable for claims for labor, materials, camp equipment, fuel, food for men and animals, lumber used in making forms, and several other items...