State of Oregon v. Security Const. Co.

• Decision Date: 26 January 1925
• Docket Number: No. 9290.,9290.
• Parties: STATE OF OREGON, for Use of CLYDE EQUIPMENT CO. v. SECURITY CONST. CO. et al.
• Court: U.S. District Court — District of Oregon

3 F.2d 274 (1925)

STATE OF OREGON, for Use of CLYDE EQUIPMENT CO. v. SECURITY CONST. CO. et al.

No. 9290.

District Court, D. Oregon.

January 26, 1925.

Wm. B. Layton and Edward A. Boyrie, both of Portland, Or., for plaintiff.

A. A. Smith, of Baker, Or., and F. S. Ivanhoe and Robert S. Eakin, both of La Grande, Or., for defendants.

WOLVERTON, District Judge.

This case was submitted to the court for decision, without the intervention of a jury.

The contractor, namely, the Security Construction Company, agreed to furnish all necessary machinery, tools, apparatus, materials, and labor for doing the work assigned. The bond of the National Surety Company covers the faithful performance of the work. The matters for decision comprise certain claims, made on behalf of Clyde Equipment Company, for which it maintains it should be compensated, as arising under the contract, and for the payment of which the bond stands as surety. This entails a review of the items, in groups, of the account rendered.

The first group comprises rentals agreed to be paid by a subcontractor, namely, of $600 per month on a No. 2 and a No. 3 Gates gyratory crusher, a dragline hoist, and a "Ceco" drag scraper, and $500 per month on a No. 6 — K Gates gyratory crusher and screen. The amount claimed is $2,220.

It is questionable whether this item should be allowed on the ground and for the reason that these crushers, and the hoist, scraper, and screen, constitute the plant and permanent outfit of the contractor for doing the work which it agreed to perform, and therefore are not referable to material and labor, under the statute and the bond given for insuring payment to those furnishing such material. La Grande Iron Works v. Neal & Gaskell, 231 P. 645 (recently decided by the Supreme Court of Oregon); National Surety Co. v. United States, 228 F. 577, 143 C. C. A. 99, L. R. A. 1917A, 336. If it were a case of first impression, I should be inclined so to hold. This would allocate the renting expense to the contractor, and there would be no relief under the statute.

The Oregon Supreme Court has spoken, however, to the subject, and brings the rental in such a case within the purview of the statute and bond. Multnomah County v. United States Fidelity & Guaranty Co., 87 Or. 198, 170 P. 525, L. R. A. 1918C, 685; Multnomah County v. United States Fidelity & Guaranty Co., 92 Or. 146, 180 P. 104. By this interpretation of the statute I am bound. Of course, the rental must be only for the time the appliance is used in construction work. Portland v. O'Neill, 98 Or. 162, 192 P. 909.

It is insisted that the complaint does not show that the machinery was, in fact, used in construction work. But coming, as the objection does, as a demurrer to the evidence, the complaint is entitled to a liberal construction, and, in the present case, it suffices to state a cause. The claim of $2,220 as rental for this equipment will be allowed.

The next item is for cost of loading, transporting, and unloading equipment for which rental is claimed, $789.50. This is allowable on the same principle as the rental. It was paid by Clyde Equipment Company, and was essential for the delivery of the equipment on the ground. Illinois Surety Co. v. John Davis Co., 244 U. S. 376, 37 S. Ct. 614, 61 L. Ed. 1206.

The item of $231.84 is allowable on the like basis. The subcontractor agreed to return the equipment in good order — the usual wear and tear excepted.

Item $186.75 for screen. The evidence shows that this article of equipment was not consumed, through its use on the job, and it was an equipment which the subcontractor was bound to provide for carrying on his work. Clatsop County v. Feldschau, 99 Or. 680, 196 P. 379; American Surety Co. v. Lawrenceville Cement Co. (C. C.) 110 F. 717; National Surety Co. v. United States, 228 F. 577, ...