Thompson Transport Co. v. Middlestates Const. Co.
| Decision Date | 12 December 1964 |
| Docket Number | Nos. 43822 and 43860,s. 43822 and 43860 |
| Citation | 194 Kan. 52,397 P.2d 368 |
| Parties | THOMPSON TRANSPORT COMPANY, Inc., a Kansas Corporation, Appellant, v. MIDDLESTATES CONSTRUCTION COMPANY, a Nebraska Corporation (Defendant) and Trinity Universal Insurance Co., a Texas Corporation, Appellee. |
| Court | Kansas Supreme Court |
Syllabus by the Court
1. In an action on a G.S.1949, 68-410 bond given in connection with a road construction contract of the State Highway Commission, it is held: The provisions of the statutory contract bond show an intention on the part of the obligors who signed the bond to comply fully with the provisions of the contract entered into between the principal and the State Highway Commission and to comply with the provisions of the statute, thus covering the expense of transporting road materials, all as more particularly set forth in the opinion.
2. The obligations of those signing a statutory contract bond are fixed by the terms of the bond, and if the bond shows an intention to guarantee compliance with the terms of the contract pursuant to which the bond is given, the surety signing the bond becomes the surety for the full performance of all the terms of the contract.
Patrick L. Connolly, Topeka, argued the cause, and Milford M. Magee, Topeka, was with him on the brief for appellant.
Robert T. Cornwell, Wichita, argued the cause, and Wayne Coulson, Paul R. Kitch, Dale M. Stucky, Donald R. Newkirk, Robert J. Hill, Gerrit H. Wormhoudt, Philip Kassebaum, John E. Rees, Willard B. Thompson and David W. Buxton, Wichita, were with him on the brief for appellee. Hugo T. Wedell and Homer V. Gooing, Wichita, of counsel.
This is an action by Thompson Transport Company, Inc. (appellant) to recover freight charges for transporting bituminous base (road mix) materials for Middlestates Construction Company. Middlestates had a road construction contract with the State Highway Commission of Kansas. The appellant sued Middlestates and also Trinity Universal Insurance Company (appellee), claiming such transportation charges were covered by the G.S.1949, 68-410 bond signed by Trinity as surety. The trial court entered judgment for Trinity, and appeal has been duly perfected by Thompson Transport Company, Inc.
The question is whether charges for transporting such road materials are covered by the bond given pursuant to G.S.1949, 68-410.
The preliminary facts and procedural steps necessary to focus the foregoing issue on appeal are conceded by the parties, and we shall not dwell upon them. The facts necessary for a determination of this appeal have been stipulated by the parties. In pertinent part they provide '5. That defendant Middlestates Construction Co. on or about July 6, 1961, entered into a contract with the State Highway Commission of Kansas for the construction of 6.007 miles of roadway with a bituminous base (road mix) in Barton County, Kansas, and identified as Project 4-5 K 5097(2); that a copy of said contract is attached hereto as Stipulation Exhibit No. I, and is incorporated herein as if set out in full; that said contract incorporated and included by reference the 1960 Kansas Standard Specifications, a copy of which is attached hereto as Stipulation Exhibit No. II and incorporated herein as if set out in full, * * *
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'6. That on the 6th day of July, 1961, defendant Middlestates Construction Co., as principal, and defendant Trinity Universal Insurance Co., as surety, executed a G.S.1949, 68-410, statutory contract bond, which was approved by and filed with the State Highway Commission of Kansas; and that a copy of said bond is attached hereto as Stipulation Exhibit No. III and is incorporated herein as if fully set out.
'7. That defendant Middlestates Construction Co., in the performance of said contract, contracted with the Mobil Oil Company for the purchase of bituminous base (road mix) from the latter's Augusta, Kansas, refinery, which purchase was F.O.B. the refinery.
'8. Pursuant to request by defendant Middlestates Construction Co., on August 9, 1961, plaintiff began transporting said bituminous base (road mix) from the Mobil Oil Company refinery at Augusta, Kansas, to Barton County, Kansas, where it was stored in tanks at the project site and thereafter used and consumed in the construction of said public highway; and that plaintiff continued transporting said materials until November 27, 1961.
'9. Defendant Middlestates Construction Co. is indebted to plaintiff for transporting said materials in the sum of $9,617.13, for which amount plaintiff has made demand, but defendant Middlestates Construction Co. has failed and neglected to pay the same.
'10. That defendant Middlestates Construction Co. was given authority for temporary suspension of work on February 2, 1962, ending on or about March 17, 1962; that thereafter the Highway Commission for the State of Kansas made written demands upon said defendant on March 19 and 30, 1962, to begin work; that the Kansas Highway Commission served demand and notice upon defendant Middlestates Construction Co., under Section A 8-8, of 1960 Standard Specifications; that said defendant refused to resume work; and that the project was assumed by Mr. Charles Hulme on April 7, 1962, who completed the project on April 20, 1962.
'11. That subsequent to the defendant Middlestates Construction Company's refusal to pay plaintiff's account, plaintiff made demand for payment of the same upon Trinity Universal Insurance Co. as surety under said statutory contract bond; that defendant Trinity Universal Insurance Co. informed plaintiff of its contention that its freight bill was not covered by said statutory contract bond and refused to pay the same or any part thereof and still refuses to do so.
'12. That on or about the 9th day of April, 1962, plaintiff filed an itemized statement under oath with the State Highway Commission, a copy of which is attached hereto as Exhibit No. IV, and is incorporated herein as if set out in full; that said itemized statement is true and correct.
'13. That in transporting said materials, plaintiff used and consumed labor of its employees, its trucks and gasoline, lubricating oils, fuel oils greases and similar items necessary to transport bituminous base (road mix) from Augusta, Kansas, to the storage tanks at the project site in Barton County, Kansas; that said account is composed entirely of plaintiff's charges for transporting said materials to the construction site as hereinbefore alleged whereby they were used in and consumed in the construction and completion of this project.' (Emphasis added.)
Pursuant to stipulation No. 9, wherein Middlestates stipulated to the amount of its indebtedness to the appellant, the trial court entered judgment against Middlestates, and it did not appeal. In its contract with the State Highway Commission Middlestates agreed at its 'own proper cost and expense to do all the work, furnish all materials and labor necessary to do the work in accordance with the plans and specifications herein described, and in full compliance with all the terms of this agreement and the requirements of the engineer under it.' (Emphasis added.)
The contract further provided:
'It is also understood and agreed that the advertisement, proposal bond, specifications and plans hereto attached, or hereinbefore referred to are all essential documents of this contract and are a part thereof.' (Emphasis added.)
The statutory contract bond entered into by Middlestates, as principal, and Trinity Universal Insurance Company, as surety, firmly bound Middlestates and Trinity unto the State of Kansas in the penal sum of $182,983.82 (the full amount of the road construction contract) to be paid the State Highway Commission of Kansas on the conditions set forth in the bond.
The condition of the bond provides:
'* * * If the Principal shall fully and faithfully perform such contract in every respect and properly and promptly complete the work in accordance with the provisions of said contract, plans and specifications, and any additions to or changes in said contract, * * * and shall pay all indebtedness incurred, whether by said Principal, subcontractor or otherwise, for supplies, material or labor furnished, used or consumed in connection with or in or about the construction of the project for which said contract has been let, including gasoline, lubricating oil, fuel oils, greases, coal and other items used or consumed in carrying out the provisions of said contract, and shall fully indemnify, compensate and pay the said State Highway Commission of Kansas for any and all loss, costs, damage or expense, which it may suffer, or be held responsible for, by reason of any negligence, defective condition, default, failure or miscarriage in the performance of said contract, whether by said Principal, subcontractor or otherwise, then this obligation shall be void, otherwise shall remain in full force and effect.' (Emphasis added.)
The trial court determined the matter in favor of the appellee in accordance with the appellee's theory of the case. The reason for its decision is set forth in the following paragraph of its memorandum decision:
Upon entry of judgment by the trial court a motion for a new trial was filed and...
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