Thompson Yards, Inc. v. Kingsley, 5057.

• Decision Date: 22 April 1926
• Docket Number: No. 5057.,5057.
• Citation: 54 N.D. 49,208 N.W. 949
• Parties: THOMPSON YARDS, Inc., v. KINGSLEY et al., School Board of Franklin Dist., Steele County.
• Court: North Dakota Supreme Court

54 N.D. 49

208 N.W. 949

THOMPSON YARDS, Inc.,

v.KINGSLEY et al., School Board of Franklin Dist., Steele County.

No. 5057.

Supreme Court of North Dakota.

April 22, 1926.

Syllabus by the Court.

Section 6833 of the Compiled Laws for 1913 subjects officers and members of boards, failing to take bonds from contractors for public improvements, to a liability substantially the same as the liability of sureties on a contractor's bond, where such bond is given as required by section 6832.

Section 6832 of the Compiled Laws for 1913, requiring public officers or members of boards to take from contractors for public improvements bonds conditioned for the payment of claims on account of labor or materials furnished “to stand as security for all such bills, claims, and demands until the same are fully paid,” is construed and held to require the assumption of a liability on behalf of a contractor for public improvements in favor of laborers and materialmen similar to the security of a mechanic's lien for improvements of private property.

An extension of the time of payment of an account for labor or materials does not release the liability in favor of laborers and materialmen, which the statute imposes upon contractors' bondsmen, or, in the absence thereof, upon public officers or members of boards neglecting the statutory duty.

One who stands in the relation of a guarantor or a surety upon an obligation, which is required by statute to stand as security until certain claims are fully paid, is not released by a subsequent transaction between the principal debtor and the creditor which does not result in the release of the debtor or the payment of the claim.

The requirements of section 61 of the state Constitution that no bill shall embrace more than one subject, which shall be expressed in the title, are satisfied if the subject of legislation be fairly expressed in general terms and if all the provisions in the act are fairly germane to that subject and consistent with the avowed purpose.

Appeal from District Court, Steele County; A. T. Cole, Judge.

Action by the Thompson Yards, Incorporated, against J. Kingsley and others, members of the School Board of Franklin District in Steele County. Judgment for defendants other than defendant Kingsley, who made no defense, and plaintiff appeals. Reversed and remanded, with directions.

Chas. A. Lyche, of Hatton, and B. F. Spalding, of Fargo, for appellant.

P. O. Sathre, of Finley, and C. S. Shippy, of Hope, and W. J. Courtney, of Page, for respondents.

BIRDZELL, J.

This is an appeal from a judgment in favor of the defendants and from an order denying a motion for a new trial. The defendants were members of the school board of Franklin district in Steele county. As such, they entered into a contract with the defendant Kingsley to erect a schoolhouse for the district. They took no bond for the protection of those who might supply the labor and materials, such as they were required to take by section 6832 of the Compiled Laws for 1913. The plaintiff and appellant sold Kingsley material which was used in the building, for which the latter became indebted and owed an unpaid balance of $553. On December 29, 1920, the plaintiff's local agent took a note from Kingsley for the amount of the unpaid account, which note bore 10 per cent. interest and was payable April 1, 1921. Upon the taking of this note the account was not credited as paid. This action is brought under the statute above cited, which makes it the duty of a board contracting for the erection, repair, alteration, and betterment of a public building, before entering into any contract, to take a bond conditioned for the payment of all claims on account of labor and materials, and section 6833, which provides that the failure to take such a bond shall render the members who thus fail personally liable for all such bills not paid within 30 days after the completion of the work. At the conclusion of the trial, both parties moved for a directed verdict, and the court subsequently made findings of fact and conclusions of law, upon which judgment was entered for the defendants, other than Kingsley, the contractor, who made no defense.

[1] The principal contention of the appellant is that the members of the school board are liable under the statute as for a tort and not as sureties within the statutes defining that relationship and declaring the circumstances in which sureties are discharged. On the other hand, it is contended that the members of the board are sureties, and that the taking of the note in December, 1920, operated as an extension of the time of payment of the account until April 1, 1921, which discharged them.

In considering the questions of law presented on the record, resort must first be had to the statute imposing the liability sought to be enforced to determine its character and extent. As the liability is statutory, it must be measured in the light of the purpose to be subserved, and, obviously, it should not be so defined as to defeat any purpose which is expressed in the law with reasonable clearness and certainty. The sections of the statute involved read as follows:

“Section 6832. It shall be the duty of every public officer or board authorized to enter into a contract for the erection, repair, alteration or betterment of any public building or any other public improvements before entering into any such contract, to take from the contractor a good and sufficient bond for an amount at least equal to the price stated in the contract, conditioned to be void if the contractor and all subcontractors shall pay all bills and claims on account of labor or materials furnished in and about the performance of said contract, including all demands of subcontractors, said bond to stand as security for all such bills, claims and demands until the same are fully paid. The obligee in said bond shall be the state of North Dakota; but any person having any lawful claim against the contractor, or any subcontractor, on account of labor or materials, or both, furnished in and about the performance of said contract, may institute an action to recover the same in his own name upon said bond, in the same manner and with like effect as though the said bond were made payable to him.

Section 6833. Any officer and the members of any board who shall fail to take such a bond before entering into such a contract shall be personally liable for all such bills, claims and demands which shall not be paid within thirty days after the completion of the work.”

[2] In our opinion the respondents are warranted in assuming, as they do assume, that the liability of the defendant school directors is substantially the same as the liability of the sureties on a contractor's bond, where such a bond is given and filed as required, and in this opinion it will be so treated. The underlying purpose of statutes of this character is too plain to admit a controversy. They are designed to afford to laborers and materialmen a measure of security for their contribution to the public improvements named similar to the security of a mechanic's lien for improvements of private property. At the same time they minimize any public embarrassment that might result from the construction and use of an improvement, for which the contractor may have been fully paid, while laborers, materialmen, and subcontractors...