Uhrich v. Globe Surety Company of Kansas City

• Decision Date: 04 May 1915
• Citation: 166 S.W. 845,191 Mo.App. 111
• Parties: OSCAR W. UHRICH and BURNS H. UHRICH, Partners Doing Business as THE UHRICH PLANING MILL COMPANY, Appellants, v. GLOBE SURETY COMPANY OF KANSAS CITY, MISSOURI, a Corporation, Respondent
• Court: Kansas Court of Appeals

166 S.W. 845

191 Mo.App. 111

OSCAR W. UHRICH and BURNS H. UHRICH, Partners Doing Business as THE UHRICH PLANING MILL COMPANY, Appellants, v. GLOBE SURETY COMPANY OF KANSAS CITY, MISSOURI, a Corporation, Respondent

Court of Appeals of Missouri, Kansas City

May 4, 1915

Appeal from Clay Circuit Court.--Hon. Frank P. Divelbiss, Judge.

AFFIRMED.

Judgment affirmed.

New Krauthoff and John Taylor for appellants.

Haff Meservey, German & Michaels, Ralph Hughes and M. E. Lawson for respondent.

OPINION

JOHNSON, J.

This is an action on a building contractor's bond to recover for materials purchased by the contractor and used in the construction of the building for which the bond was given. The court sustained the demurrer to the petition filed by defendant, the surety on the bond, plaintiffs refused to plead further, judgment was rendered for defendant and plaintiffs appealed.

The material facts alleged in the petition are as follows: Lena G. Hill entered into a contract in writing with George W Huggins, a building contractor, by the terms of which he agreed to build an addition to, and make certain alterations in, a hotel building in Excelsior Springs, at a cost of $ 52,775. The following quotations from the contract contain all of its provisions relating to the obligation of the contractor to pay for labor and materials employed and used in the construction of the building:

"The said contractor covenants and agrees to and with the said owner to make and erect, build and finish . . . pay for all labor and material in a certain addition to the Royal Hotel as called for in the original plans and specifications. . . . The said owner agrees and binds herself for and in consideration of the erection of said buildings as aforesaid, to pay unto the said contractor the sum of $ 52,775 . . . provided . . . that all those employed by or furnishing materials to the said contractor shall have been paid and satisfied, so that they shall have no lien upon the buildings or works, and in case the said contractor shall fail so to pay and satisfy all and every claim and demand against said buildings as aforesaid, the said owner may, if she deems proper so to do, retain from the money due and coming to said contractor enough to pay and satisfy such claims and demands, it being, however, understood that nothing herein contained shall in any way be construed as impairing the right of the said owner to hold the said contractor or securities liable on his bond for any breach of the conditions of the same.

"Subcontractors and parties furnishing materials on account of this contract may be paid by the owner pro rata, as above stated, upon order from the contractor, or on presentation of O. K. bills from the contractor, and all such payments to be charged to account of this contract. All payments by the owner to the contractor or to his orders, to be made upon written certificates from the architects, based on the amount of labor performed and materials in and about the premises. Final payment will be made within ten days after this contract is fulfilled."

The bond in suit was executed by the contractor as principal and defendant as surety to the owner as sole obligee on the expressed condition "that if the said contractor shall duly perform said contract and fulfill all the several stipulations therein provided then this obligation is to be void, but if otherwise, the same shall remain in full force and virtue. It is hereby expressly agreed that the said L. G. Hill may make payments in any amounts to the contractor, subcontractor, and materialmen and laborers and such payments shall in nowise limit, affect or reduce our liability hereunder."

The contractor purchased materials of plaintiffs, used them in the construction of the building and failed to pay for them. Plaintiffs filed a materialman's lien against the building and brought a suit, which is now pending, against the contractor and owner for the enforcement of the lien. The present suit on the bond was instituted during the pendency of that action.

The grounds of the demurrer to the petition are, (1st) a defect of parties; (2nd) that a cause of action is not stated against the defendant Surety Company, and (3rd) that the pending suit to enforce the mechanic's lien is a bar to the present action. In the view we take of the case it will not be necessary to discuss the first and third grounds.

Plaintiffs say in their brief: "The theory of the action is that while plaintiffs are not named in said contract and bond they are entitled to sue thereon because they are parties for whose benefit said contract and bond were made." Or, to state it differently, the pleaded cause is based on the theory that since the building contract compelled the contractor for the stated consideration to preserve the property which was the subject of the contract from the liens of mechanics and materialmen who should furnish labor and material for the improvements, at the request of the contractor, and since the obligation imposed on defendant in the condition of the bond was coextensive with that the contractor assumed towards the owner under the building contract, the bond should be deemed to have been taken for the benefit of such mechanics and materialmen, for the reason that the payment of debts the contractor might incur in the construction of the improvements is shown by these contractual agreements to have been a direct, instead of an incidental, object of the contracting parties including defendant, the surety on the bond.

The rule is well settled that "a contract between two parties upon a valid consideration may be enforced by a third party when entered into for his benefit. This is so though such third party be not named in the contract and though he was not privy to the consideration. It is sufficient in order to create the necessary privity that the promisee owe to the party to be benefited some obligation or duty legal or...