W. S. Dickey Clay Mfg. Co. v. Ferguson Inv. Co.

• Decision Date: 31 December 1963
• Docket Number: No. 40272,40272
• Citation: 388 P.2d 300,1963 OK 298
• Parties: W. S. DICKEY CLAY MFG. CO., a corporation, Plaintiff in Error, v. FERGUSON INVESTMENT COMPANY, Inc., a corporation, M. S. Ferguson and American- First Title & Trust Company, a corporation, Defendants in Error.
• Court: Oklahoma Supreme Court

Page 300

388 P.2d 300

1963 OK 298

W. S. DICKEY CLAY MFG. CO., a corporation, Plaintiff in Error, v. FERGUSON INVESTMENT COMPANY, Inc., a corporation, M. S.

Ferguson and American- First Title & Trust

Company, a corporation, Defendants in Error.

No. 40272.

Supreme Court of Oklahoma.

Dec. 31, 1963.

Syllabus by the Court

1. It is essential to the validity of administrative rules and regulations that the agency making same be fully authorized so to do either by statutory provision or implication.

2. Ordinarily a legislative enactment must be interpreted in accordance with the plain ordinary meaning and import of the language employed.

3. The provisions of a contract in the nature of a performance bond may be considered as having been amended by applicable principles of law in force and effect at the time of its execution.

Appeal from the District Court of Oklahoma County; A. P. Van Meter, Judge.

Plaintiff sued the defendants to enforce the provisions of a performance bond. From a judgment sustaining defendants' demurrer to plaintiff's petition and dismissing the action, plaintiff appeals. Affirmed.

Johnston & Johnston, Oklahoma City, for plaintiff in error.

Barefoot and Moler, by Edward H. Moler, Oklahoma City, for defendants in error.

WILLIAMS, Justice.

The principal question to be determined in this appeal is whether or not a condition in the bond of a developer of a sub-division, required by the city planning commission, to pay for materials and labor furnished, and which condition was not specifically provided for either in the statute or in the ordinance authorizing such commission to accept such bond, is enforceable in suit brought by a lien claimant.

Plaintiff in error, hereinafter called plaintiff, initiated the action from which this appeal arises against defendants in error, Ferguson Investment Company, Inc., and M. S. Ferguson, hereinafter called Ferguson, and American-First Title & Trust Company, a corporation, hereinafter called American First, to recover the balance owing it for materials furnished to Concho Construction Co., hereinafter called Concho.

In plaintiff's amended petition, in pertinent part, it is alleged that on or about February 22, 1961, Ferguson undertook to subdivide and plat a tract of land in Oklahoma City and as a part thereof, to construct and install certain improvements and utilities; that in connection with such subdivision Ferguson as principal and American-First as surety executed a subdivision bond pursuant to the provisions of 11 O.S.1951, § 1425, Section 13.1.07 of the Revised Ordinances of the City of Oklahoma City, 1960, and paragraph VII of the duly adopted and published rules and regulations of the Oklahoma City Planning Commission; that such bond was conditioned that Ferguson would, within two years, install and complete all improvements and utilities in such subdivision and pay all bills for contractors, sub-contractors, and labor and materials incurred in completion thereof; that Concho entered into a contract with Ferguson to construct and install certain utilities; that plaintiff sold and delivered to Concho certain materials used in the construction thereof; that $1,658.86 of the cost of such materials remained due to plaintiff and upaid by Concho.

The trial court sustained the general demurrer of Ferguson and American-First to plaintiff's amended petition and dismissed the action.

For reversal plaintiff advances three propositions. The first is: 'A general demurrer lies only when the entire petition taken as a whole fails to state a cause of action.'

Plaintiff contends that it alleged 'there separate and distinct governmental requirements pursuant to which the bond was executed'; that Ferguson and American-First in their brief in the trial court 'having specifically limited their objection to only one, [the statute] admit the other two' (the ordinance and the rules and regulations of the planning commission); and that a 'petition showing plaintiff is entitled to any relief is good as against a general demurrer and the demurrer should be overruled.'

The statute, 11 O.S.1951 § 1425 in pertinent part, provides:

'Before exercising the powers referred to in Section 13, the planning commission shall adopt regulations governing the subdivision of land within its jurisdiction. Such regulations may provide for the proper arrangement of streets in relation to other existing or planned streets and to the master plan, for adequate and convenient open spaces for traffic, utilities, * * *.

'* * * The regulations or practice of the commission may provide for a tentative approval of the plat previous to such installation; but any such tentative approval shall be revocable for failure to comply with commitments on which such tentative approval was based, and shall not be entered on the plat. In lieu of the completion of such improvements and utilities prior to the final approval of the plat, the commission may accept an adequate bond satisfactory to the commission, with surety, to secure to the municipality the actual construction and installation of such improvements or utilities at a time and according to specifications fixed by or in accordance with the regulations of the commission. * * *'

The ordinance, section 13.1.07 of the revised ordinances of the City of Oklahoma City, 1960, in pertinent part, provides:

'* * * In lieu of the completion of such improvements and utilities prior to the final approval of the plat, the Commission may accept an adequate bond satisfactory to the Commission, with surety, to secure to the City of Oklahoma City, the actual construction and installation of such improvements or utilities at a time and according to specifications fixed by or in accordance with the regulations of the Commission.'

Paragraph VII of the rules and regulations of the Oklahoma City planning commission, in pertinent part, provides:

'When the plat is in final record form ready for the approval of the Commission, the request for approval will be accompanied by the following:

* * *

* * *

'd. A good and sufficient surety bond in the amount of 100% of the total cost of the improvements in accordance with the estimates required by Section c above, guaranteeing that the addition will be developed in accordance with current subdivision regulations of the Planning Commission of the City of Oklahoma City, and that paving, sanitary sewers, storm sewers, and other provisions for handling surface water will be constructed in accordance with the plans and specifications, approved by the City Engineer, and water mains will be constructed in accordance with the plans and specifications approved by the City Water Superintendent, of the City of Oklahoma City, and that the developer will guarantee the payment of all materials and labor entering into the construction of said improvements.' (Emphasis supplied.)

In its reply brief plaintiff states: 'It is not disputed that the bond in question is a statutory bond and we agree with defendants that the general rules in respect to construction of statutory bonds as set forth on pages 6 and 7 of defendants' brief are recognized as the generally accepted and established rules pertaining to the construction and enforcement of statutory bonds.'

The language of the ordinance and the statute is identical except that in the former the words 'City of ...