Wallace Equipment Co. v. Graves

• Decision Date: 30 December 1924
• Docket Number: 18820.
• Citation: 132 Wash. 141,231 P. 458
• Parties: WALLACE EQUIPMENT CO. et al. v. GRAVES et al.
• Court: Washington Supreme Court

231 P. 458

132 Wash. 141

WALLACE EQUIPMENT CO. et al. v. GRAVES et al.

No. 18820.

Supreme Court of Washington

December 30, 1924

Department 1.

Appeal from Superior Court, Lewis County; Reynolds, Judge.

Action by the Wallace Equipment Company and others against C. L Graves and another. Judgment for plaintiffs, as against named defendant only, and plaintiffs appeal. Affirmed.

Tolman J., dissenting.

Cosgrove & Terhune, of Seattle, Hull & Murray and O. J. Albers, all of Chehalis, Harmon & Keyes, of Tacoma, Paul S. Dubnar, of Seattle, and Dysart & Ellsbury, of Centralia, for appellants.

Roberts & Skeel and J. J. Geary, all of Seattle, for respondents.

BRIDGES J.

Lewis county, in this state, and the defendant Graves entered into a written contract, by the terms of which the latter agreed to build a certain bridge for something over $29,000. The contract contained the usual provisions, and, among others that the contractor should provide and pay for all materials and labor and that he would give the county a bond running to the state of Washington in the full amount of the contract, conditioned that he would faithfully carry out his contract, and----

'for the payment of all laborers' and mechanics' liens and materialmen, and all persons who shall supply such person or persons or subcontractors with provisions or supplies for the carrying on of such work, and all just debts, dues, and demands incurred in the performance of such work. It is the intention that said bond shall afford protection to the persons entitled thereto under the provisions of sections 1159 and 1161, Rem. Comp. Stat. of the state of Washington, and that in addition thereto said bond shall guarantee the faithful performance of each and all the provisions of this agreement.'

Subsequently the contractor executed a bond, with the respondent as surety, running to the state of Washington, which is designated as the 'obligee.' Its preamble recites that the principal, to wit, Mr. Graves, had entered into the contract above mentioned, and that a copy thereof was attached to the bond and made a part thereof 'as fully as if recited at length herein.' It then continues:

'Now, therefore, the condition of this obligation is such, that if the principal shall indemnify the obligee against any loss or damage directly arising by reason of the failure of the principal to faithfully perform said contract, then this obligation shall be void, otherwise to remain in full force and effect: Provided however, that this bond is executed upon the following express conditions, the performance of each of which shall be a condition precedent to any right of recovery herein, anything in the contract to the contrary notwithstanding.'

The conditions are then set out at length. The first is that the obligee must within a definite time give notice of any default on the part of the contractor, and that the surety shall have an opportunity to complete the work or procure others to do it. The second condition is that no claim or suit shall be brought against the surety subsequent to two years immediately following the date of the contract. The third is that the surety shall not be liable for damages resulting from strikes, etc., 'nor for the furnishing of any bond or obligation other than this instrument.' The fourth requires the obligee to do whatever is reasonable and necessary for it to do under the terms of the contract, otherwise there shall be no liability on the bond, and that no changes in the plans and specifications shall be made. The last condition is 'that no right of action shall accrue upon or by reason hereof to or for the use or benefit of any one other than the obligee herein named.' The appellants furnished labor and materials to the contractor, and not being paid therefor filed their claims with the county auditor, as provided by the statute, and then brought this suit to enforce their claims against the bond. At the trial it was admitted that the bond in question is the only one that was given, and that there was no understanding that any other bond was to be given, and that the bond sued on was approved by the county commissioners of Lewis county, and filed with the county auditor. There was a judgment in favor of the plaintiffs against the defendant Graves, but the case was dismissed as to the respondent surety company.

Sections 1159, 1160, and 1161, Rem. Comp. Stat., provide that, when a county or other municipality shall enter into a contract for the making of a public improvement, the contractor shall give a bond to the state for the faithful performance of the contract, including the payment by him of all labor and materialmen's claims, and that such bond shall be approved by the county commissioners and filed with the county auditor, and shall be in an amount equal to the full contract price, and the persons performing labor and furnishing materials shall have a right of action against the bond, and that if any such municipality fail to obtain the bond required, it shall be liable to the laborers and materialmen. The bond here runs to the state, but, of course, is for the benefit of the county. It is admitted by all parties that if the instrument sued on be construed to be a statutory bond, then the judgment must be reversed; otherwise affirmed.

The entire operating portion of the bond is contradictory of the bond required by the statute. It not only fails to provide for payment of labor and materialmen's claims, but expressly states that no person other than the county shall have any right of action on it. It does not even recite that it is given for the faithful performance of the work by the contractor, but merely that it is given to 'indemnify the obligee (the county) against any loss or damage directly arising by reason of the failure of the principal to faithfully perform' his contract. Not only is there not a statutory provision in it, but every word used is a contradiction of the statute, unless it be that the fact that the contract itself was made part of the bond shows an intention to comply with the statute (a matter we will later discuss). In other words, we are considering a bond which not only does not comply with any provision of the statute, but is throughout antagonistic thereto.

The latest case out of this court on the subject is Duke v National Surety Co. (Wash.) 227 P. 2. The same question arose there that is involved here. The bond...