Webb v. Lee
| Decision Date | 05 June 1923 |
| Citation | 194 N.W. 155,181 Wis. 39 |
| Parties | WEBB ET AL. v. LEE ET AL. |
| Court | Wisconsin Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Trempealeau County Court; E. F. Hensel, Judge.
Action by W. J. Webb and others against L. J. Lee and others. Judgment for plaintiffs, and defendants appeal. Modified, affirmed, and remanded.
This is an action brought by various materialmen against a contractor and his sureties. It was alleged in the complaint that the county board of Trempealeau county and the trustees of the county asylum for the insane advertised for bids for the construction of certain additions to the asylum; that defendant Lee was the lowest bidder and was awarded the contract; that the trustees required him to furnish bond in the sum of $17,279.97, the amount of his bid, for the faithful performance of the terms of the contract; that by the terms of the bond, it was intended that the bond should stand as security and be for the benefit of all persons performing labor or furnishing materials to said Lee in or about the erection or construction of the work described in the contract, and to secure to them the payment of all claims against Lee for such labor and materials. It was then alleged that certain materials had been furnished for which payment had not been made. The sureties demurred, for the reason “that it appears upon the face of the complaint that the same does not state facts sufficient to constitute a cause of action.” The demurrer was overruled, and an answer was filed denying liability for the materials furnished.
During the trial the defendant sureties moved to amend the answer to allege that the county failed to withhold 10 per cent. of the contract price as provided in the contract, and that it paid to Lee over $1,000 more than was authorized by the contract without consent of the sureties. The sureties offered to produce evidence to show the overpayment and also offered to show that lumber purchased by the contractor and used for concrete forms and scaffolds was removed or sold by the contractor. The court refused to allow the answer to be amended and also refused to allow the testimony to be given.
The condition of the bond was as follows:
“The condition of the above obligation is such that if the parties named in the within contract as ‘the party of the first part’ shall well and truthfully perform all of the conditions contracted to be performed by the ‘party of the first part,’ as by the terms of said contract stipulated, without fraud or delay, and shall pay all bills for labor and material incurred therein, then this bond shall be void and of no effect; otherwise, to remain in full force and virtue.”
Section 3327a, Stats., provides that all contracts for the doing of any public work of the state, county, etc., shall contain a clause providing--
“for the payment by the contractor of all claims for such work and labor performed and materials furnished, and no such contract shall hereafter be made or let unless the contractor shall give a good and sufficient bond, the penalty of which shall be not less than the contract price, conditioned for the faithful performance of the contract, and the payment to each and every person or party entitled thereto of all the claims for work or labor performed, and material furnished for or in or about or under such contract.”
It also provides that:
“No assignment, modification or change of the contract, or change in the work covered thereby, nor any extension of time for completion of the contract shall release the sureties on said bond.
Any party in interest may, within one year after the completion and acceptance of said contract, maintain an action in his own name against such contractor and the sureties upon such bond required by this section for the recovery of any damages he may have sustained by reason of the failure, refusal or neglect of said contractor to comply with the aforesaid terms and conditions of said contract or any of the terms and conditions of said contract between said contractor and subcontractors.”
At the close of the testimony the court instructed the jury to find a general verdict in favor of the plaintiffs.
J. Reese Jones, of Osseo, for appellants.
Cowie & Hale, of La Crosse, for respondents.
JONES, J. (after stating the facts as above).
The first question presented is whether the complaint states a cause of action against the sureties on the bond. It is argued by counsel for appellants that it appears from the contract and the bond that the sureties were liable to the county only; that the bond was given to protect the county in case of the failure of Lee to perform his contract, and that it is only in this connection that the word “sureties” is used in the contract; that in case of default the bond provided that payment should be made to the county; that this view is supported by the language in the contract that, if he should neglect or refuse to furnish the materials, the county should have the right to do the work and furnish the materials; that the sureties were to become liable only in the event that the county should have to take over the contract and a deficiency should arise, and for that deficiency only.
[1] This contention does not give sufficient consideration to the very plain language in the bond which required the contractor not only to faithfully perform the conditions of the contract, but also to “pay all bills for labor and materials incurred therein.” There is no doubt that it was competent for the sureties to make a contract for the benefit of third persons who might become interested by furnishing material for the building and that such persons could enforce the contract thus made for their benefit. This question has several times been raised and decided by this court. In R. Connor Co. v. Ætna I. Co., 136 Wis. 13, 20, 115 N. W. 811, 813, it was said:
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