West v. Detroit Fidelity & Surety Company
| Decision Date | 29 May 1929 |
| Docket Number | 26593 |
| Parties | EDWIN E. WEST ET AL., APPELLEES, v. DETROIT FIDELITY & SURETY COMPANY, APPELLANT |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Otoe county: JAMES T. BEGLEY JUDGE. Affirmed in part, and reversed in part.
AFFIRMED IN PART, AND REVERSED IN PART.
Syllabus by the Court.
One who furnishes labor or supplies to a contractor for the building of a public road may maintain an action in his own name upon the surety bond of such contractor, conditioned for the payment " for materials and supplies used or employed on said contract," as a contract made with a third person for his benefit.
Claims for labor and material furnished a contractor for public work may be assigned, and the assignee may bring an action thereon in his own name.
A compensated surety upon a bond given for the faithful performance of a contract for the construction of a gravel road will not be released because of an extension of the time granted the contractor for the completion of the work without the consent of the surety, unless it appears that the surety has suffered some injury or been subjected to some loss by reason of such extension. The bond of such a surety is in the nature of a contract of insurance, and the rule of strictissimi juris, by which the rights of uncompensated sureties are determined, is not applicable thereto.
A surety bond was given for the faithful performance of a contract for gravelling a public road, conditioned that the contractor " shall pay for all labor, equipment gasoline, oils, materials and supplies used or employed on said contract." Contracts for hauling the gravel were made with the owners of automobile trucks at a certain price per yard per mile. Arrangement was made by the contractor with certain garage men and mechanics to make repairs to such trucks upon orders from the contractor, to whom they were to be charged. The contractor deducted the cost of repairs from the amount due for hauling. Held, that the labor and materials used in making such repairs were " supplies used or employed on said contract," within the meaning of those terms, and chargeable to the surety.
Upon entering work upon the highway, an arrangement was made by the contractor with certain merchants to furnish the workmen on the job with groceries upon orders of the contractor, to whom they were charged. Groceries were furnished upon such orders and bills therefor rendered to the contractor, who deducted the amount from the wages of the employees respectively. Held, that such groceries were supplies used and employed on said contract and proper charges against the surety on the contractor's bond.
Some of the groceries were delivered upon orders of the contractor to the foreman, whose wife carried on a cook shack on the job, where employees could obtain their meals. The cost of these groceries was deducted by the contractor, to whom they were charged, from the foreman's wages. It did not appear that any one other than workmen on the job patronized the cook shack. Held, that the supplies so furnished were proper charges against the surety.
Gasoline and oil furnished drivers of their own trucks upon coupons furnished by the contractor to the truckmen and charged against their contracts, upon an arrangement to that effect with the furnisher of such materials, which were charged to the contractor, were supplies used or employed on the contract, and the cost thereof a proper charge against the surety.
Permanent repairs constituting a betterment to trucks owned by the drivers, such as a new radiator, are not proper charges against the surety.
The purchase price of new trucks bought by the drivers for hauling gravel, guaranteed by the contractor, is not a proper charge against the surety.
Appeal from District Court, Otoe County; Begley, Judge.
Action by Edwin E. West and another against the Detroit Fidelity & Surety Company. Judgment for plaintiffs, and defendant appeals. Affirmed in part, and in part reversed and dismissed.
Burkett, Wilson, Brown & Wilson, for appellant.
Pitzer & Tyler and Lloyd E. Peterson, contra.
Heard before GOSS, C. J., DEAN, GOOD, THOMPSON, EBERLY and DAY, JJ., and CHASE and REDICK, District Judges.
Action against the surety of the subcontractor to recover for labor and material furnished in the construction of a public highway. The petition declares upon fourteen causes of action, two of which belong to the plaintiffs and the twelve others being assigned to the plaintiffs for the purpose of suit. The plaintiffs dismissed the eleventh and fourteenth causes of action, and a verdict was rendered for plaintiff against the defendant on the other twelve, upon which verdict judgment was rendered, and the defendant appeals.
The state of Nebraska and Otoe county entered into a contract with Stevens Brothers for the graveling of a certain road from Dunbar to Syracuse in Otoe county, Stevens Brothers and the Northwestern Casualty & Surety Company executed a bond to the department of public works of the state for the faithful performance of said contract. Stevens Brothers sublet the contract to the Interstate Construction Company, and the defendant, Detroit Fidelity & Surety Company, executed a bond to Stevens Brothers containing the following condition:
The bond recited the awarding of the subcontract by Stevens Brothers to the construction company, and made it a part of the bond. The original contract between the state and Stevens Brothers provided for the completion of the work by September 1, 1925, but also provided that such time might be extended by the department of public works, and the subcontract contained the following provision: "We, Stevens Brothers, agree to give any extensions of time we may receive from the department of public works to the subcontractors." Five extensions of time were granted as follows: To October 1, 1925; to December 1, 1925; to February 1, 1926; to April 1, 1926, and to June 1, 1926. The work was completed about June 1, 1926, but the claims for labor and material now held by the plaintiffs remained unpaid, and the action is brought to recover the same from the surety.
The defendant, for the reversal of the judgment, presents three grounds which we deem it necessary to consider:
1. That the petition does not show that the plaintiffs have a right to maintain the action. The point made is that under section 3224, Comp. St. 1922, providing that, in contracts for public work to which the general provisions of the mechanics' lien laws do not apply, and where the mechanics and laborers have no lien to secure the payment of their wages, and materialmen who furnish material for said work have no lien to secure payment for the material furnished in such work, a bond shall be required which shall be conditioned for the payment of all laborers and mechanics and for material used in performing the contract, and providing that such bond --plaintiffs are not within the class who may sue. The chapter containing the above section includes the mechanics' lien law, and the argument is that, inasmuch as plaintiffs are not entitled to a mechanics' lien, they have no right of action upon the bond. We think the contention unsound. The very purpose of the section in question was to protect persons who were not entitled to mechanics' liens, and this purpose would be entirely defeated if this construction were adopted. The plain intention of the legislature as expressed here will control general terms; moreover, the greater includes the less, and the right is extended to any one who claims the benefit of any provision of the chapter.
It is further contended on this point that the bond is a substitute for mechanics' liens, and that, inasmuch as the right to a mechanics' lien is not assignable (Noll v Kenneally, 37 Neb. 879, 56 N.W. 722), the right to sue upon the bond is not. Neither the case above referred to, nor any other to which our attention has been called, holds that the account which may furnish the basis for a mechanics' lien is not assignable, but merely that the assignor could not thereafter prove a lien because he had disposed of the claim and that the assignment of the debt did not have the effect to transfer a right to perfect and enforce a lien. In this case the assignment of the various claims to the plaintiffs invested them with the right to sue thereon in their own names, as provided by section 8526, Comp. St. 1922. It is well established in this state that a bond such as the one in suit is a contract made for the benefit of the parties furnishing labor and materials in performance of the principal contract, and that such persons have a right to sue thereon in their own names. Rohman v. Gaiser, 53 Neb. 474, 73 N.W. 923...
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West v. Detroit Fid. & Sur. Co.
...118 Neb. 544225 N.W. 673WEST ET AL.v.DETROIT FIDELITY & SURETY CO.No. 26593.Supreme Court of Nebraska.May 29, [225 N.W. 673]Syllabus by the Court. One who furnishes labor or supplies to a contractor for the building of a public road may maintain an action in his own name upon the surety bon......