Western Material Co. v. Enke

• Decision Date: 31 December 1929
• Docket Number: 6504.
• Parties: WESTERN MATERIAL CO. v. ENKE et al.
• Court: South Dakota Supreme Court

228 N.W. 385

56 S.D. 302

WESTERN MATERIAL CO. v. ENKE et al.

No. 6504.

Supreme Court of South Dakota

December 31, 1929

Appeal from Circuit Court, Minnehaha County; John T. Medin, Judge.

Action by the Western Material Company against H. Enke and others copartners doing business under the firm name and style of the Enke Construction Company, and another. From a judgment for plaintiff and from an order denying a new trial defendant Federal Surety Company appeals. Affirmed.

Sterling Clark & Grigsby, of Redfield, for appellant.

F. E. Ward and Hugh S. Gamble, both of Sioux Falls, for respondent.

CAMPBELL J.

In May, 1924, defendants Enke, under the name of Enke Construction Company, entered into a contract with the state of South Dakota for the performance of certain construction work on Federal Aid Project No. 164, being a part of state trunk highway No. 15 in Brookings and Moody counties, S.D. On August 11, 1924, defendant and appellant, Federal Surety Company, executed and delivered its certain bond in the penal sum of $62,973.04, guarantying the faithful performance of said construction contract. The contractor commenced his work "sometime the fore part of September, 1924," and completed the same "the fore part of June, 1925." This is the third appeal to this court in which the provisions of this identical contract and bond have been involved. See Finch v. Enke (S. D.) 222 N.W. 657; Dennis v. Enke (S. D.) 224 N.W. 925. In the Dennis Case the provisions of the bond and contract are recited in some detail, and they need not here be repeated.

At divers dates between October 6, 1924, and November 1, 1924, both dates inclusive, plaintiff furnished to defendant Enke Construction Company certain parts and repairs for a tenton Holt caterpillar tractor used in the performance of the contract in question; the aggregate value of the items so furnished being $602.78. To recover payment therefor, plaintiff instituted this action against Enke Construction Company and its surety. A jury was waived and the matter tried to the court, resulting in findings, conclusions, and judgment in favor of plaintiff for the full amount asked, from which judgment and from an order denying its motion for new trial defendant Federal Surety Company has now appealed.

Attached as an exhibit to the complaint is a detailed statement of the items furnished by respondent to Enke Construction Company. There is no dispute on the record as to the furnishing of the items or the value thereof. The statement shows that 49 different items were furnished at various dates during the period of time involved. The largest single item is under date of October 8, 1924, "1 No. 6253 Drive gear, $98.00." On October 25, 1924, there was furnished, "1 No. 6245 Countershaft, $63.40." The smallest item furnished is under date of October 6, 1924, "1 No. 16925 Intermediate Shaft Shim, $.10." In addition to the items of $98 and $63.40 above mentioned, there are 2 items between forty and fifty dollars, 1 item between thirty and forty dollars, 5 items between twenty and thirty dollars, 7 items between ten and twenty dollars. The remaining 32 items are all under $10, and of these 32 items only 15 exceed $1 in amount. Defendant Enke testified in part as follows regarding the performance of his contract on Federal Aid Project No. 164:

"*** We used upon that work a certain 10-ton Holt Caterpillar tractor. While operating this tractor upon this work we had occasion to purchase repairs or parts for said tractor. These were purchased from the Western Materials Co., Sioux Falls, S. Dak. I presume that 'Exhibit A' attached to the complaint is a list of repairs or parts purchased for this tractor on this job. *** We acquired it in 1922. We are in the road construction business, and were at that time. In that construction work we used this particular tractor that is inquired about and other tractors. We have been using them in that manner ever since we acquired them, and are still using them in road construction work, and are still using this particular Holt Caterpillar Tractor. *** Before we took the contract which is involved in this case or did any of the work under this contract, we had other jobs under contract on which we used this Holt Caterpillar tractor before we moved over there. Since we completed that contract we have had other jobs under other contracts where we have been and are now using this same tractor. That tractor is a part of our permanent equipment as contractors. *** The particular parts itemized in the bill attached to the complaint, were attached to and made a part of that tractor. I could not say whether they are still on that tractor. *** I intended them to last as long as we could make them last and to use them on other jobs as well as the one we were on at the time we bought them. A number of these parts might have been on this tractor when we ceased using it on this job in question and commenced to use it on some other job. These items are for parts replaced, parts worn out or broken. *** They were intended to last for some time. The intention was that they would last longer than this particular job we were working on. *** These parts *** were parts necessary to keep the tractor so that it would work while on this contract. *** They were necessary repairs. *** The work could not have been completed according to this contract without these repairs."

This court has had occasion in several comparatively recent cases to consider the terms and provisions of these road construction contracts and contract bonds. In Anderson Lumber Co. v. National Surety Co., 49 S.D. 235, 207 N.W 53, and in Dennis v. Enke, 224 N.W. 925, we pointed out the extremely broad scope of the surety's obligation thereunder. It is also to be noticed that the rule of strictissimi juris has no application in these cases, and the bond should be construed most strongly in favor of indemnity. Columbia County v. Consolidated Contract Co., 83 Or. 251, 163 P. 438; note, Ann. Cas. 1912B, 1087. The covenant is "to pay all just claims for materials, supplies, tools, appliances and labor, and all other just claims incurred *** in carrying out the provisions of the contract." As we have pointed out in previous decisions, the fundamental test is whether the claim in question was such a just claim "incurred in carrying out the provisions of the contract" as might "be fairly held to have been in contemplation of the parties when executing the contract and the bond therefor." In Dennis v. Enke, supra, we held, and we think rightly, that the purchase price of a secondhand tractor...