Wiss v. Royal Indemnity Company

• Decision Date: 02 March 1926
• Citation: 282 S.W. 164,219 Mo.App. 568
• Parties: JOSEPH H. WISS, Respondent, v. ROYAL INDEMNITY COMPANY, Appellant.
• Court: Missouri Court of Appeals

282 S.W. 164

219 Mo.App. 568

JOSEPH H. WISS, Respondent, v. ROYAL INDEMNITY COMPANY, Appellant.

Court of Appeals of Missouri, St. Louis

March 2, 1926

Appeal from the Circuit Court of Lewis County.--Hon. J. A. Cooley Judge.

REVERSED.

Judgment reversed.

H. S Rouse and C. H. Dickey, for appellant.

The sole point relied upon by the appellant is that the items set out in plaintiff's and respondent's "Exhibit C" do not fall within the contemplation of the bond in this case and are not such items for which there can be a recovery on the bond. The court is not precluded from applying to guaranty contracts the rules and tests applied to other contracts in endeavoring to ascertain the real meaning of the language. Kansas City ex rel. Brick Co. v Youmans, 213 Mo. 151; Builders Supply Co. v. Construction Co., 204 Mo.App. 87; Railroad v. Surety Co., 203 Mo.App. 148. In the event the contract and bond were not broader than the statute, it would be necessary for the evidence to disclose that the material was used in the work of constructing a sewer. Hill v. Construction Co., 202 Mo.App. 672. Cases relied on by the appellant to support the proposition that the items sued for herein are not within the contemplation of the bond, are the following: McKinnon v. Red River Lumber Co., 138 N.W. 781; George H. Sampson v. Commonwealth et al., 88 N.E. 911; Fay v. Bankers Surety Co., 147 N.W. 359; City of Alpena v. Title Guaranty & Surety Co. et al., 134 N.W. 23; City of Philadelphia, to use of Taylor, v. Malone, 63 A. 539; Standard Oil Co. v. City Trust Safe Deposit & Surety Co., 30 Wash. L. R. 778; Ferguson v. Despo, 34 N.E. 575; Luttrell v. Knoxville, I. & J. R. Co., 105 S.W. 565; Penn. v. Mehaffey, 80 N.E. 177; Dudley v. Toledo, 32 N.W. 884; United States v. Fidelity & D. Co., 169 Ill.App. 1; Parkinson v. Alexander, 14 P. 466; St. Louis W. & W. R. Co. v. Ritz, 1 P. 27; United States, use of Sica, v. Kimpland, 93 F. 403; Armour & Co. v. Western Constr. Co., 78 P. 1106; Perrault v. Show, 38 A. 724; R. Hass Electric & Mfg. Co. v. Springfield Amusement Park Co., 86 N.E. 248; Van Horn Trading Co. v. Day, 148 S.W. 1129.

Barker Davis for respondents.

(1) A contract between two parties on a valid consideration may be enforced by a third party, when entered into for his benefit, is well-settled law in this State. City of St. Louis to use of Glencoe Lime and Cement Company v. Von Puhl et al., 133 Mo. 561; LaCrosse Lumber Co. v. Schwartz, 163 Mo.App. 659; State to use of Hubbard and Moffat Co. v. Cochrane, 175 S.W. 599. (2) The rule of law that a surety is a favorite of the law, and that a claim against him is strictissimi juris has no application where a bond like the one in suit is executed by a surety for a compensation, and where the surety is organized as the present defendant and appellant is for the purpose of executing such bonds for hire and for a profit. Such undertakings must be construed strongly in favor of the obligee. Dorr v. Bankers Surety Co., 218 S.W. 398; School District of Caruthersville v. McClure et al., 224 S.W. 831; Lakeland v. Renshaw et al., 256 Mo. 133; M. K. & T. R. R. Co. v. American Surety Co., 236 S.W. 657. (3) The character of the bond, as to whether statutory or common law, has nothing to do with the strictissimi juris rule of construction. The rule is to get the intent of the parties under the usual rules of construction. School District of Caruthersville v. McClure et al., 224 S.W. 831. (4) Appellant cites and sets out section 1040, Revised Statutes 1919, being the general statute applicable to contractors' bonds on public works, but fails to cite or mention section 10898, Revised Statutes 1919, which is a statute covering contractors' bonds on State Highway Projects, and which provides that such bond shall be conditioned for the faithful performance of the contract according to the plans and specifications and the payment for all material and labor furnished and performed in the completion of said contract, and giving the right of action to materialmen and laborers for material furnished and labor performed under said bond. Section 10898, Revised Statutes 1919. The above section, 10898, was effective to December 31, 1922, on projects approved under said section. Section 2, page 133, Laws of Missouri, 1921, First Extra Session. (5) Appellant contends that the bond in the case at issue is not broader than the statute and hence under the Missouri ruling it would be necessary for plaintiff to show the material sued for actually entered into the construction of the road, citing in support of such contention the case of Hill v. Construction Co., 202 Mo.App. 672. The case cited does not support appellant's contention, but on the contrary is against his contention in that said case held coal used in engines to haul material a proper charge against the bond under provisions of a bond which respondent submits is not as broad as the one in this case at issue. It is also held in this case that contract and bond can be broader than that required by statute in this State. Hilton v. Universal Construction Co. et al., 216 S.W. 1034. (6) Feed furnished to a contractor under bond providing for prompt payment to all persons supplying labor and materials in the prosecution of a public work, was held properly chargeable to the bond in United States for use of Samuel Hastings Co. v. Lowrance et al., 252 F. 122, 164 C. C. A. 234. Groceries and provisions furnished to a contractor on public work and used by him in feeding men employed on the work in his camp, held properly chargeable to bond in Brogan v. National Surety Co., 246 U.S. 257, 38 S.Ct. 250. Other Federal cases, holding the bond chargeable for materials, which did not show in the resulting permanent structure are American Surety Co. v. Lawrenceville Cement Co. (C. C.) 110 F. 717; City, etc., Trust Co. v. United States, 147 F. 155, 77 C. C. A. 397; Title Guaranty & Trust Co. v. Engine Works, 163 F. 168, 89 C. C. A. 618; affirmed in U. S. Supreme Court; Title Guaranty & Trust Co. v. Crane Co., 219 U.S. 24, 31 S.Ct. 140, 55 L.Ed. 72; United States v. Illinois Surety Co., 226 F. 653, 141 C. C. A. 409; United States Fidelity Co. v. Bartlett, 231 U.S. 237, 34 S.Ct. 88, 58 L.Ed. 200. The foregoing Federal cases, are cited and approved by the Kansas City Court of Appeals in passing upon an action brought upon a contractor's bond. Kansas City to use of Missouri Pacific Railway Co. v. Southern Surety Co., 219 S.W. 727. (7) When parties execute a statutory bond they are chargeable with notice of all provisions of the statute relating to their obligation, and those provisions are to be read into the bond as its terms and conditions. These provisions are a part of the bond of which both principal and surety must take notice. Fogarty et al. v. Davis et al., 264 S.W. 879; Zellars v. National Surety Co., 210 Mo. 92. (8) The word, "construction," as used in the contract and bond in the case at issue, in view of the holdings in the hereinbefore cited cases, should be given its ordinary and usual meaning and application, which is defined as the "act of building." The word "furnish," as used in the contract and bond in the case at issue, should be given its ordinary and usual meaning and application, which is defined as "to supply with what is requisite." Webster's Dictionary.

BECKER, J. Daues P. J., and Nipper, J., concur.

OPINION

BECKER, J.--

This is an action brought by plaintiff below against the defendant, Royal Indemnity Company, as surety on a contractor's bond for hay, oats and salt sold and delivered to a subcontractor as feed for his horses and mules used in the work of grading and hauling materials in the construction of a road. A judgment resulted for plaintiff and the defendant appeals.

The sole assignment of error is that since it is conceded that the account sued on was solely for hay, oats and salt that was sold and delivered to subcontractors which was used by them in feeding the horses and mules used by them on the work of constructing a road under a contract with the Missouri State Highway Commission, that such items do not, as a matter of law, fall within the terms of the bond and therefore no recovery for such items can be had against the surety on the bond.

The Missouri State Highway Commission entered into a written contract with O. J. Hanick for the construction of a gravel highway in Lewis county, Missouri, designated as project No. 38.

At the time of the execution of said contract a bond was given to the Missouri State Highway Commission signed by Hanick as principal and the Royal Indemnity Company as surety, conditioned among other things for the faithful performance of the terms and conditions of said contract, and that the principal and surety "shall pay all lawful claims for materials furnished or labor performed in the construction of said highway. . . ." It may be well to note that the contract among other things provides that the contractor is required to provide all necessary machinery, tools, apparatus and other means of construction.

The firm of Thompson & McDaniel was engaged in the construction of the project No. 38 in question as subcontractors under Hanick and the hay, grain and salt making up the items of the account herein sued upon were fed to the horses and mules belonging to said subcontractors while said horses and mules were being used in grading and hauling work on said highway.

Appellant contends that the bond in question is a common-law bond because not taken to the State, county, city, township, school or road district as provided by section 1040, Revised Statutes of Missouri, 1919, but is taken in the name of and to the Missouri State Highway Commission, "which is a municipal corporation with power to sue and be sued and to...