187 Iowa 930 | Iowa | 1919
1. Counsel for appellant state that, as the appeal will be presented, the sole issue is this: Is the defendant Chicago Bonding & Surety Company liable to the plaintiff for the value of building materials furnished by plaintiff to the contractor, and used in the construction of the school building, by virtue of the bond furnished by said surety company to the school district? Errors are assigned by appellant, and they are that the trial court erred in holding that there was no privity between plaintiff and the bonding company; in holding that the bond was not given for the benefit of the plaintiff; in holding that there was no requirement of the bond or contract upon which plaintiff could base a claim for payment; and in dismissing the petition. The material part of the contract between the contractor and the school district is as follows:
“This agreement ' * * * witnesseth: That the said
“And said first party also do agree to find, provide and furnish all labor and materials of such kinds, qualities and descriptions, as shall be fit, proper and sufficient for completing and finishing all the work or works mentioned (provided that possession of the premises be given to the contractor), on or before June 15, 1915, and completing the building on or before October 15, 1915. Time to be extended only in case of general strike, alterations, fire or unusual action of elements.
“And the second parties for and in consideration of the first party completely and faithfully executing the aforesaid work, and furnishing all the materials therefor, so as fully to carry out this contract, and the design, according to its true spirit, meaning and intent, and by and at the times mentioned, and to the full and complete satisfaction of Morrison & Thome superintendent do we hereby agree to pay to said party the sum of fifteen thousand seven hundred and eighty-three ($15,783.00)' dollars, lawful money of the United States on certificates of superintendent, from time to time, as the work progresses, to wit: 85 per cent of the estimated value of the same, subjected to additions and reductions, as hereinafter provided, and the remainder
“It is agreed by the parties that fifteen per cent of the contract price shall be held by the owner as security for the faithful completion of the work, and may be applied, under the direction of the superintendent, in the liquidation of any damages under this contract; furnishing to the owner a release from any liens or right of lien, also a sworn statement, as required by law, before commencing work on this contract and hereby acknowledges receipt of notice to furnish same. * * *
“In witness whereof: The said parties have hereunto set their hands and seal the 4th day and year first above written.
“Oskar Knutson, (Seal)
“In presence of ' “J. Wilbur Anderson, (Seal)
“J. Cample W. Morrison “J. E. Sandiland. (Seal)”
It appears that a printed form of contract was used, and its blanks filled in. At the top of this form, the following appears in print:
“Copyrighted. For sale by Eugene Dietzgen Co. Chicago, New York, San Francisco, New Orleans, Pittsburg, Toronto.”
Appellees contend that this has a bearing on the construction of the contract; that the form is one in use in other states and Canada, and evidently refers to some requirement in the laws of some place other than Iowa; that the contractor must furnish some kind of a sworn statement to the owner “before commencing work on the contract.” The bond given by the contractor and surety company follows:
“Know All Men By These Presents: That we Oskar Knutson, of the city of Des Moines, and state of Iowa, as principal, and the Chicago Bonding and Surety Company, as surety, are held and firmly bound unto the Independent
“The condition of the above obligation is such that whereas the above-named Oskar Knutson has this day entered into a contract with the above mentioned Independent School District for the erection of a public school in the said town .of Bussey, Iowa. Now therefore if the said Oskar Knutson shall well and faithfully perform and keep all the conditions of said contract on his part to be kept and performed, and shall well and truly protect the interests of the said Independent School District, then this bond to be void, otherwise to remain in full force and effect.
“Witness our hands this 4th day of June, 1915.
“Signed by Oskar Knutson,
(Corporate Seal) “Chicago Bonding and Surety Co.,
“By Fred S. Young, Attorney in Fact.”
Thereafter, and pursuant to agreement between the contractor, Knutson, the plaintiff furnished lumber and mill work which was used in the construction of the school building, only a part of which has been paid. The contractor abandoned the work, and the district, under proper certificate of the architect, completed the building, and charged the expense thereof against the funds in his hands. This action is brought to establish plaintiff’s claim against funds alleged to be yet in the hands of the district, as provided by Code Section 3103, and to enforce payment by the Bonding Company of the balance of its account, on the theory that the original contract between the district and the contractor required the contractor to provide for the payment of materialmen, and that the Bonding Company had obligated itself to plaintiff in such sums as should be found due and unpaid, after exhausting the funds in the hands of the district. The trial court did establish and allow plaintiff’s
As before indicated, the printed contract seems not to have been drawn or prepared with reference to the Iowa law. It seems to us there could be no liens before any work was commenced, and that the furnishing of releases of actual liens before commencing any work would be impossible; and this would be true of a right to a lien in most cases. A materialman could not acquire a right to a lien before he furnished any material. Appellees dispute appellant’s second claim, just referred to, as to the alleged filing of plaintiff’s claim. It seems that plaintiff did file a claim, but there was some question as to whether it was sworn to. It seems that the trial court permitted plaintiff to amend at the trial in this respect, but without prejudice to other parties. We think the court was right in this. There
2. It is doubtless true, as contended by appellant, that, under Section 3167 of the Code, plaintiff would have the right, though not named in the bond, to sue thereon, if the bond covers plaintiff’s claim, and was intended for the security of plaintiff. Appellant’s real contention is, as they state it, that, where the contract and bond involved, fairly construed, show an obligation on the part of the contractor to pay the subcontractor for material furnished, the subcontractor may sue and recover on the bond. On this they cite Baker & Co. v. Bryan, 64 Iowa 561; Jordan v. Kavanaugh, 63 Iowa 152; Haakinson & B. Co. v. McPherson, 182 Iowa 476. The Baker and Jordan cases are discussed in the Haakinson case, as are other cases. It depends upon the construction of the contract. The Haakinson case was decided on demurrer. In that case, the contract provided that the plans and specifications were a part of the contract. The specifications provided that the successful bidder should furnish a bond, drawn to protect the county, and any subcontractor. The instructions to bidders contained a similar provision. The plaintiff in that case submitted his bid and agreed to furnish such a bond. The bond provided that its principal, the contractor, should discharge the duties and obligations assumed in the contract. One of these obligations was that the contractor should pay the subcontractor. It was held that the only reasonable construction of the entire agreement was that the subcon
“It will be observed that the contract merely required Weaver to provide materials and perform the labor, but contains no stipulation in relation to the payment therefor by him. A condition for compliance therewith imposed on' the bondsmen no liability to the subcontractors. Noyes v. Granger, 51 Iowa 227; Puget Sound Brick, etc., Co. v. School Dist., 12 Wash. 118 (40 Pac. 608). The bond exacted, first, the erection of the building in compliance with the contract, and its ‘delivery free from any liens or claims of any kind.’ As no liens or claims might be asserted against the building, the sureties were safe in pledging that it should be without them. Charnock v. District Twp. of Colfax, 51 Iowa 70. Certainly, an agreement to discharge them cannot be implied from a contract that a building shall be delivered clear of liens and claims, and it' is inferred therefrom that payment shall be made of claims which could in no event be asserted against the building. * * * Neither the bond nor the contract in suit exacts of the contractor payment of labor or materials used in the building, * * * A careful reading of the bond leads to the inevitable conclusion that the sole .object had in its execution was the indemnity of the school district. Not having been executed for the benefit of the labor and materialmen, they cannot recover thereon.”
In the Hipwell case, supra, the contract provided that the contractor should promptly pay for all labor and ma
We reach the conclusion that the object in the execution of the bond in question was the indemnity of the school district, and that it was not executed for the benefit of the plaintiff. This being so, plaintiff may not recover on the bond. — Affirmed.