139 Ky. 92 | Ky. Ct. App. | 1910
Affirming.
The first five cases set ont above were originally, instituted in the Franklin circuit court as separate suits. Thereafter they were consolidated and heard together, and one judgment entered. The case of Federal Union Surety Company v. Commonwealth, for Use of Carrollton Brick Company, was not consolidated with the other cases. As the questions involved in the latter case are the,,same as those involved in the other five cases, we have deemed it best to consider all the cases together and discuss all the questions raised in one opinion.
On February 6, 1904, the G-eneral Assembly of the commonwealth of Kentucky passed an act entitled “An act for the erection and completion of the capítol, and other necessary buildings at the seat of government. ’ ’ Laws 1904, c. 2. By this act the commissioners of the sinking fund of the state of Kentucky were authorized as a board to carry out the provisions of the act and to erect the capitol buildings. To that end, the board was authorized and empowered to adopt plans and specifications for the construction and completion of the capitol buildings at Frankfort as it might deem best and most suitable for the accommodation of the Gfeneral Assembly and the state officials and the departments thereof, having due regard for the safety and preservation of the state records. The board was given authority to change the plans as the necessity might arise during the progress of the work. After adopting plans and specifications, the board was directed to advertise for sealed proposals for bidders for said work, or any part thereof; and the act provided that the work
“Article IY, a. Said contractor agrees to protect and save harmless the owner from any lossf, cost, or damage to it on account of any damage or injury*96 to third persons, or to property, occasioned by the act of negligence of said contractor, his servants, agents, employes or any subcontractor; and said contractor further agrees to keep said real estate■free of all mechanic’s liens, and in the event of suits against the owner on account of such act or acts of negligence, or to enforce any lien, the contractor, upon notice by the owner, will appear and defend any suit or suits and hold the owner clear of cost, Joss or expense therein; and before final payment is made the contractor shall furnish satisfactory evidence that he has paid for all materials used in the construction of said work, and satisfy the claims of all laborers and subcontractors doing work thereon.”
“Article YI. The contractor shall complete the several portions and the whole of the work embraced and comprehended in this contract and agreement within two years from this date; and, should said contractor fail so to do, it is agreed by and between the owner and said contractor that the measure of liquidated damages forfeited by the contractor to the owner aforesaid shall be two hundred dollars ($200.00) per day for each day in excess of said two years that said contract remains uncompleted, and the time of two years in which this contract is to be completed constitutes a part of the consideration therefor.”
“Article IX. It is hereby mutually agreed between the parties hereto that the sum to be paid by the owner to the contractor for said work and materials shall be eight hundred and eighty thousand ($880,000.00) dollars, subject to the additions and deductions as hereinbefore provided, and that such sum shall be paid by the owner to the contractor in current funds, and only upon the certificate of the architect, as follows:
*97 ‘ ‘ Certificates to be issued upon the first Monday of each month, throughout the progress of the work, for an amount equal to the value of the work, and materials delivered in place in the building during the preceding month, less ten (10) per cent, of said value, which shall be retained until date of final payment.
“The final payment shall be made within thirty (30) days after the completion of the work in this contract, and all payments shall be due when cer-. tifieates for the same are issued.
“If at any time there shall be evidence of any lien or claim under which, if established, the owner of the said premises might become liable, and which is chargeable to the contractor, the owner shall have the right to retain out of any payment then due, or thereafter to become due, an amount sufficient’ to completely indemnify it against such lien or claim.. Should there prove to be any such claim after all1 payments are made, the contractor shall refund to> the owner all moneys that the latter may be compelled to pay in discharging any lien on said premises made obligatory in consequence of the contract- or’s default.”
Upon the same day that the above contract was* entered into the General Supply & Construction Company and the Federal Union Surety Company, as its surety, executed and delivered to the commonwealth of Kentucky the following bond:
“Know, all men by these presents, that we, the. General Supply .and Construction Company, a corporation organized and existing under the laws of the state of New York, as principal, and the Federal Union Surety Company, a corporation organized and*98 existing under the laws of the state of Indiana, and having its principal office in the city of Indianapolis, Indiana, as surety, are held and firmly hound unto the commonwealth of Kentucky in the sum of two hundred and twenty-five thousand dollars ($225,000.00), lawful money of the United States, for the payment of which well and truly to be made to the commonwealth of Kentucky, we bind ourselves, pur successors and assigns, jointly and severally, firmly by these presents.
“Sealed with our seals and dated this fourteenth day of August, A. D. 1905.
“The conditions of this obligation is such: That whereas the said the General Supply & Construction Company has entered into a certain written contract, hereto attached, with the board of sinking fund commissioners acting for and in behalf of the commonwealth of Kentucky, bearing date the tenth (10th) day of August, A. D. 1905, for the construction of the capitol building at Frankfort, Kentucky.
“Now, if the said the General Supply and Construction Company shall well and truly fulfill all the covenants and conditions of said contract, and shall perform .all the undertakings therein stipulated by it, to be performed, and shall well and truly comply with and fulfill the conditions of, and perform all of the work and furnish all the material and labor required by any and all changes in or additions to, or omissions from said contract which may hereafter be made, and-shall perform all the undertakings stipulated by it to be performed in any and all such changes in or additions thereto, notices thereof to the said surety being hereby waived, and shall promptly make payment to all persons supplying labor or materials in the prosecution of the work, contemplated by said*99 contract, then this obligation to be void, otherwise to remain in full force and virtue.
“In testimony whereof, the General Supply and Construction Company, as principal, and the Federal Union Surety Company, as surety, have hereunto subscribed their hands and affixed their seals this fourteenth day of August, A. D. 1905. The General Supply and Construction Company, by.R. P. Taylor, president. Federal Union Surety Company, by Robert M. Nugent, Res. Vice President. Attest: May E. McCabe, Res. Asst. Secretary.”
About 10 months later the board of sinking fund commissioners deemed it desirable to make certain changes in the eapitol building. It was decided that the interior structural and ornamental work should be changed from stone to marble, and that the dome ef the building should be changed from copper to terra cotta. For the purpose of carrying out these changes, the board petitioned the General Assembly for an increase in the appropriation. On March 21, 1906, the General Assembly passed an act (Laws 1906, c. 89) entitled “An act to appropriate the additional sum of two hundred and fifty thousand dollars for the erection and completion of the eapitol and other state buildings at the seat of government now under contract and course of construction,” and appropriated the sum of $250,000 to pay for the building as altered and changed. On June 18, 1906, the board of sinking fund commissioners entered into a new contract with the General Supply and Construction Company, in which the desired changes and additions were provided for at an increased cost of $219,600. In this new contract the method of payment adopted was as follows: “Certificates shall be issued upon the first Monday of each month through
Appellee M. C. Yandiver, by contract with the general contractor, furnished the plumbing for the eapitol building. Appellee W. C. Wulff & Co., under contract with the general contractor, furnished the roofing. Appellee Joseph Elias, under contract with the general contractor, furnished the glass. Appellee Grainger. & Co., under contract with the general contractor, supplied the structural steel, cast iron and ornamental iron. • Appellee J. L. Mott Iron Works, under contract with M. C. Yandiver, furnished the plumbing. Appellee Carrollton Brick Company, under contract with the general contractor, furnished the brick. These several actions were filed by the commonwealth of Kentucky for the use and benefit of the foregoing parties against appellant Federal Union Surety Company and the General Supply & Construction Company to recover on the bond which they executed to- the commonwealth of Kentucky. The provisions of the bond whereby appellant agreed that’the General Supply & Construction Company would promptly make payment to all persons supplying labor and materials in the prosecution of the work were set’fditfi'iiythq respective petitions,, and it was charged that it wh§/the intéhtion of the par
It appears that at tbe time of tbe institution of these several actions tbe board of sinking fund commissioners bad in its bands a balance of about $78,000. By order of court this sum was distributed among tbe several claimants. Upon final bearing, judgment was rendered in favor of appellee M. C. Vandiver for tbe sum of $1,713.54, with interest. Judgment was rendered in favor of appellee W. C. Wulff & Company for $2,214.30 and interest. Judgment was rendered in favor of appellee Joseph Elias for $2,644.81 and interest. Judgment was rendered in favor of appellee Grainger & Co. for $4,275.53, and interest. No judgment against appellant was rendered in favor of J. L. Mott Iron Works, but tbe judgment provided that out of tbe amount adjudged in favor of M. C. Vandiver, the claim of J. L. Mott Iron Works for $1,380.87 and interest should be paid. A similar judgment was given in favor of tbe Ahrens & Ott Manufacturing Company for $1,189.41 and interest, payable out of tbe judgment in favor of M. C. Vandiver. Judgment was rendered in favor of appellee Carrollton Brick Company for tbe sum of
The first question we shall consider is: Was the bond in question authorized by the act of .February 6, 1901? It is true the act does not contain any provision specifically directing or authorizing the board of sinking fund commissioners to incorporate either in the'contract or bond a provision to the effect that the general contractor would.pay the laborers and materialmen. The board of sinking fund commissioners, however, was given authority to contract for the erection of the capitol. Having been given authority to make such contract, it necessarily had the right to insert in the same any reasonable covenants which the members of the board might in their wisdom deem necessary or proper in order to secure the erection of the capitol upon the best terms possible. Indeed, it was their duty to do what ordinarily prudent men would do in attending to their own business of a similar nature. If, then, the members of the board, in the exercise of the discretion conferred upon them, concluded that the work would be prosecuted with more satisfaction and would be better done by securing subcontractors, they were certainly authorized to insert in the contract or bond provisions necessary to attain the end desired. Indeed, the provision in regard to the payment of laborers and materialmen was a wise one. That subcontractors, knowing they were secure, would do better work and furnish better material than if they felt uneasy about their pay, cannot be doubted; and the credit which the contractor would thus gain by the security would
The act of 1904 provides that “every contractor for work or material to be furnished under this act, shall execute to the board a bond, conditioned for the faithful performance of his contract, with surety to be approved by the board.” By this provision, explicit authority is given to require of every contractor for work or material to be furnished a bond conditioned for the faithful performance of his contract. Having first given to the board authority to contract, and. necessarily the power to fix the terms and conditions of the contract, .and the board, by virtue of this power, having incorporated a covenant for the benefit of laborers and materialmen, it follows that the board was then authorized to require of the general contractor a bond with surety, approved by the board, for the faithful performance of the contract so made. That being true, we are of opinion that the board was fully authorized to insert in the
But it is insisted that the board was under no legal1 duty to incorporate in the bond the provision for the benefit of the laborers and materialmen, and that, therefore, the latter have no right of action on the bond. We conclude, however, that the benefit which the board and the commonwealth derived from the provision in question, and the liability of the fund in the hands of the board to be subjected to liens by the subcontractors, were sufficient to authorize the board to make the contract and bond in question for the benefit of the laborers and materialmen. Morrison v. Payton, 104 S. W. 685, 31 Ky. Law Rep. 992. Being of the opinion that the board was authorized to take the bond, and to insert therein a provision for the benefit of appellees, we have no doubt of the right of the latter to bring this action to recover on the bond, in question.
The only, other question which we deem it necessary to consider- is whether or not the changes in the building, or in the time or method of payment, or in the failure of the board to retain the balance of the funds in its hands required by the contract, released appellant from its liability on the bond in' question, so far as appellees are concerned. Without determining whether the bond covered the changes referred to, we shall proceed to a discussion of the question whether or not the act of the board in making such changes affected the rights of the appellees. It may bé con
, It is true that in a majority of the above cases there was a statute securing to laborers and material-men protection in the bonds required to be taken. This fact, however, simply furnished an additional reason for holding that the rights of laborers and materialmen could not be affected by any act of the owner of the building in making changes in the terms of the contract or in the building itself. In our opinion there is every reason why the same rule should be adhered to in the case before us. Being authorized to require a bond for the faithful performance of the contract by the contractor, and being authorized to insert in the contract any provision reasonably calculated to secure the best building at the most reasonable price, and having, under this authority, inserted the covenant for the benefit of appellees, we conclude that the rights of the latter were just as firmly fixed by the contract and bond as if the statute had directed that the contract and bond should contain the provision relied upon. After that time, the board was without authority to do any act that would release appellant so far as appellees are concerned.
In conclusion, we deem it proper to say that counsel' for appellant have cited many authorities sustain
Judgment affirmed.