246 P. 30 | Wyo. | 1926
This action was brought in Albany county by Asmus Franzen, plaintiff, hereinafter designated in the same manner, against the Southern Surety Company and others, for certain material furnished by plaintiff to Fitzgerald Brothers, a partnership. It appears that on the 1st day of June, 1922, the said partnership entered into a contract with the Highway Commission of the state for the purpose of building a portion of the Lincoln Highway in the county of Albany, for the consideration mentioned in said contract. Said contractor furnished a bond to the state of Wyoming in the principal amount of $4700, with the Southern Surety Company as surety. The bond, after reciting the foregoing contract and the proposal and specifications attached thereto, and making the same a portion of the bond, concludes:
"Now therefore, if the said principal shall well and truly perform said work in accordance with the terms of said contract, advertisement, proposal, plans and specifications, and pay for all labor and material in connection with said work, then this obligation shall be void; otherwise it shall remain in full force and effect." *19
The plaintiff herein furnished to said partnership supplies or materials of the value of $405.67, the following items of which are in dispute: First, feed, consisting of hay and grain, fed to, and consumed by, the horses that were used by said partnership in doing said work. Second, overshoes, furnished to said contractors or to some of the men on said work. Third, coal, used for the generation of power of a machine used in the construction of said road. Fourth, coal oil, evidently used for the purpose of furnishing light in the camp maintained by said partnership in connection with the construction of said road. Fifth, haulage of the foregoing items. The court disallowed all of these items and entered judgment accordingly, from which plaintiff has appealed. It appears that said partnership failed to fully perform its contract, and said surety company completed it and paid out the sum of $1428.61 in excess of the amount which it received under said contract from the state. This fact, however, seems to have no bearing on the case, inasmuch as the excess payment, together with the amount herein asked by the plaintiff, does not equal the amount of the bond, and hence we shall not give this matter any further consideration.
1. The bond herein was evidently executed pursuant to the provision of section 329, W.C.S. 1920, first passed as chapter 137 of the Session Laws of 1919. That section provides, among other things, that whenever a contract is entered into with the state, county, city, town, school district or other public corporation for the construction of any public work or improvement exceeding the contract price of $500, the contractors shall be required to execute a bond to the state or other public subdivision thereof "for the use of the same, and also for the use and benefit of all persons who may perform any work or labor or furnish any material in the execution of such contract, conditioned for the performance and completion of such *20
contract according to the terms thereof and to comply with all the requirements of law; and to pay, as they become due, all just claims for all work or labor performed and material furnished in the execution ofsuch contract." (Italics are ours.) The condition of the bond executed in the case at bar is not strictly in accordance with the provisions of the statute. The meaning of the language employed in the bond, however, is probably as broad as, if not broader than, the meaning of the language employed in the statute. In any event, the bond appears to have been given pursuant to the requirement of the statute. It must, accordingly, be construed in connection therewith. Fay v. Bankers Surety Co.,
2. Counsel for the surety company, however, argue that the statute aforesaid could not make the bonding company liable for any material except such as actually, and bodily, entered into the permanent structure and became a component part thereof, and that if it attempts to do so, it is to that extent void and unconstitutional. In support of that contention, we are only cited to the case of George Bolln Co. v. Irrigation Co.,
"So far as the city of Lockport is concerned, there can, of course, be no question as to the right and duty of the law-making department of the state to incorporate into the charter, which is its fundamental law, such provisions as will adequately protect the municipality itself * * * but I think it may go much further than that, and provide a means by which the individual members of the municipality itself, and all other persons, may be protected in their rights. The very "municipal lien law" to which reference has already been made is an instance in point, where to a certain class of men, is furnished an easy and inexpensive remedy for the recovery of their just claims, which was not available to them prior to its enactment, and the means provided by the Lockport charter is simply more direct and easy of attainment. * * * It would seem, therefore, that when it incorporated the provisions of section 207 into the charter of the City of Lockport, the legislature not only did not transcend the limits of its authority, but that it provided an easy, suitable and inexpensive method by which a certain class of creditors could obtain their pay of a party to whom a contract for city improvement had been awarded." *23
The specific point raised in the case at bar by counsel for the surety company has not, perhaps, been directly raised before, but is substantially disposed of by the case last cited. Further, there are numerous cases, as will be shown hereafter, in which items, such as are sued for in the case at bar, have been held protected under statutes, and bonds in conformity therewith, and no question was raised as to the constitutionality of such statutes or the validity of such bonds. We think that the foregoing contention of counsel for the surety company cannot be sustained.
3. We must, accordingly, determine whether the items disallowed by the court should have been allowed under the provisions of the statute above set forth and under the bond executed in conformity therewith. The case is one of first impression in this state. Many cases like it are apt to arise in the future and we have felt constrained, in order to arrive at a just and proper conclusion, to make a rather exhaustive investigation of the authorities on the subject. We might say, at the outset, that perhaps most of the cases construing mechanic's lien laws have held that materials of the character furnished in the case at bar, or as discussed herein, do not, inasmuch as they do not directly become a component part of a structure or improvement, give rise to a lien under such laws. Notes to 15 L.R.A.N.S. 509, 16 L.R.A.N.S. 585, 31 L.R.A.N.S. 746, 30 L.R.A.N.S. 85, 44 L.R.A.N.S. 311, 42 L.R.A.N.S. 872, 51 L.R.A.N.S. 1040, L.R.A. 1915E 986, 27 Cyc. 45, 46, 47. We should first of all, accordingly, determine as to whether or not the right of recovery, under section 329, supra, is, as claimed by counsel for the surety company, limited to those items which would be lienable under the mechanic's lien laws of the state. It cannot be denied that some of the courts, particularly those of Pennsylvania, Vermont, Wisconsin and Arkansas, have made this limitation. Other cases, on the contrary, have construed *24
such statutes, and the bonds in conformity therewith, according to their natural meaning, and have allowed recovery for all labor and material coming within the meaning and contemplation of the statute and the bond. In this connection we might mention the fact that the Supreme Court of Washington has held that there is a difference in the meaning of "supplies" and "material;" that the latter is such as becomes an actually component part of a structure. Mitchell v. Berlin-McNitt Co.,
"If literally construed, the obligation of the bond might be limited to secure only persons supplying labor or materials directly to the contractor, for which he would be personally liable, but we must not overlook, in construing this obligation, the manifest purpose of the statute to require that material and labor actually contributed to the construction of the public building shall be paid for and to provide a security to that end."
In Sherman v. American Surety Co., supra, it was said:
"It would be inequitable to subject an owner of property to a lien for that which did not enter into and become a part of such property. Hence, in construing mechanic's lien statutes, they are generally held to cover only what has been incorporated into the substance of, and added to the value of, the property against which the lien is asserted. * * * In American Surety Co. v. Lawrenceville *26 Cement Co., 110 Fed. 717, the court, in construing a bond given pursuant to the provisions of the section, said:
`The underlying equity of the lien statutes relates to a direct addition to the substance of the subject matter, * * * building or other thing to which the lien attaches, while the statute in question concerns every approximate relation of the contractor to that which he has contracted to do. Plainly, the act of Congress and the bond in the case at bar are susceptible of a more liberal construction than the lien statutes referred to.'"
So, too, it was said in City of Portland v. O'Neal,
In the case at bar there is nothing to indicate that the legislature intended by section 329, supra, to limit the labor and material furnished in connection with a contract to such as would be lienable under the mechanic's lien statutes. The statute passed in 1909, which was in part declared unconstitutional in George Bolln Co. v. Irrigation Co., supra, clearly intended the bond therein required to go beyond the requirements of mechanic's lien statutes. While we cannot say that that statute indicates that section 329, W.C.S. 1920, supra, also goes beyond the requirements of the mechanic's lien laws, particularly since the reading of the two statutes is dissimilar, yet it shows that it cannot be said that the legislature had the limitations of the mechanic's lien laws in mind, when it enacted section 329, supra. In other words, we are compelled, we think, to construe section 329, supra, in the light of its own language, bearing in mind the ultimate and beneficial purpose for which the law was designed. 29 C.J. 611. While the surety company cannot be held *27 liable beyond the terms of the bond, executed pursuant to the statute, yet it should be held liable for any breach fairly coming within the terms thereof. 29 C.J. 612.
4. Broadly speaking, and giving a natural meaning to the language used, labor and material furnished "in the execution of a contract" includes, we think, all labor and material which contributes directly or indirectly to the completion of the work. Machinery, horses and material of every kind, whether owned by the contractor or not, but used for the purpose of completing the contract, contributes thereto. Yet, as has been stated by some of the courts, there must be some limit to the liability of a surety company. It would, clearly, be unfair, to hold such company liable for material that is neither proper nor necessary in connection with the work to be performed, and it would seem further that no liability ought to exist for items which cannot be fairly said to have been in contemplation of the parties at the time of the execution of the bond. Thus it has been held that it is the labor and material supplied for the execution of the work which is protected, and not some obligation incurred by the contractor which does not approximate the construction contracted to be done. City of Portland v. O'Neal,
"Its purpose (that of the statute) was to afford protection to those whose labor performed the work under contract and to those who furnished material which entered into and became a part of, or was naturally consumed in or about the completion of, the work in question. That, however, is as far as its provisions go. Its terms are not broad enough under any reasonable construction to cover tools and implements. Unless the liability under the bond was almost unlimited, it would be unfair to those who furnished labor and material legitimately and naturally entering into the construction of a given piece of work, that the liability under the bond should be employed for paying for tools and materials which perhaps might be used upon a hundred contracts. If plaintiff's contention in this case is correct, that the defendant became liable to pay for hand shovels used in and about the work, there is no reason why it would not have been liable if the contractor *29 had seen fit, instead of purchasing a few hand shovels, to secure a steam shovel costing many hundreds of dollars."
And in Nye-Schneider-Fowler Co. v. Bridges, Hoye Co., supra, where it was contended that all parties becoming creditors of a contractor were protected under a bond like that in the case at bar, the court, in denying such claim, and in speaking of the plant or outfit of a contractor, said:
"If the contractor whose business was to take such contracts from time to time should, while engaged in this particular work, purchase wagons with which to deliver his material, with the expectation of using them similarly in other works for years afterwards, the bill for such wagons might in some sense, perhaps, be said to be in connection with this contract, but surely not within the contemplation of the parties."
In fact it is said in Kansas City v. Youmans, supra, approved in Standard Boiler Works v. National Surety Co.,
"The surety company entered into this obligation with regard to the ordinary matters which concerned, or were connected with, the performance of the contract. The bond is to secure the performance of the contract, and not the performance of any duties outside the contract, though incidentally connected with it. The borrowing of money to carry out the contract is not a matter which it can be assumed the parties had in contemplation in the execution of the instrument."
(d) The rule as to cost of transportation is not yet as clear as might be wished. It has been held by some courts, which have had occasion to pass upon the point, that a railroad company will not have any claim under such bond, mainly for the reason that it has an independent lien which it may readily assert, and because it cannot be said that payment for such item was in contemplation of the parties when the bond was executed. United States v. Hyatt, 92 Fed. 442, 34 C.C.A. 445; Wisconsin Brick Co. v. Railway Co.,
(g.h.i.) We now come to the consideration of the largest item included in the bill in the case at bar, namely that of feed for the horses used in the performance of the contract. This feed is akin, at least, to fuel and lubricants furnished for machinery — a point, too, involved in the case at bar — and to board furnished for men. Board and lodging is not ordinarily allowed under mechanics lien statutes. 27 Cyc. 44. And so it has been held in some instances in an action on a bond that it is an item not recoverable under the circumstances disclosed in the particular case. Some of the cases disallow such item, on the theory that it was not within the contemplation of the bond furnished by the bonding company. U.S. v. Kimpland, 93 Fed. 403; Mitchel v. Berlin-McNitt Co.,
"In the ultimate analysis there is no difference in principle, whether draying is done by horses and wagons or by automobile trucks; whether grading is done by horses and scrapers or by traction engine and steam paddies. One and all are in their essence but tools and machinery."
True, the feed furnished to horses or mules, while furnishing power, at the same time also preserves the lives of these animals, but we think that this should be considered incidental to the main purpose for which, in such case, the feed is furnished. *35
There is some diversity of opinion among the courts as to whether or not the expense of fuel and other similar material, like lubricants, are lienable items. The majority of courts apparently take a view that they are not. See notes 36 L.R.A.N.S. 866, and L.R.A. 1915E 986. Some courts also take the view that the cost of such material may not be recovered under a bond similar to that in the case at bar. U.S. etc. v. City Trust etc. Co.,
"The labor expended by men in wheeling barrows of material from the point of receipt to the place where it is to be used; in working hand pumps to clear an excavation of water; in turning the cranks of a hoisting derrick, so as to raise materials to a proper elevation — all such labor is so manifestly labor in the prosecution of the work that no one could have the hardihood to contend that it is not within the express terms of the statute. If the contractor, whether for purposes of economy or of expedition, elects to do this work by the power of steam, instead of the power of human muscles, it is difficult to understand how it can be logically contended that such power is not supplied in the prosecution of the work, or that the cost of the coal which produces it should not be equally within the protection of the same statute." *37
We come then directly to the point as to whether or not the cost of the feed furnished to the horses in the case at bar may be recovered. We find that only three cases directly hold that it cannot be. Fay v. Bankers Surety Co.,
"Teams brought together for such work are more naturally classified with implements than with workmen, and feed for the teams so employed with fuel for power than with the board of men whom the circumstances of employment leave free to exercise an independent choice. It is said that it would have been necessary to feed the teams whether they were working or not, but that is not the test, as is shown by Brogan v. National Surety Company."
In the case of Federal Paving Co. v. Raschka, supra, the court said simply:
"It is apparent that such feed was material furnished for the purpose of carrying forward, performing and completing the contract, and that as such it is clearly covered by the conditions of the bond."
In National Surety Co. v. Lumber Co., supra, the court said:
"Such things do not enter into and become a physical part of the finished structure as materials do, as that word is generally construed, but they do become as much a part of the structure as the labor which is performed upon it. It seems quite clear to us that coal, horse feed and work performed by the teams all come within the terms of the prescribed statutory provisions of the bond, which becomes the measure of the rights of the several claimants."
In U.S. Fidelity Guaranty Co. v. Henderson Co., supra, the court, in upholding a claim of this character, said: *39
"It is a principle of universal application that statutes, such as the one governing bonds like this, are to receive a liberal interpretation. Furthermore, the wording of the contract, secured by the bond, towit — "materials that are required to complete the work indicated," is broader than the rule contended for by plaintiff in error, that the right to recover for materials furnished is limited to those materials that actually enter into the construction. Rather it is broad enough to cover all materials that are required to complete the work — that is helpful, needful and the like."
We think that the rule last mentioned is the rule in keeping with the intent of the statute, of the contract and of the bond. Coal or gasoline that generates power is transformed into labor, and should be within the spirit of the statute just as much so as labor performed by hand. That is true also in case feed is furnished to horses. The work performed by the machinery, for which the coal was used, and by the horses in this case, might have been performed by the hands of men. But that was not deemed feasible and would have been too expensive. Yet, if that had been done, there would have been no question that the expense thereof would have been covered by the bond herein given. And it seems to us that where the labor is done by more efficient means, it would be a narrow construction of the statute and of the bond to say that the material furnished in order to put this efficiency into operation, is not material contemplated by the statute or the bond. All this material was clearly furnished in the execution of the contract. It was not furnished for any other purpose. It was necessary and proper and materially aided in doing the work, and was, we think, clearly contemplated when the bond was executed. We think, in short, that where labor or material furnished is necessary or even proper, for the execution of any particular work, under a contract like that in the case at bar, and the furnishing *40 of such labor and material may be fairly held to have been in contemplation of the parties when executing the contract and the bond therefor, and the same is of a nature so as to be necessarily wholly consumed in the particular work, then it is protected under a contract and bond like those in the case at bar. We can find no justification for reading into the statute that material furnished must be bodily incorporated in and made an integral, component part of the finished structure, before the payment therefor is protected under a bond given in pursuance of such statute. To do so would, we think, be wholly unwarranted by the language used, and would do violence to it. Particularly is this conclusion true if we place, as we should, a fairly liberal construction upon the statute, though we think that the natural, ordinary meaning of the language used leads to the same result. It may be thought that this holding will lead to great difficulties, particularly in connection with subcontractors. But we do not think so. A contractor need not pay his subcontractor, or a subcontractor a contractor under him, until the items for the payment of which he is responsible, are paid, and further, as was said in United States v. American Surety Co., supra:
"It is easy for the contractor to see to it that he and his surety are secured against loss by requiring those with whom he deals to give security by bond, or otherwise, for the payment of such persons as furnish work or labor to go into the structure."
And a like principle would obtain in case of subcontractors in turn dealing with contractors under them. And a further safeguard is provided by section 332, W.C.S. 1920, which requires a notice to be given to the contractor and his sureties of the amount and nature of a claim within ninety days after furnishing the last item of material or performing the last item of work. *41
We think it follows from what we have said that the item of overshoes, included in plaintiff's bill, cannot be allowed, because the payment thereof was not in contemplation of the parties when the bond was executed and because such material was not necessarily wholly consumed in the performance of the contract, but might long survive it. We are unable to determine as to whether liability exists for the item included in the bill under the general term "supplies," since the record fails to show its use or purpose. We think the item for coal oil should be allowed, if found to have been necessarily used in the contractor's camp for the purpose of supplying light, or for some other purpose in connection with, and aiding in, the performance of the contract herein, and that the items for haulage and feed for the horses, as well as the coal, should also be allowed. The judgment of the court below is accordingly reversed, and the cause remanded for a new trial. It is so ordered.
Reversed and remanded.
POTTER, C.J., and KIMBALL, J., concur.