152 S.E. 860 | W. Va. | 1930
The question here presented is whether the surety on a state road contractor's bond is liable for the purchase price of three trucks bought by the contractor and used by him in building the road. The question was mooted in Hicks v. Randich,
Wright Hays gave the state a bond in the penal sum of $64,502, with Fidelity Casualty Company of New York as surety, conditioned that they would comply with the terms and conditions of a contract to build a state road in Raleigh county (assigned to them by Keathley), "and shall well and truly pay all and every person furnishing material or performing labor in and about the construction of said roadway, all and every sum or sums of money due him, them, or any of them, for all such labor and materials for which the contractor is liable." This bond was dated November 1, 1927, and the contract to which it was attached and made a part thereof was dated October 24, 1927. The contract price of the *69 road construction was $129,003.90. Section 25, c. 43, Code, requires the state road commission to take from the successful bidder a bond with sufficient surety in such amount as the Commission may require, not to exceed one-half of the contract price. The penalty of the bond was $64,502, or one-half of the contract price. The bond was given in pursuance of said section 25, c. 43, Code.
About the last of February, 1928, the road contractors purchased from Morton Motor Company (plaintiff) three trucks for the aggregate sum of $5,150, of which $350 was paid in. cash, and the balance to be paid in installments, title being retained by the seller by a conditional sales contract. On September 12, 1928, plaintiff repossessed the trucks by virtue of the conditional contract and resold them at public auction for $600, leaving a balance due it, after crediting payments, of $3,067, including interest; and this suit in equity was begun in which plaintiff charges that the surety on the road bond is liable to it for said balance. The surety company demurred to the bill; the lower court overruled the same, and certified its ruling for review.
Looking to the contract and the bond which is made a part of it, and section 25, c. 43, Code, it is clear that the bond does not make the principal and surety liable for the price of machinery or equipment purchased by the contractor. The bond provides that the contractor shall well and truly pay all and every person furnishing material or performing labor in and about the construction of said roadway. Machinery is not "material or labor." United States Rubber Co. v. EngineeringCo. and American Bonding Co. of Baltimore,
Should said section 12, c. 75, Code, be considered as a part of this bond and construed so as to extend its protection, not only to materialmen and laborers, but also to the sellers of machinery and equipment? Look to section 25 of the Road Law (chapter 43, Code). It requires the contractor to execute a contract in form, terms, and conditions approved by the road commission, and to execute a good surety or collateral bond in such amount as the commission shall require not to exceed one-half of the contract price. The condition of that bond is not prescribed by the statute. Wide discretion is given the commission in the terms of the bond, not only as to the penal sum (not to exceed one-half of the contract price), but also as to the conditions, nonperformance of which will make the principal and surety liable. The condition of this bond is that the contractor shall well and truly perform the contract according to the terms and specifications, and also that the contractor shall well and truly pay all and every person furnishing material or performing labor on the roadway. We do not think it was in the contemplation of the parties that the bond so worded was intended to protect the seller of machinery and equipment to the contractor; nor do we think that under the two statutes mentioned it was the intention of the lawmakers to require a bond from the contractor of a public structure to cover the purchase price of his machinery, *71
tools, and equipment which do not go into the structure and become a part of it. Royal Indemnity Co. v. Day, etc.,
The ruling of the trial chancellor is reversed, the demurrer of the surety sustained, and we so answer the question certified.
Ruling reversed. *73