293 P. 812 | Cal. Ct. App. | 1930
This is an appeal from a judgment rendered against each of the plaintiffs in the foregoing cases which were consolidated for trial. Each of the actions was based upon the claims of materialmen against a surety bond which was given to pledge the faithful performance of a subcontractor for the construction of specific parts of a building. The court held that the bond was not liable for the labor performed or the materials furnished. The judgment depends upon a construction of the bond.
The Breakers Hotel Company, a corporation, awarded a contract to construct a hotel of the same name at Long Beach to William G. Reed at a cost of about $850,000. The court found that Reed agreed to furnish and pay for all necessary labor and materials to complete the building according to the contract. Mr. Reed, as principal, and the Metropolitan Casualty Insurance Company, as surety, executed and delivered to the hotel company a bond pursuant to section
William G. Reed, the general contractor, made a subcontract with Jensen Electrical Company for the furnishing of materials and the performance of certain portions of the structure. Each plaintiff in this group of consolidated cases furnished the subcontractor, Jensen Electrical Company, with materials of substantial value which were used in the construction of the building. For the faithful performance of this subcontract an independent common-law bond was executed and delivered to Reed, the general contractor, with Jensen Electrical Company as principal and United States Fidelity and Guaranty Company as surety. This was the only bond executed by the last-mentioned surety on account of the structure. It provides in part: "Whereby the said party of the second part (the subcontractor) undertakes to furnish all necessary labor and material and to perform and complete for the said party of the first part . . . (the work contracted for) we, Jensen Electrical Co., as Principals, and the United States Fidelity and Guaranty Company, . . . as Surety, are held and firmly bound unto said William G. Reed. . . . The condition of this obligation is such that if said contract is made, and if the said contractor shall well and faithfully keep and perform all of the covenants and agreements of said contract, by them to be kept and performed, and shall turn over and deliver to said General Contractor, said improvement according to said contract, and shall save and hold harmless the said general contractor from any and all loss or damage arising out of the failure of said contractor to fulfill said contract, then the above obligation to be void; otherwise to remain in full force and effect."
The trial court rendered judgment in favor of the defendant in these consolidated cases. From this judgment the several plaintiffs have appealed.
[1] A bond which is given for the faithful performance of a contract, to which it refers, binds the surety for labor performed and materials furnished thereunder as completely as though the surety were a party to the contract. (Callan *694
v. Empire State Surety Co.,
[2] A bond which undertakes to guarantee the faithful performance of a subcontract to furnish all necessary labor and materials for a specified portion of a structure, implies a promise to pay for such labor and materials so furnished. It is unreasonable to hold the obligation is fulfilled by the mere supplying of the labor and materials. (Wheeler, Osgood Co. v.Everett Land Co.,
[3] A common-law undertaking which is furnished to a general contractor for the faithful performance of an agreement with a subcontractor for the supplying of labor and materials for a structure is not a pledge for the sole benefit of the general contractor, but inures to the benefit of any person who performs labor or furnishes materials which are used in the structure pursuant to the provisions of the subcontract. (Sunset LumberCo. v. Smith,
[4] The obligation of the respondent in the present cases to guarantee payment for labor performed and materials *695
furnished under the subcontract seems fixed and certain. The fact that these claimants may have been entitled to recover compensation from the original general surety, Metropolitan Casualty Insurance Company, does not release the respondent from the clear obligations of its contract. In the event of securing judgments against the original general surety by the claimant in this action, it would then be entitled to be subrogated to all the rights of these plaintiffs for the purpose of reimbursement, which would include the right to resort to respondent's bond to satisfy their claims. (Secs. 2848, 2849, 2854, Civ. Code;Adamson v. Paonessa,
The judgment is reversed.