8 N.W.2d 192 | Neb. | 1943
The plaintiff, construction contractors, brought this action against the National Casualty Company, surety on a bond, the conditions of which are hereafter set forth, for certain obligations incurred by the contractor, Roadmix Construction Company, in the performance of a road construction contract made by and between the Roadmix Company and the state of Nebraska. The claims of the plaintiff against the surety involved in the action are for obligations owed by the Roadmix company to plaintiff, consisting of rental charges for contractor’s equipment supplied by plaintiff, and used in carrying on the work of the contract; cost of transportation of the plaintiff’s rented equipment to and from the job; a fee for supervisory services rendered by plaintiff in the performance of the job pursuant to contract between plaintiff and the Roadmix company. Jury waived, case tried to the court. The court found in favor of the plaintiff and awarded judgment for $6,311.69 and interest. Motion for a new trial overruled. The defendant appeals.
To eliminate confusion, the plaintiff will be hereinafter referred to as Kiewit, the National Casualty Company as surety, and the Roadmix Construction Company as Road-mix.
On June 11, 1938, the contract between Roadmix and the department of roads and irrigation was entered into. It provided in part as follows:
“Party of the second part (Roadmix) further agrees to pay all just claims for material, supplies, tools, machinery and labor, and all other just claims filed against him or any of his subcontractors in carrying out the provisions of this contract and further agrees that the contractor’s bond shall be held to cover all such claims.” Roadmix “further agrees to perform the work under the direct supervision of the Department of Roads and Irrigation, subject to inspection at all times by the Secretary of Agriculture of the United States, or his authorized agents, and in accordance with the laws of the State of Nebraska.” The consideration
“That it is mutually understood and agreed by parties hereto that the general and detailed plans, the Standard Specifications for Highway Construction” and the contractor’s bond are a part of the contract.
The bond provided in part:
“Now therefore, if said Roadmix Construction Corporation as principal shall in all respects fulfil this said contract according to the terms and the tenor thereof, and shall faithfully discharge the duties and obligations therein assumed, then the above obligation is to be void * * * ; otherwise to be and remain in full force and virtue in law.
“It is expressly understood and agreed that this bond is given to secure and does secure not only the faithful performance by the principal herein named of said contract for the construction work as specified in said contract and in strict accordance with the terms of said contract and the plans and specifications made a part thereof; but that it is given to secure and does secure also the payment by the said bounden Roadmix Construction Corporation of all just claims for material, lubricants, oil and gasoline used or consumed in the construction of the work, and for the payment of all laborers and mechanics for all labor performed in the work either by any subcontractor or otherwise in conformity with the provisions of Section 52-118 of the 1929 Compiled Statutes of Nebraska, and if such payments be made then this obligation shall be null and void.” ‘
Section 52-118, Comp. St. 1929, is in part as follows: That public boards empowered by law to enter into a contract for the erecting, furnishing or repairing of a public improvement, and any officer so empowered by law to enter into such a contract, “to which the general provisions of the mechanics’ lien laws do not apply, and where the mechanics and laborers have no lien to secure the payment of
The record discloses that difficulty arose with reference to the manner in which the terms of the contract were being performed by Roadmix, and it was to be terminated by the state. The president of Roadmix knew Kiewit was familiar with the job, and his grading outfit was on the job, and Kiewit was asked to intercede with the highway department and work out something that would permit Road-mix to retain control and finish the job. A contract was entered into by and between Roadmix and Kiewit, in part, as follows:
Roadmix “agrees to and hereby does employ Peter Kiewit Sons’ Go. to supervise all work in the further performance of the contract * * * between” Roadmix and the department of roads.
“It is agreed that” Kiewit “shall have the exclusive and complete control of all work in the further performance of the contract, without interference by Roadmix.” Road-mix “agrees to do, as directed by” Kiewit “any and ail things necessary to the performance of the work under said contract in accordance with the purposes and terms of this Agreement.” The contract also provided for diligent prosecution of the work by Kiewit, and Roadmix “agrees further to furnish and provide any and all funds necessary for the completed performance of said contract and this Agreement over and above the estimates paid on same.”
“It is agreed that the wages at $65 per week of the Superintendent provided by” Kiewit “and all foremen’s wages, shall be included and considered as a part of the cost of work and paid by” Roadmix. Roadmix “further agrees to pay for the gas and oil necessary in the operation of the
“It is agreed further that any equipment furnished by” Kiewit “for use in the performance of the work, shall be paid for monthly at a fair rental value agreed upon before the equipment is moved on to the job. It is agreed further that Roadmix Construction Company should pay for the transportation of all equipment furnished by” Kiewit “to and from the job.”
The contract had an addenda, signed by the parties, listing the work done prior to September 1, 1938, in a total amount of $10,786.77. Acting under and pursuant to the terms of the contract with Roadmix, Kiewit took over the job and supervision thereof. If there is liability on the part of the. surety, then the evidence and accounting with reference thereto may be considered.
The defendant claims that by the terms of the bond it is a statutory bond, written in conformity with section 52-118, Comp. St. 1929, and defendant’s position is best reflected by the following cases:
Iddings Co. v. Lincoln Construction Co., 104 Neb. 124, 175 N. W. 643, is cited. The part thereof to which defendant directs our attention is contained in the opinon, reading-: “The bond sued upon was given in conformity with section 3840, Rev. St. 1913. It follows that the parties to this litigation executed and delivered a statutory bond; that the bond must be interpreted and construed in connection with the provisions of this statute; that this statute gives to the bond a certain legal effect that is as much a part of the bond as though its terms were incorporated therein.” The court further said: “The statute in this class of cases is the guide fixing the liability of the surety company, and we are constrained to follow it. The legislature intended to fix and did establish the liability in a situation like the instant case.” Further language in this opinion is pertinent:
“In this connection here we have bonds given under this statute, and they should be liberally construed to effectuate
In American Surety Co. v. School District, 117 Neb. 6, 219 N. W. 583, cited by defendant, in the opinion at page 20, we find the following language:
“ ‘The prevailing doctrine is that where the conditions of a statutory bond are separable and part are authorized by statute and part not authorized or even prohibited, and the statute does not expressly, or by necessary implication, declare it void as a whole, the conditions not authorized or prohibited may be rejected as surplusage, and the residue sustained as a good statutory bond pro tanto, the rule being the same as that applied to common-law bonds partly good and partly bad.’ 4 R. C. L. 54, sec. 14.
“ ‘It has been frequently held that, in the absence of a prescribed statutory form, and of a declaration that bonds not in accordance therewith shall be void, if a bond be taken under a statute, with a condition in part prescribed by statute, and in part not so prescribed, yet, if it be clearly divisible, a recovery may be had upon it for a breach of the part prescribed by statute. The superadded part may be rejected as surplusage.’ Board of Education v. Grant, 107 Mich. 151.”
Defendant’s contention is that in Nebraska provisions of a statutory bond that are not authorized by statute are rejected as surplusage and of no effect. Therefore, if the plaintiff is to recover, it must be by reason of the statutory bond furnished the state by defendant company, and plain
In 1889 the legislature passed an act entitled “An Act to secure the payment of mechanics’ and laborers’ wages on all public buildings where the provisions of the general mechanics’ lien laws do not apply.” Laws 1889, ch. 28. In 1913 the act was amended by the insertion therein of certain provisions to secure payment of materialmen who furnished material for the construction of public buildings. Laws 1913, ch. 170. The act as amended became section 3840, Rev. St. 1913, and is now section 52-118, Comp. St. 1929. It was not until 1913 that the legislature of this state included materialmen within the protection of the bond provided for in this statute, “conditioned for the payment of all laborers and mechanics- for labor that shall be performed and for the payment for material which is actually used in the erecting, furnishing, or repairing of the building or in performing the contract.” Laws 1913, ch. 170; Rev. St. 1913, sec. 3840.
In Nye-Schneider-Fowler Co. v. Roeser, 103 Neb. 614, 173 N. W. 605, this court said: “Before our statute (Rev. St. 1913, sec. 3840) was enacted in 1889 (Laws 1889, ch. 28), the laborer or materialman who- furnished labor or material for the erection of a public building had no protection except the responsibility of the contractor, and such bond as the contractor and the public officials might see fit to provide. * * * Then the statute was enacted requiring absolutely that one who contracted to build a public building which would not be subject to mechanics’ liens must give bond to pay laborers and materialmen.” See Fremont Foundry & Machine Co. v. Saunders County, 136 Neb. 101, 285 N. W. 115.
A further review of the Nebraska cases will be- helpful in solving this proposition.
In Sample & Son v. Hale, 34 Neb. 220, 51 N. W. 837, on December 10, 1887, the board of public lands and buildings awarded to one John Layne a contract for the erection of
perform each and every one of the stipulations and agreements contained in the contract, and at times and in the manner therein specified, then this obligation to be void, otherwise to be and remain in full force and effect in law.” The plaintiff furnished material for Layne and brought this action on the bond. The court held that the provision in the contract was not in excess of the powers of the state, and “the sureties on the contractor’s bond for the faithful performance of the contract will be liable for debts arising under the above provision.” The statute in force mentioned only laborers and made no reference to the protection of materialmen. The court said: “The rule is well established in this court that if one makes a promise to another for the benefit of a third person such third person may maintain an action upon such promiseciting Shamp v. Meyer, 20 Neb. 223, 29 N. W. 379. See, also, Lyman v. City of Lincoln, 38 Neb. 794, 57 N. W. 531; Korsmeyer Plumbing & Heating Co. v. McClay, 43 Neb. 649, 62 N. W. 50; Kaufmann v. Cooper, 46 Neb. 644, 65 N. W. 796; all of like effect.
In the case of Rohman v. Gaiser, 53 Neb. 474, 73 N. W. 923, the defendant in error brought an action to recover for material furnished the contractor. The contractor agreed to settle and pay in full for all work and labor performed, and to settle for and pay all materialmen for all material actually furnished in the erection of the building. The bond provided that the contractor “shall well and truly
The foregoing- cases involve bonds given to a public body to secure the performance of public contracts entered into prior to the taking effect of the act of 1913, now section 52-118, Comp. St. 1929. The contention of the defendant is that in all of these cases the doctrine of enforcement of the provision of the bond beyond that part requiring payment of laborers would limit it to the material and materialmen, and would not cover the items as contended for . by the plaintiff 'in the instant case. The principal case subsequent to 1913, when the provision of the statute (now section 52-118, Comp. St. 1929) went into effect, is West v. Detroit Fidelity & Surety Co., 118 Neb. 544, 225 N. W. 673, an action against the surety of the subcontractor to recover for labor and material furnished in the construction of a public highway. There were several causes of ac
In this connection, it is defendant’s contention that the “faithful performance” provision is for the security of the state against defaults of the contractor, has nothing to do with claims of third parties, and is as distinct as if contained in a separate instrument, citing Annotation, 118 A. L. R. 75, as follows: “A public contractor’s bond to the
With reference to the defendant’s contention that the “faithful performance” provision is for security of the state against default of the contractors has nothing to do with claims of third parties and is distinct and separate therefrom, the Nebraska cases cited are not in accord and agreement with such statement.. However, even if true, we believe that the claims of the items furnished by the plaintiff in the instant case are covered by what the defendant chooses to call the second condition of the bond,— that the bond is given to secure and does secure also the payment by said bounden Roadmix of all just claims for material, lubricants, oil and gasoline, used or consumed in the construction of the work and for the payment of all laborers and mechanics for all labor performed in the work, either by subcontractors or otherwise, in conformity with the provisions of section 52-118, Comp. St. 1929, and that part of said section 52-118 pertinent to the bond is: “conditioned for the payment of all laborers and mechanics for labor that shall be performed and for the payment for material which is actually used * * * in performing the contract.”
The Nebraska case of Nye-Schneider-Fowler Co. v. Bridges, Hoye & Co., 98 Neb. 27, 151 N. W. 942, is cited as authority for the foregoing statement. In that case the court held the bond in question “must be construed to cover all labor and materials involved in the work specified in the contract; that is, that enter into the structure or are con
The given distinction between the latter case and West v. Detroit Fidelity & Surety Co., supra, is that the bond in the Nye-Schneider-Fowler case was only for the payment of laborers and did not cover supplies used or employed on said contract. This court has never passed specifically on whether equipment rental should be recoverable as “materials” under a construction contract bond. In West v. Detroit Fidelity & Surety Co., supra, this language is used (p. 555) : “The bond does not require that the supplies enter into and become a part of the construction, as is generally the case in mechanics’ liens, but only that they be used or employed on said contract.” This statement discloses the trend of this court in interpreting the second condition of a bond, a trifle more broad but very similar to the one in the case at bar. The following cases are in explanation of a condition in such a bond as the second condition in the bond here under discussion:
In Nicks v. Baird & Co., 165 Tenn. 89, 52 S. W. (2d) 147, the complainant was the owner of a steam boiler, which he rented to Baird & Company for use in the execution of a contract to construct a state highway bridge. It was used to generate power to force water through hollow piles, and this equipment was necessary to operate the water pump, Baird’s equipment being inadequate. The court held (52 S. W. (2d) 147) : “Surety of state highway contractor held liable for rental * * * under statutory bond for payment of labor and ‘materials.’ ” The condition of the bond was that the contractor “shall well and truly pay every person furnishing material or performing labor in and
In the case of Nicks v. Baird & Co., supra, the statute in question was under Acts 1917, ch. 74, as reflected in the case of Southern Construction Co. v. Halliburton, 149 Tenn. 319, 258 S. W. 409, wherein it was said: “Under the act of 1917, the general contractor and his surety are bound for all materials purchased and labor employed in the work.” Section 52-118, Comp. St. 1929, reads: “conditioned for the payment of all laborers and mechanics for labor that shall be performed and for the payment for material which is actually used * * * in performing the contract.” The Tennessee statute eliminates the part materials actually used in performing the contract, which accounts for the statement in Nicks v. Baird & Co., supra. It is not necessary in Tennessee that materials to be lien-able must be incorporated into the structure or public work for which the principal contract was executed. And it is true that the holding goes further in explanation of the subject-matter than the foreg'oing conclusion; but the Tennessee statute provides that the surety is bound for all material purchased and labor employed in the work, so that the effect of both statutes, in that labor and material must be consumed in the work, is similar.
In the case of Pittsburg Coal Co. v. Southern Asphalt & Construction Co., 138 Tenn. 154, 196 S. W. 490, as set forth in Nicks v. Baird & Co., supra, coal used for generating
As said in the Nicks case: “The essential requirement that materials be consumed in the execution of the principal contract, in order that their cost be secured by a lien on the building constructed, or by the contractor’s bond for a public works project, is supported by two obvious reasons. If the material furnished is not consumable in the use, it is furnished on the general credit of the contractor arid not merely in aid of the performance of the particular contract. And if on the completion of the building or project the material, still possessing- value, remains the property of the contractor, liability for its cost should be and is his liability alone. * * * But neither of these reasons is present when all that is purchased is the- use of material in the execution of a particular contract, under an agreement of hire or lease. In such case all that is purchased is consumed in the use, in aid of the contract.”
In Illinois Surety Co. v. John Davis Co., 244 U. S. 376, 37 S. Ct. 614, a contractor for the construction of the naval training station in Chicago executed a bond under a federal statute which required that the bond include the
In Multnomah County v. United States Fidelity & Guaranty Co., 87 Or. 198, 170 Pac. 525, Annotation, 44 A. L. R. 383, it appears that, by the terms of a contract for the im-‘ provement of a highway, a construction company agreed to pay promptly for all labor or material supplied for the prosecution of the work, and gave a bond to that effect. It was held that the rental of a caterpillar engine was within the bond as being covered by the language of the contract and bond, although it was admitted that, according to the strict legal definition of the term, “labor and material,” the use of the engine would not be embraced in such term.
It is true, as stated in Annotation, 44 A. L. R. 381, “there is considerable conflict as to whether the contractor’s bond covers a claim for the rental of equipment used in the prosecution of the work, the decision depending not only on the terms of the various statutes, but on the courts’ interpretation thereof.”
Many other cases adhering to the principle of the fore
Again, considering the bond in the case before us, it recites that it is given to secure and does secure also payment by the said bounden Roadmix “of all just claims for material, lubricants, oil and gasoline used or consumed in the construction of the work.”
The equipment furnished by plaintiff was not a part of the regular equipment of Roadmix, but a part of regular equipment ordinarily used by a contractor engaged in road construction. The use of this equipment, so rented and transported to and from the job as occasion required, under the supervision of plaintiff’s engineer, contributed directly to the construction of the highway. The value of that use (and that is what rental is) is within the protection of, contemplated and intended by the statute and the bond and one not too remotely connected with the principal work. The rule adhered to in some jurisdictions, that the materials to be lienable must be incorporated into the structure or public work for which the contract was executed under the circumstances here existent, is too narrow, under a liberal interpretation of the statute, as required. In fact, the machinery or equipment, placed on the job by plaintiff and rented by Roadmix, transported to and from the job as required, constituted material actually used in the construction and repair of the highway.
We conclude that, the items sued for by plaintiff are recoverable under the statute and bond. Such items so furnished constitute labor and material purchased under an agreement of hire or lease, in that all that is purchased is consumed in aid of the contract, within the meaning of the second condition of the bond and of section 52-118, Comp. St. 1929, “conditioned for the payment of all laborers and mechanics for labor that shall be performed and for the payment for material which is actually used * * * in performing the contract.”
Giving due consideration to the foregoing, it is unnecessary to further pursue the accounting reflected in the record.
Affirmed.