118 Neb. 544 | Neb. | 1929
Action against the surety of the subcontractor to recover for labor and material furnished in the construction of a public highway. The petition declares upon fourteen causes of action, two of which belong to the plaintiffs and the twelve others being assigned to the plaintiffs for the purpose of suit. The plaintiffs dismissed the eleventh and fourteenth causes of action, and a verdict was rendered for plaintiff against the defendant on the other twelve, upon
The state of Nebraska and Otoe county entered into a contract with Stevens Brothers for the graveling of a certain road from Dunbar to Syracuse in Otoe county, Stevens Brothers and the Northwestern Casualty & Surety Company executed a bond to the department of public works of the state for the faithful performance of said contract. Stevens Brothers sublet the contract to the Interstate Construction Company, and the defendant, Detroit Fidelity & Surety Company, executed a bond to Stevens Brothers containing the following condition:
“Now, therefore, if said Interstate Construction Company as principal, shall in all respects fulfil its said contract according to the terms and tenor thereof, and shall faithfully discharge the duties and obligations therein assumed, and shall pay for all labor, equipment, gasoline, oils, materials and supplies used or employed on said contract, then the above obligation is to ibe void and of no effect; otherwise, to be and remain in full force and virtue of law.”
“The surety on this bond given to guarantee the faithful performance and execution of the work included in the contract shall be deemed and held, any contract to the contrary notwithstanding, to consent without notice: To any extension of time to the contractor in which to perform the contract when each particular extension does not exceed sixty days.”
The bond recited the awarding of the subcontract by Stevens Brothers to the construction company, and made it a part of the bond. The original contract between the state and Stevens Brothers provided for the completion of the work by September 1,1925, but also provided that such time might be extended by the department of public works, and the subcontract contained the following provision: “We,
Stevens Brothers, agree to give any extensions of time we may receive from the department of public works to the subcontractors.” Five extensions of time were granted as follows: To October 1, 1925; to December 1, 1925; to Feb
The defendant, for the reversal of the judgment, presents three grounds which we deem it necessary to consider:
1. That the petition does not show that the plaintiffs have a right to maintain the action. The point made is that under section 3224, Comp. St. 1922, providing that, in contracts for public work 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 their wages, and materialmen who furnish material for said work have no lien to secure payment for the material furnished in such work, a bond shall be required which shall be conditioned for the payment of all laborers and mechanics and for material used in performing the contract, and providing that such bond “may be sued on by any person entitled to the benefit of this chapter. The action shall' be in the name of the party claiming the benefit of this chapter” — plaintiffs are not within the class who may sue. The chapter containing the above section includes the mechanics’ lien law, and the argument is that, inasmuch as plaintiffs are not entitled to a mechanics’ lien, they have no right of action upon the bond. We think the contention unsound. The very purpose of the section in question was to protect persons who were not entitled to mechanics’ liens, and this purpose would be entirely defeated if this construction were adopted. The plain intention of the legislature as expressed here will control general terms; moreover, the greater includes the less, and the right is extended to any one who claims the benefit of any provision of the chapter.
It is further contended on this point that the bond is a substitute for mechanics’ liens, and that, inasmuch as the right to a mechanics’ lien is not assignable (Noll v. Kenneally, 37 Neb. 879), the right to sue upon the bond is not. Neither the case above referred to, nor any other to which
2. That because of the fact that three of the extensions granted were for 61, 62, and 61 days, respectively, the surety upon the bond was thereby released. A number of cases are cited to the proposition that an extension of a contract between the parties thereto, based upon a valuable consideration, without the knowledge or consent of the surety, releases the surety, which is undoubtedly a correct statement of the general rule. Among other cases defendant cites Schwartz v. American Surety Co., 231 Mass. 490, where the condition of the bond of a building contractor was for the faithful performance of a contract to build a house to be completed by November 1, and it was held that an extension of the time for the completion of the house until Christmas of that year discharged the-surety. The bond in that case was not conditioned for the payment of the material and labor entering into the construction of the building, and the rights of persons furnishing the same were not in controversy. Also, Forburger Stone Co. v. Lion
In the case of Doll v. Crume, 41 Neb. 655, the contract for the grading of a street was involved, containing a provision that the contractor should pay for all labor and material furnished him in executing the contract, and the defendants executed a bond guaranteeing “that the party of the second part (the contractor) will well and truly perform the covenants hereinbefore contained to pay all laborers employed on said work; and if said laborers are not paid in full by said party of the second part, that said party of the third part (sureties) hereby agrees to pay for said labor, or any part thereof,” and it was held that an extension of the time for performance of the contract did not release the sureties from their contract to pay the laborers, and that the plaintiff, one of said laborers, might sue upon the contract in his own name as having been made for his benefit.
The rule contended for applies to the case of voluntary sureties who become such without consideration, but it is said in a note to 33 L. R. A. n. s. 513, that “the overwhelming weight of authority supports the proposition that the rule of strictissimi juris, by which the rights of uncompensated sureties are determined, is not applicable to the contracts of surety companies, which make the matter of suretyship a business for profit; that their business is essentially that of insurance.” To the same effect, see 22 Cyc. 306.
It will be noted that two of the extensions exceeded the limit of 60 days by one day and one by two days. In the ordinary use of language one month is generally considered the same as 30 days; one month and 30 days, and two months and 60 days, might be considered as practically synonymous terms. It was held in People v. Ulrich, 2 Abb. Pr. (N. Y.) 28, that a notice to quit in thirty days was a substantial compliance with the statute requiring one month’s notice, as in that case the notice was given in April, a month containing 30 days. We do not find it necessary to determine this question. The extensions of time in the present case were valid for a period of 30 days and 60 days, respectively, within the terms of the consent of the surety, and we have the situation of an extension for one or two days without such consent. It is not claimed by the surety that it suffered any damage by reason of these extensions, and within the reasoning of the authorities above cited, its release was not thereby effected.
3. It is further contended by the defendant that a large number of items contained in the several causes of action do not come within the terms of the bond. This- requires an examination of the various items of the account presented by the evidence.
Objections are made to a number of items allowed by the district court as properly chargeable to the bond, on the ground that they do not fall within the terms of the condi
(1) A large number of auto trucks were used in the transportation of gravel from the pits for use on the highway. A few of these trucks were owned by the construction company, but many more were owned by the drivers thereof. The drivers who owned their own trucks were paid according to the amount of gravel hauled at so much per yard per mile. At the commencement of the work the construction company made arrangements with several mechanics operating garages to make repairs upon and furnish parts and accessories for all the trucks used on the job, including those owned by the respective drivers. The construction company gave orders to the mechanics for repairs and supplies to the trucks, which were charged to the company and deducted from the amount due the drivers- respectively, monthly statements being rendered to the company for this purpose. Upon completion of the work the bills for these repairs and supplies were unpaid, and the claims for the balance due form a part of the first and second causes of action.
The claim of the defendant is, inasmuch as the owners of the trucks were paid by the yard, it was their duty to keep their own trucks in proper repair, and that the repairs and supplies- covered by these, bills were furnished and properly chargeable to the drivers and not to the construction company as entering into the expense of the project. We think, however, that there is no proper basis for distinguishing between the repairs and supplies furnished to the drivers owning their trucks and those furnished for trucks belonging to the company, under the circumstances above related. The items were not charged to the drivers but to the construction company which used the amount thereof in part payment of the contract price for hauling the gravel. These bills were incurred by the contractor as a part of the cost of
(2) The second class of charges to which objection is made is for groceries and provisions supplied to the employees engaged on the project. These are presented in the fourth, tenth and twelfth causes of action and may be subdivided into two classes: (a) Supplies furnished individual employees, and (b) those furnished foreman Bell whose wife conducted a boarding shack located on the project. In both classes the supplies were furnished upon written orders of and charged directly to the contractor, by whom the amounts thereof .were deducted from the wages of the employees respectively. With reference to class “a,” the situation does not differ from the furnishing of repairs and supplies to the drivers of trucks above discussed, and for
As to class “b,” the objection is that it was an independent undertaking on the part of the foreman and his wife-for the purpose of making a profit. We do not so consider it. The boarding house was established for the convenience of the employees and other persons engaged upon the project, who either paid for their meals or the same were charged to the contractor and deducted from the payroll. Counsel for appellant argues “as to the provisions, it would be charging the provisions for the board and keep of the men who worked by the job, and not only these men, but also their families. If the men who owned the trucks and hauled the gravel should have been farmers residing in that community, it would be just as logical to charge the grocery bills of these farmers to the bondsman as to charge the various articles mentioned in these causes of action to the bondsman.” This argument leaves out of consideration the facts that the articles were sold and charged to the contractor and the amounts deducted from salaries and wages. They were, therefore, used and consumed on the project. This is not a case where the employees procured the supplies upon their own credit, in which event they would not be so directly connected with the work as to become a part of it. It is a case where the contractor extended his credit for the purpose of insuring the advancement and accomplishment of the work, thus establishing a direct connection
(3) This claim is for gasoline and oil furnished the drivers owning their trucks, and is presented in the thirteenth cause of action. Arrangements were made by the contractor with the claimants to furnish these supplies to the drivers, charging them to the contractor. The drivers purchased from the contractor coupon books calling for the supplies, and these coupons were redeemed by the contractor. These supplies were uised and employed on the contract. No objection is made to the allowance for similar supplies furnished for trucks owned by the contractor. The claim was properly allowed against the bond, for reasons already given as to the claims for repairs and provisions,
There are, however, objections to certain items in two of these accounts, which we think are well taken: (1) A charge of $58 for a new radiator for one of the drivers’ trucks; (2) three charges for $262.70, $300, and $100, in-
Objections are made to instruction No. 3 given by the court, but as this related to the defense of a release of defendant by extensions of time, which we have held unavailable, this assignment need not be discussed.
It follows that the judgment of the district court is right, except as to the first cause of action, which is reduced by $55 and interest, $5.35, total $60.35; and the sixth cause of action which is subject to a reduction of $662.70 and interest, which leaves nothing duie thereon from the surety.It is therefore ordered that the judgment on the first cause of action be reduced and affirmed to the extent of $1,445.51; that the sixth cause of action be reversed and dismissed; and that in all other respects the judgment is affirmed.
Affirmed in part, and reversed in part.
Note— See Highways, 29 C. J., 611 n. 37, 612 n. 51, 53, 612 n. 67, 613 n. 73, 75 — Principal and Surety, 32- Cyc. 191 n. 91; 43 L. R. A. n. s. 65; 44 A. L. R. 383; 46 A. L. R. 511; 22 R. C. L. 632; 3 R. C. L. Supp. 1273; 4 R. C. L. Supp. 1473; 7 R. C. L. Supp. 751.