31 S.E.2d 701 | Ga. | 1944
Lead Opinion
This case comes to us on certiorari from the Court of Appeals. It was a suit on a contractor’s bond, by one furnishing material and labor, given in compliance with the Code, § 23-1705, to the State Highway Department for the faithful performance of a contract for certain public works. A
This brings us to a consideration of another and different phase of the question. Does the act in fact create the liability in favor of the materialman and against the surety on the bond? Both the majority and minority opinions seem to assume that it does. If it does not, if the right of action exists, not under the statute, but in accordance with the statute on the bond, the main difficulty in arriving at a conclusion would be entirely eliminated, since the rule quoted from American Jurisprudence would not apply. It is true enough that the bond was given in accordance with the requirements of the statute, and that the liability on the bond results from the requirements of the statute, but the statute in itself does not and could not create a cause of action against this particular defendant or in favor of a particular plaintiff. The cause of action would seem to rest, not under the statute, but on the bond, and the defendant became the surety on the bond not by virtue of
In addition to what has already been said with respect to whether or not the statute created a new cause of action, it would seem that, in this case, it did not do so for still another reason. We cannot think, to requote a portion of the rule as stated by American Jurisprudence, that this was “a statute which in itself (italics ours) creates a new liability” for the additional reason that even if the statute, instead of the bond, should be treated as creating the liability, even then, the identical liability already existed in favor of materialmen under the statute embodied in G-a. L. 1910, p. 86. The act of 1916 (Ga. L. 1916, p. 94), now embodied in the Code, §§, 23-1705 to 23-1709, inclusive, in accordance with which the bond
We think that the conclusion arrived at by the Court of Appeals is correct.
Judgment affirmed.
Rehearing
ON MOTION ROE REHEARING.
Counsel submit on their motion for rehearing an impressive line of argument, with authorities in support thereof which they state they had failed to discuss in their original brief. The argument now urged, as we understand it, is that, since under the minority American rule, to which this State is committed, a third person is not ordinarily permitted to enforce a promise made for his benefit, it follows that it is only because the statute here involved expressly authorized the materialman to sue on the bond that he has such right, and consequently the cause of action is under the statute and not on the bond. Thus, in what we have to say, it will be borne in mind that there are three questions involved: the major and controlling question as to whether the action is barred; the ancillary question throwing light on the controlling question, to wit, whether the cause of action lies under the statute or on the
While it is true that the Code, § 3-108, provides that, “As a general rule, the action on a contract, whether express or implied, or whether by parol or under seal, or of record, shall be brought in the name of the party in whom the legal interest in such contract is vested, and against the party who made it in person or by agent,” it is also true that'nearly all of the numerous decisions recognizing this statutory provision,' including the leading case of Sheppard v. Bridges, 137 Ga. 615 (74 S. E. 245), give effect to the exception to the rule, and have adopted it as a rule of procedure that a suit may be maintained in the name of a third party where the promise has been made for the express purpose of conferring a benefit upon him. See Carruth v. Ætna Life Insurance Co., 157 Ga. 608 (122 S. E. 226). In the case just cited, it was held in headnote 1, quoting from Sheppard v. Bridges, supra, that, where a “promise is made for the purpose of conferring a benefit on a person, though he be not a party to the contract, or furnish the consideration for the promise, he can bring suit upon it;” and in the same case, in headnote 1(a), it was said: “A contract for the benefit of a third person, which evidences an intent to benefit such third person and an obligation on the part of the promisee to the third person, creates an equitable right or interest in the beneficiary, growing out of the trust relationship, which may be enforced by the real beneficiary or her personal representative;” and, in headnote 1(b), it was held that, “A person not a party to the contract and not a privy to the consideration may, if the contract was entered into for his benefit, maintain an action on it if he has either a legal or equitable interest in the performance of the contract.” This rule was reiterated though not adjudicated in Stonecypher v. Coleman, 161 Ga. 403, 413 (131 S. E. 75). It appears to be the rule, as recognized by the decisions of this court, that while the provisions of the Code, § 3-108, requiring that a suit be brought “in the name of the party in whom the legal interest in such contract is vested,” bars an action by a third person who has
Rehearing denied.
Lead Opinion
Section 23-1709 of the Code, which relates to bonds given by contractors to governmental bodies in connection with contracts for public works, and which provides that, "No action can be instituted on said bond after one year from the completion of said contract and the acceptance of said public building or public work by the proper public authorities," creates a limitation on the time within which such an action may be brought, and not a condition annexed to the right of action. Therefore an action filed on such a bond within a year from the completion of the work, which action was dismissed and recommenced within six months under the provisions of the Code, § 3-808, is maintainable.
This brings us to a consideration of another and different phase of the question. Does the act in fact create the liability in favor of the materialman and against the surety on the bond? Both the majority and minority opinions seem to assume that it does. If it does not, if the right of action exists, not under the statute, but in accordance with the statute on the bond, the main difficulty in arriving at a conclusion would be entirely eliminated, since the rule quoted from American Jurisprudence would not apply. It is true enough that the bond was given inaccordance with the requirements of the statute, and that the liability on the bond results from the requirements of the statute, but the statute in itself does not and could not create a cause of action against this particular defendant or in favor of a particular plaintiff. The cause of action would seem to rest, not under the statute, but on the bond, and the defendant became the surety on the bond not by virtue of *332
the statute, but by his own voluntary agreement. He contracted with the Highway Department for the benefit of any materialmen who might come within the terms of its protection. It might be said that the bond is a statutory bond, and so it is; but the statute does not create an involuntary liability against any person or class of persons whose liability is made and exists solely by virtue of a statute, such, for example, as statutes giving a right of recovery of damages against cities and counties for injuries caused by mobs. See Hill v. Board of Supervisors,
In addition to what has already been said with respect to whether or not the statute created a new cause of action, it would seem that, in this case, it did not do so for still another reason. We cannot think, to requote a portion of the rule as stated by American Jurisprudence, that this was "a statute whichin itself (italics ours) creates a new liability" for the additional reason that even if the statute, instead of the bond, should be treated as creating the liability, even then, the identical liability already existed in favor of materialmen under the statute embodied in Ga. L. 1910, p. 86. The act of 1916 (Ga. L. 1916, p. 94), now embodied in the code, §§ 23-1705 to 23-1709, inclusive, in accordance with which the bond *335 was given in this case, merely consolidated the laws requiring the giving of bonds for public works, and providing for indemnity in favor of materialmen. The act of 1916 by its terms repeals the act of 1910, requiring indemnity bonds for material and labor used in public works, but states that the act then passed was enacted in lieu thereof. Thus, even treating the liability as statutory, it could hardly be said that the cause of action in favor of the materialman was a new right, when all that the statute did was to rub out an old law and substitute "in lieu thereof" a new law, which, though identical in effect, merely combined all the rules and regulations governing the giving of bonds for public works. Whether the limitation in the old statute was to be taken as a condition or a limitation, the legislature, in re-enacting the law for the protection of materialmen in public works, had the right to make it a limitation irrespective of what it might have been, and since the rights given to materialmen, even though statutory, were not new rights, but were old rights re-enacted by a new law, what has been called the earmark in determining between conditions and limitations would not apply in the latter instance, irrespective of what might have been the rule in the first instance.
We think that the conclusion arrived at by the Court of Appeals is correct.
Judgment affirmed. All the Justices concur, except Bell, C.J., and Wyatt, J., who dissent.
While it is true that the Code, § 3-108, provides that, "As a general rule, the action on a contract, whether express or implied, or whether by parol or under seal, or of record, shall be brought in the name of the party in whom the legal interest in such contract is vested, and against the party who made it in person or by agent," it is also true that nearly all of the numerous decisions recognizing this statutory provision, including the leading case of Sheppard v. Bridges,