Case Title: Thompson Transport Co. v. Middlestates Construction Co.

Citation: 194 Kan. 52, 397 P.2d 368

Docket Number: 

State: kansas

Court: Kansas Supreme Court

Date: 1964-12-12T00:00:00Z

Document:
194 Kan. 52 (1964)
397 P.2d 368
THOMPSON TRANSPORT COMPANY, INC., a Kansas Corporation, Appellant,
v.
MIDDLESTATES CONSTRUCTION COMPANY, a Nebraska Corporation, (Defendant) and TRINITY UNIVERSAL INSURANCE CO., a Texas Corporation, Appellee.
Nos. 43,822 and 43,860

Supreme Court of Kansas.
Opinion filed December 12, 1964.
Patrick L. Connolly, of Topeka, argued the cause, and Milford M. Magee, also of Topeka, was with him on the brief for the appellant.
Robert T. Cornwell, of Wichita, argued the cause, and Wayne Coulson, Paul R. Kitch, Dale M. Stucky, Donald R. Newkirk, Robert J. Hill, Gerrit H. Wormhoudt, Philip Kassebaum, John E. Rees, Willard B. Thompson and David W. Buxton, all of Wichita, were with him on the brief for the appellee. Hugo T. Wedell and Homer V. Gooing, both of Wichita, of counsel.
The opinion of the court was delivered by
SCHROEDER, J.:
This is an action by Thompson Transport Company, Inc. (appellant) to recover freight charges for transporting bituminous base (road mix) materials for Middlestates Construction Company. Middlestates had a road construction contract with the State Highway Commission of Kansas. The appellant sued Middlestates and also Trinity Universal Insurance Company (appellee), claiming such transportation charges were covered by the G.S. 1949, 68-410 bond signed by Trinity as surety. The trial court *53 entered judgment for Trinity, and appeal has been duly perfected by Thompson Transport Company, Inc.
The question is whether charges for transporting such road materials are covered by the bond given pursuant to G.S. 1949, 68-410.
The preliminary facts and procedural steps necessary to focus the foregoing issue on appeal are conceded by the parties, and we shall not dwell upon them. The facts necessary for a determination of this appeal have been stipulated by the parties. In pertinent part they provide:
..............
Pursuant to stipulation No. 9, wherein Middlestates stipulated to the amount of its indebtedness to the appellant, the trial court entered judgment against Middlestates, and it did not appeal. In its contract with the State Highway Commission Middlestates agreed at its "own proper cost and expense to do all the work, furnish all materials and labor necessary to do the work in accordance with the plans and specifications herein described, and in full compliance with all the terms of this agreement and the requirements of the engineer under it." (Emphasis added.)
The contract further provided:
The statutory contract bond entered into by Middlestates, as principal, and Trinity Universal Insurance Company, as surety, firmly bound Middlestates and Trinity unto the State of Kansas in the penal sum of $182,983.82 (the full amount of the road construction contract) to be paid the State Highway Commission of Kansas on the conditions set forth in the bond.
The condition of the bond provides:
The trial court determined the matter in favor of the appellee in accordance with the appellee's theory of the case. The reason for its decision is set forth in the following paragraph of its memorandum decision:
Upon entry of judgment by the trial court a motion for a new trial was filed and overruled, and appeal has been duly perfected.
In stipulation No. 5 the parties concede the contract between Middlestates and the State Highway Commission incorporated and included by reference the 1960 Standard Specifications for State Road and Bridge Construction of the State Highway Commission of Kansas. In the lower court a copy of these Standard Specifications was attached to the written stipulations as "Stipulation Exhibit No. II" and incorporated in the stipulations as if set out in full.
In these Standard Specifications under Section A4 the following is set forth:
"SCOPE OF WORK
*56 In these Standard Specifications under Section A9 the following is set forth:
"MEASUREMENT AND PAYMENT
..............
The appellee challenges the appellant's reference to sections A4 and A9-2 of the foregoing 1960 Standard Specifications on the ground that such evidence is not contained in the abstract or counter abstract. The appellant, however, argues this court is entitled to take judicial knowledge of these Standard Specifications.
It is immaterial to determine whether this court is entitled to take judicial notice of these Standard Specifications because the parties in this case have entered into a stipulation and have incorporated them as a part of their written stipulations which were submitted to the lower court.
The trial court in its memorandum decision referred to the language of section A4 of the Standard Specifications of the State Highway Commission of Kansas, Edition 1960, but felt that such section merely concerned the obligation of the contractor, and gave such evidence no further consideration in determining the issue.
Under the circumstances here presented this court, if necessary, could call for the record before the lower court to determine the issue raised on appeal. Here, however, this is unnecessary because the Standard Specifications for State Road and Bridge Construction of the State Highway Commission of Kansas, Edition 1960, are published by the State Highway Commission and are readily available for reference. Their accuracy is not challenged by the appellee in the instant case.
By the terms of the contract between Middlestates and the State Highway Commission the Standard Specifications of the State Highway Commission, Edition 1960, including sections A4 and A9-2, were a part thereof. Thus, Middlestates by its contract was bound to full compliance with all of the terms of the contract, which included an obligation to furnish all transportation and all materials as may be required to execute the contract in accordance with its terms, at its "own proper cost and expense," for which Middlestates was entitled to accept compensation from the State Highway Commission under its road construction contract.
*57 The appellee states the issue presented on appeal as follows:
We think the appellee's statement of the question over-simplifies the issue. The appellee contends that G.S. 1949, 68-410 bonds do not cover freight charges for transporting supplies and materials. Its argument on this point proceeds as follows:
In view of recent decisions it is improper to rely upon the older cases cited by the appellee in construing separate statutes in accordance with the foregoing argument. Traction Co. v. Brick Co., 112 Kan. 774, 213 Pac. 169, and American Nat'l Bank v. Central Construction *58 Co., 160 Kan. 400, 163 P.2d 369, relied on by the appellee, are readily distinguishable.
In Wolfe Tire Corp v. Stanton, 133 Kan. 713, 3 P.2d 698, the court was confronted with the act of 1925, amending R.S. 1923, 60-1413. Prior to the 1925 enactment the statutory bond (60-1413) only provided for payment of indebtedness incurred for material and labor which entered into and became a part of a public building or a public improvement and remained with it. The amended act enlarged the former one by adding "supplies" to "labor and material furnished," and also the phrase, "consumed in connection with the construction of the road." In the opinion the court said:
A recent decision confirming that the obligations of those signing a statutory bond are fixed by the terms of the bond is Leidigh & Havens Lumber Co. v. Bollinger, 193 Kan. 600, 396 P.2d 320, decided November 7, 1964. There a statutory bond was given by a general contractor pursuant to G.S. 1949, 60-1413 and 60-1414, for the construction of a public building to secure payment for the labor or materials furnished, used or consumed in connection with or in or about the construction of such a building. The contention there advanced was that the lumber company could recover only if it was entitled to an enforceable mechanic's lien under G.S. 1949. 60-1403, or if its evidence showed a contractual obligation on the part of the general contractor to pay for the materials purchased by the subcontractor from the plaintiff. In holding neither requirement necessary, the court said:
By construing Wolfe Tire Corp. v. Stanton, supra, and Leidigh & Havens Lumber Co. v. Bollinger, supra, together, as applied to the *59 facts in the instant case, the rule is established that the obligations of those signing a statutory contract bond are fixed by the terms of the bond, and if the bond shows an intention to guarantee compliance with the terms of the contract pursuant to which the bond is given, the surety signing the bond becomes the surety for the full performance of all the terms of the contract.
In construing the condition of the statutory contract bond given in the instant case to ascertain the intention of the parties signing it, we do not think it proper to compartmentalize the condition by making reference to separate statute which preceded the enactment of G.S. 1949, 68-410. In other words, when the principal in the bond with its surety undertake to fully and faithfully perform its contract with the State Highway Commission in every respect and complete the work in accordance with the provisions of the contract, the principal with its surety, in effect, guarantee to pay all indebtedness incurred in carrying out the provisions of the contract, and subsequent provisions in the condition of the bond which follow the language of the statute do not detract from such commitment. Considering the specific language employed in the condition of the bond, we do not think it could be said Middlestates, as principal, and the appellee, as surety, executed a bond which guaranteed something less than full compliance with the provisions of Middlestates' road construction contract with the State Highway Commission. (See, Shannon v. Abrams, 98 Kan. 26, 157 Pac. 449.)
We hold the execution of the statutory contract bond in the instant case as required by G.S. 1949, 68-410 shows an intention on the part of the obligors who signed the bond to comply fully with the provisions of the contract entered into between Middlestates and the State Highway Commission and to comply with the provisions of the statute. Accordingly the appellee, as surety on the bond, is obligated by the provisions of the statutory contract bond in the instant case to make good for the transportation charges of the appellant. (G.S. 1949, 68-410.)
The appellant contends it is entitled to an allowance of attorney's fees under G.S. 1961 Supp., 40-256.
While Trinity Universal Insurance Company is merely a surety on the 68-410 bond in this case, G.S. 1949, 40-201 defines an insurance company to include companies writing contracts of indemnity or suretyship upon any type of risk or loss.
The provisions of 40-256, supra, which authorize the allowance of a reasonable attorney fee for the insured in all actions where *60 judgment is rendered against an insurance company, condition such allowance upon the proviso that such company has refused without just cause or excuse to pay in accordance with the terms of its contract.
In our opinion the appellee, Trinity Universal Insurance Company, has refused without just cause or excuse to pay in accordance with the terms of its contract and the appellant is entitled to an allowance of a reasonable attorney fee. (Wolf v. Mutual Benefit Health & Accident Association, 188 Kan. 694, 366 P.2d 219.)
The judgment of the lower court is reversed with directions to make an allowance of a reasonable attorney fee for the appellant.