Court Opinion

ID: 9826977
Source: CourtListenerOpinion
Date Created: 2023-09-01 17:01:25.323286+00
Date Added: 2024-06-11T07:42:20.201317
License: Public Domain

On Motion for Rehearing.
It should be determined on this appeal whether or not the surety on appellant Randolph’s bond is liable upon that bond for the rent required in the contract to be paid by appellant to the oil company for the use of the latter’s drilling rig.
*589It was provided in the contract that appellant should take over and complete the well the oil company had started by drilling it to a specified' depth, if necessary, and that for this operation appellant was to furnish his own expense, labor, material, and equipment, except the drilling rig, which was to be supplied by the oil company, and for which appellant agreed to pay the oil company a monthly rental of $750 at the end of each 30 days; “the final payment to be made on completion of the well as provided for herein.” If was also provided in the contract that:
“Party of the first part agrees to furnish and deliver to the party of the second part a good and sufficient bond made by some surety company satisfactory to the party of the second part, in the principal sum of five thousand ($5,000.00) dollars, conditioned upon and guaranteeing that party of the first part will comply with the provisions of this contract and drill said well to a depth of 3,200 feet, unless oil or gas, in paying quantities, is found at a lesser depth, and that party of the first part will complete said well in a proper and adequate manner, and also that party of the first part will deliver back to party of the second part the drilling rig leased by it to party of the first part, including entire equipment and drill stem furnished, in as good condition as it was in at the time of delivery to the party of the first part, reasonable wear and tear allowed, and that party of the first part will replace all machinery, equipment, pipe, or tools, lost or damaged by him, or place same in a condition satisfactory to the party of the second part.”
In pursuance of this provision appellant Randolph, as principal, and appellant casualty company, as surety, executed a bond payable to the oil company. In this bond it was recited that Randolph and the oil company had entered into a contract, “which is attached to and made a part hereof,” and “by the terms of which said Randolph is to take over and complete a certain well being drilled for oil to a depth of 3,200 feet; * * * ” that “whereas it is desired that the faithful performance of the aforementioned contract and agreement by the said R. B. Randolph be secured to the Witherspoon Oil Company, and that payment be secured to all persons who may perform labor or furnish material incident to the performance thereof.” The obligation of the bond was described as follows:
“Now, therefore, we, R. B. Randolph, as principal, and the undersigned, Employers’ Casualty Company, as surety, acknowledge ourselves held and firmly bound jointly and severally unto the Witherspoon Oil Company, as well as to all other persons who may perform labor or furnish material on such contract or agreement incident to the performance thereof in the sum of five thousand ($5,000.00) dollars, and that said R. B.. Randolph will deliver back to the Witherspoon Oil Company the drilling rig leased by it to him in accordance with the terms and conditions of said contract.
“The condition of this obligation is such that, if R. B. Randolph shall truly and faithfully perform said contract and agreement, then this obligation shall be null and void, otherwise to remain in full force and effect.”
Randolph defaulted in the payment of a portion of the rig rental, and the question is, Is the surety liable under the terms of the bond for the unpaid rental upon the drilling rig? It is obvious that the bond does not expressly provide for such liability. The obligation of Randolph to drill the well as provided in the contract, and pay for all labor and material used by him in the operation, are mentioned in the bond, but the rig rental is not. The express obligation in the bond is limited to the payment for labor and material and the return to the obligee of the drilling rig in good condition, and the condition of the obligation is that Randolph “shall truly and faithfully perform said contract and agreement.”
In deference to the rule that sureties are only chargeable according to the strict terms of their obligations, we hold that the bond did not require the surety to indemnify the oil company against the principal’s default in the payment of the rig rental. The bond did not expressly provide for such liability, and none will be implied by intendment. If the obligee in the bond could resort to implication in order to hold the surety, the remedy would be defeated in this case by express inclusion in the bond of particular obligations which by implication exclude those not mentioned.
Appellee’s motion for rehearing is overruled.