Court Opinion

ID: 5584731
Source: CourtListenerOpinion
Date Created: 2022-01-11 01:50:08.075503+00
Date Added: 2024-06-11T08:36:12.174758
License: Public Domain

Hines, J.,
dissenting. The contractor’s bond with a bonding company as surety is payable to the county, and is conditioned for the faithful compliance by the contractor with the terms and con*36ditions of his contract with the county for the doing of public work, so as to indemnify and save harmless the county from all cost, expenses, damages, injury, or loss from the execution and performance of said contract, and from all cost and charges that may accrue on account of the work specified under the contract, and for the payments as they become due of all just claims for work, tools, machinery, labor, and materials furnished by persons under and for the purpose of said contract. The statute provides that no contract with a county “for the doing of any public work shall be valid for any purpose, unless the contractor shall give bond, payable to” the county “contracted with, with good and sufficient surety, for the use of the obligee and of all persons doing work or furnishing skill, tools, machinery, or materials under or for the purpose of such contract, conditioned for the completion of the contract in accordance with its terms, for saving the obligee free from all costs and charges that may accrue on account of the doing of the work specified for the payments as they become due of all just claims for work, tools, machinery, skill, and materials furnished by ‘persons under, or for the purpose of, such contract, and for a compliance with the laws appertaining thereto.” Park’s Code Supp. § 389(c); Acts 1916, pp. 94, 95.. “Any person entitled to the protection of such bond may maintain an action thereon for the amount due him, subject to the provisions hereinafter stated. If suit is instituted on the bond of the contractor by the obligee named therein, any person doing work or furnishing skill, tools, machinery, or materials to the contractor in the construction or repair of any public building or public work belonging to the obligee, and payment for which has not yet been made, shall have the right to intervene and be made a party to said action, and have his rights and claims adjudicated in such action.” Park’s Code Supplement, § 389(f). The bond in this case comes fully within the terms of this statute, except that it does not expressly state that it was given “for the use of the obligee and of all persons doing work or furnishing skill, tools, machinery, or materials under or for the purpose of” the contract between the contractor and the county. Does this omission destroy its character as a bond under this statute, and make it simply a common-law undertaking ? The proper answer to this question depends to some extent upon the .rule which is adopted in construing this statute. Should the rule *37of strictissimi juris be applied, or should a more liberal and common sense rule be adopted?
It is true that the ordinary “contract of suretyship is one of strict law, and his liability will not be extended by implication or interpretation.” - Civil Code (1910), § 3540. But this statute expressly declares that this rule shall not apply to bonds given by contractors thereunder. “No agreement, modification, or change in the contract or change in the work covered thereby, nor any extension of time for the completion of the contract shall release the sureties of said bond.” Park’s Code Supplement, § 389(d). Here this act expressly strikes down the strict-law doctrine applicable to contracts of suretyship. It completely wipes out most, if not all, of the things which by the common law and the above section of our code release sureties. The legislative intent in this matter is unmistakable. The plain intention of the legislature is to do away with the above rule of the code in construing these obli-gations. So it has been held that statutes providing for bonds of this character shall be liberally construed. U. S. v. Bugdorf, 13 App. D. C. 506; Columbia Co. v. Con. Contract Co., 83 Ore. 251 (163 Pac. 438).
The code declares that when an officer required by law to give bond acts under a bond which is not conditioned as prescribed by law, such bond is not void, but stands in the place of the official bond. Civil Code. (1910), § 298. A bond of the character of the one under consideration has been held to be within a statute prescribing, like the above section of the code, that defects in official bonds shall not vitiate them. Holthouse v. State, 49 Ind. App. 178 (97 N. E. 130). The law in force at the time of the execution of a public bond is part of it, and the effect of it, in law, must be held to be known to its makers as i«£ in words incorporated therein. State for use, etc., v. McGuire, 46 W. Va. 328 (33 S. E. 313, 76 Am. St. R. 822). So where a bond is given under the authority of a statute, that which is not expressed, but should have been incorporated, is included. Chambers v. Cline, 60 W. Va. 588 (55 S. E. 999). “A bond given under a statute must be construed, as to the scope of its obligation, to cover the objects of the statute in requiring it, if its words will at all allow such construction, and the statute is to be regarded a part of it.” State v. Wotring, 56 W. Va. 394 (49 S. E. 365). The maker and surety of a statutory *38bond are presumed to have known the terms of a statute, and to have bound themselves in reference thereto. United States Fidelity & Guaranty Co. v. Fultz, 76 Ark. 410 (89 S. W. 93); Crawford v. Ozark Ins. Co., 97 Ark. 549 (134 S. W. 951). So it has been decided, that where a bond was given by a government contractor pursuant to act of Feb. 24, 1904 (U. S. Comp. St. 1911, 1071, § 6923), prescribing the substance and conditions of the bond, the statutory provisions were as binding upon the principal and surety as if they had been written in the bond in the terms of the statute. People v. Metropolitan Surety Co., 211 N. Y. 107 (103 N. E. 99). The law at the time of the execution of the bond is a part of it. If the law gives to the contract a certain legal effect, it is as much 'a .part of the bond as if in terms incorporated therein. 9 C. J. 34, § 56; State v. Nutter, 44 W. Va. 385 (30 S. E. 67). This being so, the provision of the statute that the bond is for the use of the county and those furnishing labor or material under the contract will be read into the bond.
The bond under consideration in all respects accurately conforms to the act of 1916, and is a statutory bond, unless the omission of the language of the act, “for the use of the obligee and of all persons doing work, or furnishing skill, tools, machinery, or materials under or for the purpose of such contract,” destroys its statutory character. This instrument does not in so many words declare it is given for the use of the county, and of persons doing work or furnishing skill, tools, machinery, or materials under or for the purpose of the contract between the county and the contractor; but its express terms make it plain and manifest that it is given for such uses. It is made payable to the county, and is conditioned for the faithful compliance by the contractor with the terms and conditions of his contract with the county. This is a clear declaration that it is for the benefit and use of the county, which is the obligee. This is just as transparent as if the declaration had been put in the bond. It is also conditioned “for the payments, as they become due, of all just claims for work, tools, machinery, labor, and materials furnished by persons under and for the purpose of said contract.” The plain and unmistakable meaning of this provision of the bond is that it is made for the use of the persons furnishing labor or materials under the contract. The meaning would not be any clearer, if it had been stated in totidem verbis *39that it was for their use. The bond, complying substantially with the requirements of the statute, is a statutory bond; and being such a bond, one who furnished materials to the contractor under this contract with the county can maintain an action on the bond in his own name against the principal and surety.