Court Opinion

ID: 4920396
Source: CourtListenerOpinion
Date Created: 2021-09-22 00:16:53.214658+00
Date Added: 2024-06-11T08:14:02.405162
License: Public Domain

Whitfield, J.,
Concurring:
The persons to whom and the defaults for which a surety may be liable on a contract of suretyship are determined by the principles of the common law or by the provisions of statute law that are applicable to the terms of the particular contract. Where the common law does not give a right of action against the surety to persons who are not parties to a surety bond and where a statute expressly requires such a bond to contain stated provisions, which, when so incorporated, under the statute give third persons rights of action against the surety, but such statutory provision is not in form or in substance made a part *670of the bond, a holding that third parties have a right of action and of recovery against the surety is not authorized and may be a violation of the organic right to due process of law.
The statute not only provides that any person or persons entering into a formal contract with public authorities for the construction, completion or repair of any public building or work' “shall be required, before commencing such work, to execute the usual penal bond, with good and sufficient sureties, with the additional obligations that such contractor, shall promptly make payments to all persons supplying him or them labor or material in the prosecution of the work,” but the statute also expressly provides that any person or persons furnishing labor or material shall have a right of action and recovery against the contractor and his sureties for unpaid amounts due for labor and material used in the public work. This statute, when complied with by the execution of a bond conditioned as is expressly required, is properly held to give a right of action and recovery to those who furnish labor and material to the sub-contractor as well as the contractor, since the right of action as specifically given removes the ambiguity in the preceding provision of the statute.
While the statute expressly makes it the duty of the public authorities to require the contractor to execute a bond “with good and sufficient sureties” conditioned as prescribed, yet the statute imposes on the sureties no duty as to the execution of the bond, and the failure of the officials to do their duty is not chargeable to the sureties. And the statute does not impose on the sureties the “additional obligations” stated in the statute unless the statutory condiions are made a part of the bond.
*671Where a particular statutory obligation to pay, that is dependent upon specific conditions, is to be relied on, care should be taken to see that the conditions on which the statutory liability rests, have been complied with before credits are extended.
In this case the condition of the bond does not contain the “additional obligations” in the statutory form so as to impose a liability to third persons not parties to the bond; but the express condition is that the McCrary Company “shall well and truly perform and carry out and abide by all of the terms and conditions of said contract” made a part of the bond. The contract contains a covenant that the McCrary Company, the contractor, will “promptly pay all just claims for material, labor, supplies, equipment and damages * that may be incurred by said contractor in the performance of said work.” This quoted language of the bond and the contract cannot fairly be held to be equivalent to the express statutory provision which imposes a liability on the surety in the bond, on which the statute specifically gives a right of action to third persons not parties to the bond, where the statutory provision is incorporated in the bond. The obligation of the surety in this case cannot legally be extended beyond, the liability imposed by the terms of the bond under the principles of the common law; and the common law liability of the surety does not extend to the real plaintiff here. The statutory obligation cannot legally be imposed upon the surety because the statutory provision was not in substance or in effect incorporated in the bond as required by the statute, and the statute does not impose the added liability unless the required provision is made a part of the bond. Even if the bond as executed imposes a liability in favor of those who furnished labor or material to the contractor, it certainly is- not so conditioned *672under the common law as to -give a right of action to those who furnished labor or material to sub-contractors; and the statutory obligation imposing such a liability was not assumed by the sureties.