Court Opinion

ID: 7064874
Source: CourtListenerOpinion
Date Created: 2022-07-24 07:24:52.654801+00
Date Added: 2024-06-11T16:12:20.379842
License: Public Domain

On Petition for Rehearing.
Roby, J.
Since the opinion herein was filed the question as to the right of a materialman to recover upon the contractor’s bond has been presented to this court in a number of other cases. In one of them oral argument was had, while elaborately and carefully prepared briefs have been submitted by most capable lawyers, and the ruling on this petition, which has been withheld pending such further investigation, will be made after the court has at least had an opportunity to be informed upon the subject.
*1614'. *160It is held by the English decisions that where two persons make a contract in which one of them promises to confer *161benefits upon a third person, the latter cannot sue upon the contract, either in law or in equity, for the money or other benefit which it is promised that he shall receive. This doctrine has been adopted in certain of the states. 9 Cyc., 374. A larger number of the states have, however, adopted the so-called American doctrine, which permits such party to recover such benefit in a suit brought in his own name. 9 Cyc., 377. This is the doctrine in Indiana. Ferris v. American Brewing Co. (1900), 155 Ind. 539, 52 L. R. A. 305; Judson v. Romaine (1893), 8 Ind. App. 390; Williams v. Markland (1896), 15 Ind. App. 669. In the consideration of this case, it follows that decisions of courts in states where the English doctrine prevails do not possess any persuasive or other authority, and they are therefore eliminated.
5. A class of argument which has, to some extent, been pursued, and must also be eliminated, is that which proceeds upon the assumption that the provision of the contract quoted is not for the benefit of the materialman or laborer, or that the sole purpose of the contract was to protect and indemnify the owner. The very question to be decided is whether the promise is for the benefit of the materialman and laborer. The words of the bond are: “Shall pay for all material used and all help employed in the construction of said building.” This is a certain and express agreement to pay for all material furnished and for all help employed. The agreement to pay is primarily for the benefit of the creditor to whom such payment must of necessity be made. Had the provision been that the contractor “shall pay the M. J. Carnahan Company for all material furnished by it and used in the construction of said building, ’ ’ there could not, under the doctrine before stated, be any doubt as to the right of said M. J. Carnahan Company to recover in such an action as this.
No one will suggest that the agreement to pay for all *162material used and for all help employed was intended for the benefit of the owner. Incidentally such payment might benefit him, in that it would prevent the acquirement of a valid lien, but such result would be an incidental one only. It was never contemplated that such payments should be made to him. Persons who let contracts for the construction of buildings do not furnish all the material and do all the work. It is practically impossible, at the time of contracting •for the erection of a building, to name the persons who will subsequently furnish material therefor or do labor thereon. Such parties were therefore described in general and comprehensive terms. The language used is inclusive — shall pay for “all” material and “all” help. The legal effect of the language used is not different from what it would have been had the agreement been to pay whoever shall furnish material or do labor. Reynolds, etc., Co. v. Eacock (1901), 27 Ind. App. 459; Jordan v. Kavanaugh (1884), 63 Iowa 152; Wells v. Kavanaugh (1886), 70 Iowa 519; Baker & Co. v. Bryan (1884), 64 Iowa 561; Hipwell v. National Surety Co. (1906), 130 Iowa 656.
6. The maxim is: “That is certain which can be rendered certain.” When the identity of the person furnishing such material is rendered certain, the contract is not different in any respect, in terms or in effect, from what it would be did it contain appellee’s proper name. Rhodes v. Matthews (1879), 67 Ind. 131, 139; Stevens v. Flannagan (1892), 131 Ind. 122, 127; Pitney v. Glens Falls Ins. Co. (1875), 65 N. Y. 6, 14; Clinton v. Hope Ins. Co. (1871), 45 N. Y. 461. Names are used to indicate identities. Meyer v. Indiana Nat. Bank (1901), 27 Ind. App. 354. The identity of the person furnishing materials for use in the building referred to in the contract under consideration being established, there is no room for a denial of the right of the appellee to maintain its action. This is the conclusion stated in the books.
“As security for faithful performance, contractors are *163frequently required to execute a bond with sureties. Such bonds frequently require the contractor to pay all claims for materials used and the wages of all laborers, etc., employed by the contractor upon the work. Under such conditions the right of the persons who furnish materials or perform labor for the contractor to maintain an action on the bond to enforce their claims depends on the general rule prevailing in the jurisdiction in which the suit is brought with regard to the right of incidental beneficiaries of a contract, though not parties or privies thereto, to maintain an action on the contract.” 30 Am. and Eng. Ency. Law (2d ed.), 1288. “On default of the builder, in cases where the contract requires him to pay for all labor and material furnished, a right of action directly against the sureties accrues to unpaid laborers, materialmen, and subcontractors.” 6 Cyc., 83. And see Greenfield Lumber, etc., Co. v. Parker (1902), 159 Ind. 571; Jordan v. Kavanaugh, supra; Wells v. Kavanaugh, supra; Baker & Co. v. Bryan, supra; Hipwell v. National Surety Co., supra. Building contracts, guaranteed by sureties for the contractor, upon which materialmen or laborers have secured judgments, subsequently affirmed by this court, contain particular clauses as follows: “Por the fulfilment of said contract and the payment of all such material and labor debts.” Williams v. Markland, supra. “And promptly pay all the debts incurred in the prosecution of said work, including labor and material furnished.” Young v. Young (1899), 21 Ind. App. 509. “That he would pay for all labor and material used in said building.” American Surety Co. v. Lauber (1899), 22 Ind. App. 326. ‘ ‘ The provision of the contract that there should be no claims against the contractor for work and materials could only mean that he was to discharge such claims by their payment.” Brown v. Markland (1899), 22 Ind. App. 652. “Pay for all labor and materials used in connection therewith.” King v. Downey (1900), 24 Ind. App. 262. This court, in construing the clauses just quoted, in each instance *164declared the law to be that the contract’ was one for the benefit of a third person, upon which he was entitled to recover in his own name.
7. Where the terms of a written contract are not ambiguous, indefinite or uncertain, its meaning is a matter of law for the court. Brown v. Langner (1900), 25 Ind. App. 538. Neither the contract under consideration nor the ones referred to in the cases cited are ambiguous, indefinite or uncertain. They are substantially in the same terms, and the case at bar is governed by the law as declared in the prior decisions.
But it is insisted that the intention of the parties to' the contract was, in those cases, determined by the fact that the buildings, for the construction of which such materials were furnished or labor done, were public buildings, upon which the materialman or laborer could not procure a valid mechanic ’s lien. This insistence is made in the face of the well-settled law that a written contract which is not ambiguous, indefinite or uncertain, and in regard to which no allegation of fraud or mistake is made, must be taken as it is written, and the intention of the parties determined from the terms thereof. Beard v. Lofton (1885), 102 Ind. 408, 411; Lowry v. Megee (1875), 52 Ind. 107; Harper v. Pound (1857), 10 Ind. 32.
“It was only by an inspection of the bond, that what the parties understood by it could be ascertained.” Lett v. Horner (1840), 5 Blackf. 296. And see Free v. Meikel (1872), 39 Ind. 318.
The motive leading the township trustee in the cases last cited to require a contractor to guarantee the payment of material and labor claims might very naturally be inspired by the fact that, in the absence of such guarantee, such persons would be unable to enforce payment of their claims, but the distinction between the motive which leads a person to enter into a contract and the intention deducible from the terms of the contract as it is written is a very clear one. A judge, when called upon to state the legal meaning of a *165written instrument, might very naturally mention the fact that the result of the application of the law to the terms of the instrument is a beneficent and just one, but courts do not construe written contracts with regard to the quality, possessions or other rights of the person concerned therein.
If the clause of the contract now under consideration and the clauses of those contracts heretofore enforced by this court in the cases cited are for the benefit of materialmen and laborers, they are so because the language used, in its usual and ordinary acceptation, makes them so. The legal effect of the language of the contract is not influenced by the fact that the materialmen and laborers can or cannot acquire valid liens, any more than it is by the wealth of the materialmen, the poverty of the laborer, or the ability of either to procure their pay by other litigation. Such considerations are extrinsic to the. question presented for decision. Caulfield v. Polk (1897), 17 Ind. App. 429, 433.
Had appellee relinquished a lien held by him, the surety might have cause for complaint, but he was not required by contract or otherwise to take affirmative action in order to create a lien. Whitehouse v. American Surety Co., etc. (1902), 117 Iowa 328.
Petition for rehearing overruled.
Hadley, J., dissents. Myers, C. J., absent.