Court Opinion

ID: 8194515
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:17:40.513713+00
Date Added: 2024-06-11T16:40:33.026261
License: Public Domain

Vinje, C. J.
It is argued by counsel for the defendant that the provisions of sec. 3327a of the Statutes, which, so far as applicable, reads as follows: “All contracts involving one hundred dollars or more hereafter made or let for the performance of any work or labor or furnishing any materials when the same pertains to or is for or in or about any public building . . . shall contain a provision for the payment by the contractor of all claims for such work and labor performed and materials furnished, and no such contract shall hereafter be made or let unless the contractor shall give a good and sufficient bond, the penalty of which shall not be less than the contract price, conditioned for the faithful performance of the contract, and the payment to each and every person or party entitled thereto of all the claims for work or labor performed, and materials furnished for or in or. about or under such contract, ...” does not cover a *86case like this, because, as said by this court in Webb v. Freng, 181 Wis. 39, 194 N. W. 155, it was the policy of this statute that those furnishing material for the class of public buildings therein mentioned shall be protected, and the bond is required evidently for that purpose. It is unquestionably true that the primary purpose of the statute was to protect labor and materialmen, but it does not follow therefrom that parties may not make valid contracts which are broader than the statute. 18 A. L. R. 1227, note. We think this is such a case. It has frequently been held that a cause of action founded upon a contract made between two or more parties for the benefit of a third party may be maintained. The cases of U. S. G. Co. v. Gleason, 135 Wis. 539, 116 N. W. 238; Builders L. & S. Co. v. Chicago B. & S. Co. 167 Wis. 167, 166 N. W. 320; New York C. J. F. Co. v. Kenosha, 167 Wis. 371, 167 N. W. 451, and Warren Webster & Co. v. Beaumont Hotel Co. 151 Wis. 1, 138 N. W. 102, are typical examples of cases of that kind relating to matters similar to the suit now in question, all of them having arisen upon surety bonds for the faithful construction of public buildings. It is true that in those cases the actions were brought either by materialmen or by laborers who had furnished material or labor that had gone into the construction of the building. Those cases were strictly cases coming within the primary purpose of the statute.
We have, however, in this case a contract requiring the contractor to maintain liability insurance sufficient to protect the owner against all claims for damages or injury to all persons engaged upon the work strictly in accordance with sec. 3327a of our Statutes. And the bond guarantees that “the principal shall faithfully perform the contract on his part, and satisfy all claims and demands incurred for the same.” Now it is evident that under such a contract it is just as essential for the contractor to incur obligations for liability insurance as it is for him to incur obligations for the procuring of labor and material in the construction of the building. It is familiar law that the contract and the *87bond given for the faithful performance thereof must be construed as one contract. Builders L. & S. Co. v. Chicago B. & S. Co. 167 Wis. 167, 166 N. W. 320. That being so, the defendant obligated himself to pay any claim or demand which the contractor lawfully incurred and was required to incur in the prosecution of the work of the construction of the building. The premium for liability insurance was such a claim. The bond in question was given for a money consideration; it therefore has all the essential features of an insurance contract and should be subject to the rules of construction applicable to such contracts. United American F. Ins. Co. v. American B. Co. 146 Wis. 573, 131 N. W. 994, and cases cited; Title G. & S. Co. v. State, 61 Ind. App. 268, 109 N. E. 237. It is only gratuitous sureties that are favorites of the law and have a right to stand upon the strict terms of their obligations when ascertained. W. W. Kimball Co. v. Baker, 62 Wis. 526, 22 N. W. 730; Webb v. Freng, 181 Wis. 39, 194 N. W. 155.
In Concrete S. Co. v. Ill. S. Co. 163 Wis. 41, 157 N. W. 543, it was argued that since there was no express mention of labor and material in the bond it did not cover claims for those. The court replying to this said: “It is true in the case at bar that there is no express mention in the bond of labor and material, but the provisions of the bond, 'satisfy all claims and demands incurred for the same,’ are broad enough to cover claims and demands incurred for labor and material.” So here the provisions of the bond, “satisfy all claims and demands incurred for the same,” are broad enough to cover the premium for liability insurance which was necessarily incurred in the performance of the contract under its agreement with the Board of Regents of the Normal Schools. The cases heretofore referred to from our court have discussed the questions involved in this case so fully that no further restatement of them is deemed necessary.
By the Court. — Order affirmed.