Court Opinion

ID: 3505259
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:15:20.951169+00
Date Added: 2024-06-11T13:54:46.138881
License: Public Domain

In the petition for reargument counsel for the appellant cite two recent Federal cases, U.S.F.  G. Co. v. Vermont Marble Co.16 F.2d 83, from the Seventh circuit, and Federal Surety Co. v. Minneapolis Steel  Mach. Co. 17 F.2d 242, from the Eighth circuit. The first was governed by the law of Minnesota and a situation where there was no lien; nor did the bond assume to be for the use of laborers and materialmen. The second involved a Montana public contract. There was no lien. Neither case controls.
Our decision should not be misunderstood. We held that it was intended to give those situated like the plaintiff a direct right of action on the bond. The language of the bond justifies such construction and Horton v. Crowley Elec. Co. 108 Minn. 508,122 N.W. 312, approves it. Further, we held that the right to a lien accruing to a materialman against the property of the owner of the land gives whatever of consideration or privity or interest which is necessary to make the surety's promise effective at the suit of the materialman. We are content with the conclusion reached. It may be true, as stated by appellant, that when suit was brought the right to file a lien had lapsed by time. That is not the point. When the bond was given for the use of laborers and materialmen, one afterwards becoming a laborer or materialman had a right of lien and the property of the owner was subject to it. That we held was a sufficient basis for a direct action by the materialmen against the surety.
It was our suggestion but not a holding that it may be the law that a property owner, if he chooses to purchase or require his contractor to provide insurance in favor of laborers and materialmen who help in the construction of his building, not merely by way of indemnity in the event that he shall be subjected to liens but for their use and benefit, the insuring company may be required to abide by its undertaking in a personal suit brought by the materialman or laborer; and we cited cases showing a trend that way.
Motion for reargument denied. *Page 490