Court Opinion

ID: 6883727
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:22:37.801398+00
Date Added: 2024-06-11T16:05:39.483485
License: Public Domain

IIANEY, Circuit Judge
(concurring).
The contract with the state required the firm to “carry public liability insurance to indemnify the public for injuries or damages sustained by reason of the carrying on the work” and to furnish a surety bond. On the same day the contract was signed, a bond, with appellant as surety, was furnished containing the following condition that if the firm " * * * shall in all respects faithfully perform all of the provisions of said contract, and his, their or its obligations thereunder * * * and shall save harmless the State of Montana * * * from any damages growing out of the carelessness of said Contractor or his, their, or its servants * * * then this obligation to be void or otherwise to be and remain in full force and virtue.”
A policy, with appellant as insurer, was thereafter furnished, but its provisions excluded liability for the accident in question.
First. In determining the liability of the surety, the contract and bond are to be construed together. Federal Surety Co. v. Basin Const. Co., 91 Mont. 114, 126, 5 P.2d 775. By becoming surety, appellant assumed obligations which were “coextensive with and measured by the promises of the principal to the obligee contained in the contract”. Id. Therefore appellant as surety promised to supply the insurance mentioned in the contract.
Second. The purpose of the contract provision was to protect the state. It was actuated, not because of the benevolence of the state toward persons who were injured, but because of the state’s anxiety that performance of the contract might be delayed or prevented by vexatious actions or other proceedings against the contractor. Even so, it incidentally benefited people who might be injured, and was therefore a contract for the benefit of third persons. Such persons, in Montana, may sue and recover from the surety directly on the bond. Gary Hay & Grain Co., Inc., v. Carlson, 79 Mont. 111, 255 P. 722. Recovery here, therefore, was properly allowed under the bond, regardless of the terms of the policy.
Third. I do not believe this case is a proper one for the invocation of an equitable estoppel. My understanding of such an estoppel is the case where one, by his conduct has mislead another who relies on the fact indicated by such conduct, to his disadvantage. See 21 C.J. 1113, § 116. While an estoppel might arise here as against the state, appellee has relied on no conduct of appellant, and consequently has neither taken nor changed her position as a result of any action or conduct of appellant.
I think the judgment should be affirmed, but on the ground that recovery is had under the bond.