Finch v. Enke

222 N.W. 657, 54 S.D. 164, 1929 S.D. LEXIS 297
CourtSouth Dakota Supreme Court
DecidedJanuary 5, 1929
DocketFile No. 6472
StatusPublished
Cited by10 cases

This text of 222 N.W. 657 (Finch v. Enke) is published on Counsel Stack Legal Research, covering South Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Finch v. Enke, 222 N.W. 657, 54 S.D. 164, 1929 S.D. LEXIS 297 (S.D. 1929).

Opinions

MISER, C.

This appeal is from an order sustaining a demurrer to appellant’s complaint. In the complaint it is alleged that defendant Enke made a contract with the state of South Dakota for the building of highway No. 15, and agreed therein the pay “all just claims for materials, supplies, and labor, and all other just claims incurred by him or any of his subcontractors, in carrying out the provisions of this contract,” and further agreed that the contract bond should be held to cover all such claims. The contract bond furnished therewith was executed by respondent Federal Surety Company, as surety. Among the conditions of such bond was one that the principal therein should “pay or cause to be paid the wages stipulated and agreed to be paid each and every laborer employed by the principal, his agent, or subcontractor, and all claims incurred for materials, supplies, tools, and appliances, in carrying out the provisions of said contract.” Thereafter defendant Hammond, as a subcontractor of defendant Enke, did the road work described on the contract. While Hammond was doing the work, appellants sold and delivered to Hammond food, groceries, and necessities of life, which were consumed and used by him in feeding the men who worked on the road project. The complaint alleges eight causes of action. The first, second, third, and fourth were based upon claims for meat, groceries, and necessities of life. The sixth was based upon a check given by Hammond [166]*166for labor. The seventh and eighth were 'based upon checks given by him for groceries. The firth cause of action was based upon a ■claim for bolts, blades, and other material that went into the construction of the road; but the demurrer thereto was overruled.

Two questions are therefore presented by this appeal: First, are the provisions of the contract and bond broad enough to include the groceries, meats, etc., furnished to- the subcontractor? Second, do- the provisions of the contract and bond and the indorsement and delivery by the payees of checks for labor and groceries used as aforesaid, and which checks have been dishonored, give to the indorsee and holder thereof a cause of action against the surety for the debts incurred by the contractor for such labor and groceries ?

Many courts, including the United States Supreme Court, hold that groceries, provisions, supplies, etc., furnished a contractor for public work, and necessarily used and consumed by the men during the progress of the work, are -materials within the meaning of a statutory bond conditioned for.the payment of all labor or materials used in the performance of the contract. 46 A. L. R. 512. A leading case taking that view is Brogan v. National Surety Co., 246 U. S. 257, 38 S. Ct. 250, 62 L. Ed. 703, L. R. A. 1918D, 776. In that case, the bond was such as required by 28 Stat. 278 (40 USCA § 270), and bound the contractor “to ‘make full payment to all persons supplying him with labor or materials in the prosecution of the work provided for in’ the contract.” In the case at bar, it is not alleged that it was absolutely necessary for the sub-contractor to furnish board to the men. However, the language of the bond in the case at bar -differs from that of the bond in the Brogan Case. As. pointed out by this -court in March v. Butler (S. D.), 220 N. W. 461, “supplies” is a'broader and more comprehensive term than “materials.” On that point, this -court cited the case of Bricker v. Rollins, 178 Cal. 347, 173 P. 592. In the California case, it does not appear that the furnishing of board by the contractor was indispensable to the performance of the -work, as it was in the Brogan Case; but, in the California case, as in the case at bar, the language of the bond was much more comprehensive than the language of the bond in the Brogan Case and of 28 Stat. 278, requiring the bond. Furthermore, as stated in Franzen v. Southern Surety Co., 35 Wyo. 15, 246 P. 30, 46 A. L. [167]*167R. 496, the fundamental -question to- be determined is whether, when the surety executed the -bond, the payment of claims for groceries could reasonably be regarded as within the contemplation cf the parties.

In the case last cited, the Wyoming court s-aid: “We think, in short, that -where labor or material furnished is necessary or even proper, for the execution of any particular work, under a contract like that in the case at bar, and the furnishing of such labor and material may be fairly held to- have been in contemplation of the parties when executing the contract and the bond therefor, and the same is -of a nature so as to be necessarily wholly consumed- in the particular work, then it is protected under a contract and bond-therefor, and the same is of a nature so as to be necessarily wholly consumed in the particular work, then it is protected under a contract and bond like- those in the case at bar.”

In the annotation thereto, 46 A. L. R. 511, it is stated that the question whether suc-h item contributes to, and- is necessary in, the completion of the work, and is used- or consumed in the prosecution thereof, is generally decisive on the question of liability on a contractor’s bond; but it is also- stated therein that that criterion is not always to be applied to the exclusion of other considerations bearing on the question of whether the item- can be reasonably regarded as within the contemplation of the parties. The complaint in the case at bar fairly alleges that the groceries furnished contributed to the completion of the -work and were used and wholly consumed .in the prosecution thereof; and, while it is not alleged that they were necessary to the completion of the work, their use to feed the men doing the work was a proper use. The manifest purpose of such a bond and the -beneficial object of the state in requiring such bonds are to afford to laborers and those who furnish materials and supplies a measure of security for their contributions to- the public improvement. However differently other courts may construe other bonds in the light of different conditions, we are of the opinion that one- -who, in 1924, became surety for the performance of a contract for building a state trunk highway in South Dakota may fairly and reasonably be held to have contemplated that groceries, meats, and provisions would be furnished to the contractor’s road camp and -consumed by the men in -doing the work, and that claims therefor would be incurred by the contractor [168]*168and -his subcontractors in carrying out the provisions of the contract. We are of the opinion that a surety otherwise liable should not escape liability merely because — for aught that appears to the contrary — the highway might have been built without the contractor himself feeding the men. We therefore conclude that the failure to allege the indispensable necessity on the part of the subcontractor to board his men did not render the first four causes of action demurrable.

In considering the second question presented by this appeal, it is well to observe that we are not considering whether the assignment of a check is an assignment of the fund on which it is drawn. Ailthough these checks were negotiable instruments and indorsed as such, the question is not to be answered by a mere resort to section 1891, R. C. 1919. Parker, J., in his dissenting opinion to National Market Co. v. Maryland Casualty Co., 100 Wash. 377, 174 P. 481, 1 A. L. R.

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Cite This Page — Counsel Stack

Bluebook (online)
222 N.W. 657, 54 S.D. 164, 1929 S.D. LEXIS 297, Counsel Stack Legal Research, https://law.counselstack.com/opinion/finch-v-enke-sd-1929.