Graybar Electric Co. v. St. Paul Fire & Marine Insurance Co.

195 So. 2d 82, 1967 Miss. LEXIS 1430
CourtMississippi Supreme Court
DecidedFebruary 13, 1967
DocketNo. 44145
StatusPublished
Cited by1 cases

This text of 195 So. 2d 82 (Graybar Electric Co. v. St. Paul Fire & Marine Insurance Co.) is published on Counsel Stack Legal Research, covering Mississippi Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Graybar Electric Co. v. St. Paul Fire & Marine Insurance Co., 195 So. 2d 82, 1967 Miss. LEXIS 1430 (Mich. 1967).

Opinion

JONES, Justice.

St. Joseph’s Catholic Church of the Diocese of Natchez-Jackson, by proper authorities, contracted with Greenville Lumber Company, Inc., to construct an elementary school and convent in Washington County.

The contractor gave a labor and material payment bond in favor of the church, signed by the original contractor, as principal, and St. Paul Fire and Marine Insurance Company, Surety.

A few days later the contractor entered into a written agreement with Noel Wynne to furnish all labor and materials for electrical work in said buildings. While this contract, in the caption, showed “Ace Electric Company” as the subcontractor, it was signed “Sub-contractor, Noel Wynne.”

The original contract and the bond were executed April 4, 1964. The subcontract was signed and dated April 8, 1964. The subcontractor was to be paid $15,000 with provision for additions and deductions for changes. Within one year after completion of the buildings, Graybar Electric Com[83]*83pany, Inc., appellant, filed suit in the Circuit Court of Washington County against the bonding company, heretofore named, the principal contractor above named, Ace Electrical Contractors, Inc., Noel Wynne d/b/a Ace Electrical Contractors, and the Bishop of the Diocese of Natchez-Jackson, as trustee, etc.

Appellant alleged it had sold to the subcontractor electrical materials and equipment, actually delivered and installed in said building, on which materials and equipment there was then due and unpaid the sum of $8,797.09, plus interest at six percent per annum from December 1, 1964.

There were attached, as exhibits to the declaration, a copy of the bond aforesaid and a statement of the total of each invoice, plus the total of all invoices, aggregating the amount aforesaid and bearing on its face a notation, “above inv. to my knowledge are correct (signed) Noel Wynne.” There were also attached to the declaration copies of the various invoices showing in detail and with itemization the items purchased and an affidavit of its correctness. But an affidavit was filed by the lumber company denying its correctness. We need not discuss this, since the account was proved by appellant on the trial through its own personnel, and by Noel Wynne, who made no answer nor defense but who testified. Further, during argument before this Court, counsel was asked if there was any question as to the account and as to whether the materials went into the buildings, and the answer was no.

The defendants, other than Wynne, answered. Greenville Lumber Company answered, claiming: (1) Payment before notice of claim by five checks to the subcontractor Wynne, the last on November 23, 1964; (2) No breach of the bond; and, (3) Payment by Wynne to appellant.

There was no evidence to support the third defense.

At the conclusion of the evidence, the jury, by direction of the court, found:

(1) For appellant against Wynne individually and Ace Electrical Contractors, Inc., for $8,797.09, with 6% interest from December 3, 1964;
(2) For appellant against Greenville Lumber Company, Inc., for $342.16 with interest as above. (For extras admitted by the lumber company to be due by it.)
(3) In favor of the bonding company, and the bishop.

There is no appeal as to the bishop, or Wynne, nor by the lumber company.

Appellant assigns as error the failure of the lower court to grant it a peremptory instruction against the bonding company and the lumber company, and in directing verdicts as heretofore shown.

Perhaps the case may best be understood by discussing those points argued by appel-lees to sustain the verdicts and judgment.

It is first said that the bond does not inure to the benefit of appellant, a ma-terialman supplying a subcontractor.

There are cases decided by this Court holding that, under the wording of the bonds there involved, a supplier of a subcontractor could not recover. Flowever, the wording of this bond makes them inapplicable.

It is said in 17 Am.Jur.2d Contractors’ Bonds section 18 (1964) :

“In accordance with the principles discussed in the preceding sections, the courts generally sustain the right of a person furnishing labor or materials to recover on a private building contractor’s bond naming the owner of the property as obligee, conditioned that the contractor shall pay all claims for labor and materials or that he shall pay laborers and materialmen. A fortiori, where a private contractor’s bond conditioned for the payment of such persons or that they may sue thereon, the general rule permitting a recovery on a contract by a third party for whose benefit the contractor is in[84]*84tended clearly permits a recovery on the bond by a laborer or materialman. * * * »

Our Court in Western Casualty & Surety Co. v. Stribling Bros. Machinery Co., 244 Miss. 12, 139 So.2d 838 (1962) stated:

“ * * * We are of the opinion that the rule is and should be as follows: Other than persons furnishing labor or materials, in order for a third person to recover on a private contract performance bond it must appear (1) that the terms of the contract are expressly broad enough to include the third party either by name or as one of a specified class, and (2) the said third party was evidently within the intent of the terms so used, and (3) that the obligee had, in fact, a substantial and articulate interest in the welfare of the said third party in respect to the subject of the contract. Hartford Accident & Indemnity Co. v. Hewes, 190 Miss. 225, 199 So. 93, [772,] and A.L.I., Restatement of the Law of Security, Sections 165 and 166.
“The material inquiry in surety contracts in connection with construction enterprise is whether there is a purpose to benefit someone in addition to the one for whom the construction is being done. * * * ” 244 Miss, at 23, 139 So.2d at 840-841.
The contract here provided:
GREENVILLE LUMBER COMPANY, INC.
Box 5155, Greenville, Mississippi, as Principal, hereinafter called Principal, and ST. PAUL FIRE AND MARINE INSURANCE COMPANY, a corporation organized under the laws of the State of Minnesota, as Surety, hereinafter called Surety, are held and firmly bound unto St. Joseph’s Catholic Church, Diocese of Natchez-Jackson as Obligee, hereinafter called Owner, for the use and benefit of claimants as hereinbelow defined, * * *.
NOW, THEREFORE, THE CONDITION OF THIS OBLIGATION is such that if the Principal shall promptly make payment to all claimants as hereinafter defined, for all labor and material used or reasonably required for use in the per- ■ formance of the Contract, then this obligation shall be void; otherwise it shall remain in full force and effect, subject, however, to the following conditions:
(1) A claimant is defined as one having a direct contract with the Principal or with a sub-contractor of the Principal for labor, material, or both, used or reasonably required for use in the performance of the contract, labor and material being construed to include that part of water, gas, power, light, heat, oil, gasoline, telephone service or rental of equipment directly applicable to the Contract.

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Bluebook (online)
195 So. 2d 82, 1967 Miss. LEXIS 1430, Counsel Stack Legal Research, https://law.counselstack.com/opinion/graybar-electric-co-v-st-paul-fire-marine-insurance-co-miss-1967.