Overman & Co. v. Maryland Casualty Co.

136 S.E. 250, 193 N.C. 86, 1927 N.C. LEXIS 278

• Court: Supreme Court of North Carolina
• Decided: January 12, 1927
• Status: Published

Opinion

Clarkson, J.

Elliott & Sons and R. E. Boggs, the contractors, with the Maryland Casualty Company, on 14 December, 1921, gave a bond to the State Highway Commission in the sum of $146,540.00. The material conditions of the bond, to be considered in this action, were:

(1) “For the improvement of a certain section of highway known as State Highway Project No. 525, road between Lexington and Rowan County line, beginning at station 0-00 and ending at station 541-12, situated in the county of Davidson, North Carolina, being approximately 10.24 miles long, approximately estimated to cost $293',080.”

(2) “And shall well and truly, in a manner satisfactory to the State Highway Engineer, complete the work contracted for . . . and shall well and truly pay all and every person furnishing material or performing any labor in and about the construction of said roadway, all and every sum or sums of money, due him, them, or any of them, for all such labor and materials, for which the contractor is liable.”

There are only three main questions presented:

(1) Defendant introduced no evidence, and at the close of plaintiff’s evidence moved for judgment as in case of nonsuit. C. S., 567. The court below denied the motion and defendant assigned error. In this we think the court below correct.

(2) Were said candies, cigars, cigarettes, tobacco, ginger ale and other soft drinks, “materials furnished,” within the meaning of the contract and bond?

(3) Is plaintiff barred by section 3 of chapter 160 of the Public Laws of 1923, as alleged in the answer?

In Brogan v. National Surety Co., 246 U. S., 257, the Court sáid: “As shown by these cases, the act and the bonds given under it, must be construed liberally for the protection of those who furnish labor or materials for the prosecution of public work.” This rule of construction was adopted by this Court in Plyler v. Elliott, 191 N. C., 54, in a ease similar to the one at bar. The plaintiffs in both cases are wholesale grocers of Salisbury, and both of them sold Elliott & Sons materials for use in their construction camp on State Highway Project No. 525.

In Cornelius v. Lampton, 189 N. C., at p. 718, this Court said, in reference to the exact words of this bond: “It will be noted that the contract is elastic, it covers 'furnishing material or performing labor in and about the construction of said roadway.’ ”

The general basis of liability is necessity.

In Aderholt v. Condon, 189 N. C., at p. 755, this Court said: “The bond was to pay for labor and material for which all the contractors were liable.” This standard of liability, in Plyler v. Elliott, supra, required that the materials must have been necessary. In Gravel Co. v. Casually Co., 191 N. C., at 317, it was said: “The material was, therefore, 'furnished’ to the contractor, and, hence of necessity the contractor was liable for the purchase price. Therefore, the contractor being liable, the bond, by its express terms, guaranteed payment.”

On all the issues submitted to them the jury found that all of the goods sold Elliott & Sons by plaintiff were necessary and that they were wholly consumed in and about the construction of the work on the project, except the 7th issue as to candies, cigars, cigarettes, tobacco, ginger ale and other soft drinks, which the court below instructed them to answer “No” — that they were not necessities.

(A) Groceries and provisions:

The following eases hold that groceries and provisions furnished to the contractor and necessarily consumed in and about the construction of the work are protected by the bond: Plyler v. Elliott, supra, 131 S. E., 306; Brogan v. Nat. Surely Co., 246 U. S., 257, 62 L. Ed., 703, L. R. A., 1918d 776; Fidelity Deposit Co. of Md. v. Bailey (Va.), 133 S. E., 797; Southern Surely Co. v. Bank (Texas), 275 S. W., 436; Clatsop County v. Feldschau (Ore.), 196 Pac., 379.

(B) Hay and Grain:

The following cases establish that foodstuffs for the horses and mules furnished to the contractor and necessarily consumed in and about the construction of the work is protected by the bond. Plyler v. Elliott, supra, 131 S. E., 306; Early & Daniel v. Surety Co. (Fourth Circuit), 5 Fed. (2d Series), 670; U. S., etc., v. Lowrance (8th Circuit), 252 Fed., 122; Franzen v. Surety Co. (Wyo.), 245 Pac. 30; Chappell v. Surety Co., 191 N. C., 703, 133 S. E., 21.

(C) Gasoline and Lubricating Oil:

This Court has never directly held that gas and oil are covered by the bond, although the case of Cornelius v. Lampton, 189 N. C., 714, by analogy settles the question. In that case “the man power is exchanged for the electric power.” The following cases hold that gas and oil necessarily consumed in and about the construction of the work, and for which the contractor is liable, are protected by the bond. State, etc., U. S. F. & G. Co., 10 Ohio App., 141; Bartles-Scott Oil Co. v. Western Surety Co. (Minn.), 200 N. W., 937; Smith v. Oosting (Mich.), 203 N. W., 131; Oil Co. v. Commary-Peterson Co., (Cal.), 163 Pac., 702; Fuller v. Brooks (Okla.), 246 Pac., 369.

We come now to consider “were said candies, cigars, cigarettes, tobacco, ginger ale and other soft drinks necessary” within the meaning of the bond?

Necessary, defined by Webster: “Impossible to be otherwise, or to be dispensed with, without preventing the attainment of a' desired result; indispensable; requisite; essential.”

We would not term them necessaries or luxuries. They are in the twilight zone. In the Plyler case, supra, the testimony of Sam Elliott in regard to tobacco, etc., was: “The few items of tobacco, cigarettes and candy included in the account sued on here were deducted from their wages. I guess they had to have these things.” This matter was not passed on in that case. We said, at p. 60: “For this reason, the question of the liability of defendant, Surety Company, as to provisions furnished to the hands, the necessity, and the amount due for feedstuffs must be submitted to a jury to determine the facts, unless the facts can be agreed upon.” As a matter of law, we cannot hold that they were necessary to be furnished under the language of the bond. In fact, the Court, in Clatsop County v. Feldschau, supra, speaking to the subject says: “We are of the opinion that tobacco, cigars and cigarettes furnished the men cannot be deemed supplies or provisions necessary to the prosecution of the work, and this item . . . is disallowed.”

The final proposition: “Is plaintiff barred by section 3 of chapter 160, Public Laws of 1923, as alleged in the answer?” We cannot so hold. That project No. 525 was finished on 31 August, 1923, and that no work was done on it thereafter, but that final estimates were made by the State Highway Commission on 4 September, 1923, is undisputed on the record.

The plaintiff offered in evidence the general provisions of the contract, including sections 71 and 73, as follows: "Final Payment: Whenever the improvement provided for by the contract shall have been completely performed on the part of the contractor, and all parts of the work have been approved by the engineer, according to the contract, a final estimate showing the value of the work will be prepared by the engineer as soon as the necessary measurements can be made, all prior certificates of estimates upon which payments have been made being approximate only and subject to correction in the final payment. The amount of this estimate, less any sums that may have been deducted or retained under the provisions of the contract, will be paid to the contractor within 30 days after the final estimate is forwarded by the engineer, provided that the contractor has properly maintained the road as hereinafter specified. Maintenance: The-contractor shall maintain the road in first-class condition for 30 days after it is completed, and 15% of the final estimate will be retained by the State Highway Commission to enforce this requirement; except that the engineer may, in his discretion, release the contractor from the further maintenance of sections of the road, not less than two miles in length, which have been satisfactorily maintained under traffic for at least 30 days, unless otherwise provided in ‘Special Provisions.’ ”

Public 'Laws 1923, section 3, chapter 160 (amendment adding another paragraph to Public Laws, 1921, chapter 2, section 15), is as follows:

“Section 3. Amend section fifteen by adding another paragraph, which shall read as follows: ‘Whenever any contractor engaged in working upon the State highway, and under contract with the State Highway Commission, shall incur liability for labor, material or other cause, and for which such contractor, or his bondsmen, may be liable, all such claims shall be presented in writing to said commission within six months after the completion of said work, and failure to file such claim within said time shall be a complete bar against recovery from said commission or any bondsmen: Provided, that this section shall not be in force and effect until six months from the ratification of this act.’” Ratified 3 March, 1923. 3 C. S., 3846(v).

Is this act prospective or retrospective? We think it prospective. The matter is clearly stated in 25 R. C. L., p. 186, part sec. 35, under “Statutes”: “Every law that takes away or impairs rights that have vested under existing laws is generally unjust and may be oppressive. Hence such laws have always been looked on with disfavor. . . While the Constitution of the United States and the constitutions of many of the states contain no provisions directly forbidding retrospective laws, such laws are void if they impair the obligations of contracts or vested rights. Even though the Legislature may have the power to enact retrospective laws, a construction which gives to a statute a retroactive operation is not favored, and such effect will not be given unless it is distinctly expressed or clearly and necessarily implied that the statute is to have a retroactive effect. There is always a presumption that statutes are intended to operate prospectively only, and words ought not to have a retrospective operation unless they are so clear, strong, and imperative that no other meaning can be annexed to them, or unless the intention of the Legislature cannot be otherwise satisfied. Every reasonable doubt is resolved against a retroactive operation of a statute.” Hicks v. Kearney, 189 N. C., 316, and cases cited: Comrs. v. Blue, 190 N. C., 638 and cases cited. See State Prison v. Bonding Co., 192 N. C., at p. 394, construing this act.

In Trust Co. v. Highway Com., 190 N. C., p. 680, at p. 683, it is held: “An action on a bond given to the State Highway Commission, commenced since 10 September, 1925, must be brought in one of the counties in which the work and labor was done and performed, and not elsewhere; only one action may now be brought on such bond. Reference is made to said chapter 260, Public Laws 1925, for the procedure in such action. This statute amends, not C. S., 2445, but chapter 2, Public Laws of 1921, which is the State Highway Act. It does not apply to actions commenced prior to 10 September, 1925.” The language of the contract is, “whenever the improvement provided for by the contract shall have been completely performed,” etc., then provision is made for approval by engineer, final estimate, payment, etc. We think, under the contract, that the improvement was completely performed on 31 August, 1923. The record discloses that no other improvements were made after that date. We think it would be “sticking in the bark” under the language of the contract to hold the work was not completed until approved by engineer, etc., although that was done after the improvement or work was already completed. Hnder the surety bond, the work contracted for was to be completed in a manner satisfactory to the State Highway Engineer. On 31 August, 1923, the work was completed. On 4 September, 1923, the. final estimate and acceptance was made. J. W. Jenkins, the resident engineer for the Highway Commission, in his testimony, says: “I began work there in December, 1921, and stayed there until the work was completed the last of August, 1923.”

The statute became operative on 3 September, 1923, after the work was completed and a day before the final estimates and acceptance was made. Hnder the facts and circumstances of this case, we think the act was prospective — the work was completed before the act went into effect and the act has no application.

The excellent brief of plaintiff’s counsel has been helpful.

We can find in the judgment below

No error.