State Ex Rel. Hagquist v. United States Fidelity & Guaranty Co.

265 P. 775, 125 Or. 13, 1928 Ore. LEXIS 111
CourtOregon Supreme Court
DecidedMarch 2, 1928
StatusPublished
Cited by26 cases

This text of 265 P. 775 (State Ex Rel. Hagquist v. United States Fidelity & Guaranty Co.) is published on Counsel Stack Legal Research, covering Oregon Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Ex Rel. Hagquist v. United States Fidelity & Guaranty Co., 265 P. 775, 125 Or. 13, 1928 Ore. LEXIS 111 (Or. 1928).

Opinion

McBRIDE, J.

For the purposes of this case, it may be conceded, although not herein decided, that the relator and his assignors loaned the sums of money to the Scandia Company as claimed in the *20 complaint, and that said moneys, as alleged, were actually expended by that company in paying for labor, materials and supplies used by it in the performance of Job No. 15.

The sole question here discussed is: Is the money so borrowed and expended within the intent of the bond and within the provisions of the statute so as to enable the relator to collect the money so loaned in the name of the state? The state is here as a plaintiff seeking to recover money not due or owing it, but as a statutory trustee for the benefit of relator. Upon principle, it would seem that the state’s right to interpose as a plaintiff is a statutory duty which should be permitted only in the cases provided for its exercise, and that, while the statute, permitting it to interpose as a plaintiff in respect to the matter which may be included by fair implication as being within the contemplation of the statute, should not be extended to authorize actions to be instituted under the shadow of the great name of the state to cover hardships not within a fair and liberal construction of its terms. Such seems to have been the original view of counsel, who prepared the notice, served upon the Secretary of State as a preliminary to the commencement of the present action, wherein it is stated:

“Notice is hereby given that the undersigned William Hagquist, has a claim for labor, material and provisions, performed and furnished, to-wit: for money loaned by the undersigned to the Scandia Shipbuilding Company,” etc.

The theory of plaintiff, at that time, evidently was that money furnished to pay for labor legally became ipso facto a furnishing of labor, and that money loaned and expended to pay the materialmen for material became, as a matter of law, a furnishing *21 of material, and thereby brought the plaintiff within those terms of the statute which inter alia expressly provides that “such person or persons or corporation claiming to have supplied labor or material for the work provided for in such contract shall present and file with the secretary of state,” et cetera. The underlying idea seems to have been that by some kind of legal alchemy money so furnished became transmuted into labor, material and provisions. Such is not the law. The same may be said as to provisions and supplies.

Whatever may be the rules as to municipalities acting under charter, or as to counties which are quasi corporations having for many purposes an identity of their own, the state highway commission is a board existing purely by statute and possessing only the powers granted by statute, or those necessarily implied from the powers expressly granted. It can contract for the construction of a highway, because the statute authorizes it so to do. It can require a bond from a contractor, because the law expressly requires it so to do. It can and must require such bond to be so conditioned as to provide that such contractor “promptly make payment to all persons supplying him or them with labor or materials for any prosecution of the work provided for in said contract,” and upon such bond the aggrieved person is authorized to invoke the name of the state in an action to recover for the value of such labor or materials. The state highway commission, being a board of special and limited powers, was not authorized to exact any other or different bond, or, at least, was not authorized to pledge the name and authority of the state as a plaintiff for the enforcement of any other or different bond. So the state has no stand *22 ing to enforce as plaintiff any obligation beyond that provided by statute, and when the cases are analyzed it has never attempted to do so. Thus in Clatsop County ex rel. Hildebrand v. Feldschau, 101 Or. 369 (199 Pac 953, 18 A. L. R. 1221), where Feldschau had contracted with the county to perform work in the building of the county road and executed a contract in all respects similar to the one in the case at bar, it appeared that the relator Hildebrand had furnished the contractor with materials and supplies which, in the language of Mr. Justice Bean, “consisted of camp equipment and utensils such as were used in a camp in construction work of this kind, which were only meant to be used and to last during the period of improvement.” In other words, they were consumed and used up in the course of the work being prosecuted. These were clearly within the statutory part of the bond as held by the decision of this court. Such of the goods furnished consisting of knives, forks and dishes as were not used up in the prosecution of the work were deducted from the relator’s claim.

The claim of relator Judd and company was for goods, wares and merchandise consisting of men’s wearing apparel, bedding and other things necessary for workingmen, which were sold to Feldschau and by him used in carrying on the said contract, and were exchanged by said Feldschau with his laborers for wages. The road, upon which the contractor was operating, was not situated near any town or village, and to keep his workmen clothed and supplied, it was necessary to have such supplies at hand. A workman could not work naked and could not well leave his work and go to Astoria every time he needed a pair of overalls or a jumper. To secure the greatest *23 efficiency of the working force, it was necessary to have these things at hand and Mr. Justice Bean, in the course of his opinion, used the following language. The italics are the writer’s to indicate some distinctions between that case and the case at bar. Among other matters, Mr. Justice Bean said:

“Our statute enjoins the duty upon the state of Oregon, or any municipality, county or school district, in entering into a contract for the construction of any public work, to require the usual penal bond with sureties, with the additional obligations that the contractor shall promptly make payments to all persons supplying him or them labor or materials for any prosecution of the work provided for in the contract, for the protection of laborers and materialmen, and provides that in case the contractor shall fail to pay for such work and materials, and the officers of the state of Oregon or any such municipality, county or school district within the state shall fail or neglect to require the execution of such bond, then the state of Oregon and the officers authorizing such contract, or the municipality, county or school district and the officers authorizing such contract, as the case may be, shall be jointly liable for such labor and materials. These provisions of our statute do not limit the authority of officials of a county in making a contract for public work. They do not prevent county officials from providing in such contract, and in a bond securing the performance thereof, for the payment of persons who shall supply ‘such laborers, mechanics or subcontractors with materials, supplies or provisions for carrying on such work and all just debts, dues and demands incurred in the performance of such work.’ ”

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Cite This Page — Counsel Stack

Bluebook (online)
265 P. 775, 125 Or. 13, 1928 Ore. LEXIS 111, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-hagquist-v-united-states-fidelity-guaranty-co-or-1928.