Truscon Steel Co. v. B. & T. Const. Co.

129 So. 644, 170 La. 1083, 1930 La. LEXIS 1867
CourtSupreme Court of Louisiana
DecidedJuly 2, 1930
DocketNo. 27505.
StatusPublished
Cited by9 cases

This text of 129 So. 644 (Truscon Steel Co. v. B. & T. Const. Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Truscon Steel Co. v. B. & T. Const. Co., 129 So. 644, 170 La. 1083, 1930 La. LEXIS 1867 (La. 1930).

Opinion

ROGERS, J.

This suit grows out of the construction of the Jordan building in the city of Shreveport. The plaintiff is one of the materialmen, and the defendants are -the • contractors and the surety on their bond. The- contract was executed and the bond given under the provisions ■of Act No. 139 of -1922.

The contractors defaulted, and a concursus proceeding was provoked by the owner. In this proceeding a judgment was rendered canceling all the liens recorded against the building and also canceling the bond signed by the defendant surety company! The plaintiff, not having recorded a lien nor served an account on the owner, was not made a party to the concursus proceeding.

In the present sui-t the contractors offered no defense. The surety company, however, denied liability on the ground that the bond sued on had been canceled prior to the institution of plaintiff’s action. The court below gave plaintiff judgment against the contractors for the amount sued for, but rejected plaintiff’s demand as against the surety company. From this judgment, the plaintiff has appealed."

It is now well settled that the furnisher of material for a building is not required to record his claim nor to serve it on the owner in order to preserve his right of- action against the contractor’s surety. Madison Lbr. Co. v. Bachemin, 166 La. 1066, 118 So. 144, and authorities therein' cited-.' Counsel for the appellee admit that this is so, but they earnestly argue that the rule stated is inapplicable to this ease, which is one wherein the material-men, who failed to record his claim or to serve it on the' owner or to intervene in the concursus proceeding, seeks to recover on the contractor’s bond after it.had been canceled by a judgment of: court..

It cannot be disputed that plaintiff’s right of action for the breach of the condition of the bond arose prior to the sorcalled cancellation of that instrument. Hence the question to be determined is whether the judgment or cancellation can operate to plaintiff’s prejudice. The bond being purely statutory in character, recourse must be had to the controlling statute (Act No. 139 of 1922) in order to ascertain the rights and the remedies of the parties.

Section 2 of the legislative act provides generally for a bond to be attached to and recorded with the contract; for the filing of claims by mechanics and materialmen with the owner or his representative; for the recordation of such claims within thirty days after the registry of the owner’s acceptance or the contractor’s default; for the erasure of inscriptions; and for the establishment and payment of claims.by the owner. The statutory provision specifically provides that if, at the expiration of thirty days after registry of the owner’s acceptance or the contractor’s default, there are no recorded claims, “the Recorder of Mortgages, shall upon written demand of any party interested, cancel and erase from the books of his office all inscriptions resulting from the recordation of said contract *1088 or bond as to all parties except the contractor. If at the expiration of thirty days there are such recorded claims filed, the owner or other interested person may file a petition in a Court of competent jurisdiction citing all claimants, including the undertaker, contractor, master mechanic, or engineer, against whom said claims are filed and the surety on the bond, and shall therein assert whatever claim he has against any or all of them and require said claimants to assert their respective claims; and all of said claims shall be tried in coneursus.”

It is argued on behalf of the appellee that under the statutory provision, if at the expiration of thirty days from the registry of the owner’s acceptance or the contractor’s default there are no recorded claims, the surety, as an interested party, may servé a written demand on the recorder of mortgages for the cancellation of the contractor’s bond; or if at the expiration of the thirty-day period there are recorded claims and a coneursus is provoked, which was the case here, the contractor’s surety, as a necessary party, may require a final disposition in the proceeding of its liability and a cancellation of its obligation.

The argument runs counter to the reason for decision in the line of cases we have hereinabove referred to, holding that a surety company, which for a consideration has voluntarily entered into the contract, must pay the workmen and materialmen in case the contractor fails to do so, even though the claimants have not recorded their claims nor served them on the owner, particularly where the failure to perform these acts has not resulted in any loss to the surety company.

The statutes construed in those cases contain language similar to the statute under consideration in this case. In those statutes, as in section 5 of the one now before us, it is expressly provided that the surety shall be liable to such defenses only as the contractor is authorized to make. The legislative act governing the present controversy further provides, in section 14, that “nothing in this act shall be so construed as to deprive any claimant within the terms of this act of his right of action upon the bond, which right shall accrue at any time after the maturity of his claim.”

Appellee contends that the provision of section 5 of Act No. 139 of 1922, hereinabove referred to,, limits the surety to the same defenses-as the contractor only so long as the bond is in force, but that, after the bond has ceased to exist, whether by cancellation if no liens are filed within thirty days after the acceptance of the work by the owner or the default of the contractor, or by final judgment in a coneursus proceeding, the right of action against the surety is abated; that section 14 of the statute, which we have quoted in full, means a claimant who has complied with the terms of the statute by recording his claim and by serving a notice thereof upon the owner.

The answer to the second of appellee’s contentions is to be found in the settled jurisprudence which holds that a materialman is within the terms of the law so far as the contractor’s surety is concerned, notwithstanding he fails to record his claim or to serve it on the owner/

The answer to the first of appellee’s contentions is to be found in the interpretation of the statute as a whole, with reference particularly to the rule of statutory construction that the general purpose and object of the law must be kept in mind and the statute given such fair and reasonable interpretation as will effect that purpose and object. The statute under consideration here was en *1090 acted for the benefit and protection of the owner, on the one hand, and the workmen and materialmen, on the other hand, and not in the interest of the contractor’s surety. Hence it should be interpreted so as to achieve, and not to defeat, the purpose and object of its enactment.

It will be observed that no period of time is fixed in the statute for the duration of the surety’s responsibility. Hence, the surety is not released from liability to a materialman until his claim has been paid or has become prescribed as provided by law.

Section 1 of Act No. 139 of 1922 provides for the reduction to writing of building contracts and for their recordation in the mortgage records of the parish wherein the building or work is to be erected or performed.

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Bluebook (online)
129 So. 644, 170 La. 1083, 1930 La. LEXIS 1867, Counsel Stack Legal Research, https://law.counselstack.com/opinion/truscon-steel-co-v-b-t-const-co-la-1930.