Wilson-Stamey Grocery Co. v. Ross

CoNNOR, J. Upon its appeal to this Court defendant, National Surety Company, relies chiefly upon its assignment of error based upon its exception to the refusal of the trial court to allow its motion for judgment as of nonsuit, at the close of the evidence offered by plaintiff. No evidence was offered by either of the defendants. Plaintiff seeks to recover in this action of defendant, National Surety Company, for the merchandise sold and delivered by it to the defendant, *111 J. B. Ross, Jr., by reason of its liability as surety on tbe bond executed and filed with the State Highway Commission. This it cannot do, unless the evidence offered at the trial is sufficient to sustain the allegations of the complaint. The material allegations of the complaint, as affecting the surety on the bond, are set out in paragraph 3. These allegations are denied by defendant. In Plyler v. Elliott, 191 N. C., 54, there was evidence tending to sustain allegations identical with those of the complaint in this action. A new trial was ordered in that case, because of error in the instruction of the court to the jury, that if they found the facts to be as testified by the witnesses they should answer the issue involving the liability of the surety on a bond identical with the bond upon which defendant in this action is surety, “No.” Plyler v. Elliott has been approved in Trust Co. v. Porter, 191 N. C., 672, in Chappell v. Surety Co., 191 N. C., 703, in Overman v. Casualty Co., 193 N. C., 86, and in Wiseman v. Lacy, 193 N. C., 751. In these cases it is held by this Court, following in that respect Brogan v. Nat. Surety Co., 246 U. S., 257, 62 L. Ed., 703, L. R. A., 1918D, 776, that the basis of the liability of the surety on a contractor’s bond, conditioned as the bond in the instant case, for materials furnished or labor performed in and about the construction of the road, which is the subject-matter of the contract, for the performance of which the bond is given, is necessity — that is, that the articles furnished were necessary for the performance by the contractor, the principal in the bond, of his contract with the obligee. Significance was also given in the decisions in these cases to the fact that the articles sold and delivered to the contractor, and alleged to be material furnished, within the meaning of the condition of the bond, were consumed, wholly and exclusively, in and about the construction of the highway. In Overman v. Casualty Co., supra, the surety was held liable to plaintiff for hay, grain, and foodstuffs furnished by plaintiff to the contractor, and consumed by the horses and mules employed by him in performing his contract; for oil and grease furnished by plaintiff to the contractor and used and consumed.in the construction of the highway; and, also, for groceries and provisions furnished by plaintiff to the contractor and used and consumed by his employees while engaged in the work of constructing the highway; all of these articles were held to be materials furnished in and about the construction of the highway, because the jury found from sufficient evidence that they were necessaries, and because the jury also found from such evidence that they were furnished for and consumed in the performance of the contract. It was held that defendant in that case was not liable as surety on the bond for candies, cigars, cigarettes, tobacco, ginger-ale and soft drinks, fur *112 nished by plaintiff to tbe contractor, because, upon tbe evidence, in tbat case,'tbe jury found tbat they were not necessary for tbe performance of tbe contract. However, in Gravel Co. v. Casualty Co., 191 N. C., 313, it is beld tbat where plaintiff, under a valid contract, furnished to a contractor material reasonably fit and suitable for tbe performance of bis contract, 'and such material was necessary for tbat purpose, tbe fact tbat tbe contractor did not use said material for tbe purpose for wbicb it was furnished, did not relieve tbe surety upon tbe bond containing tbe same condition as tbe bond in tbis case, from liability for tbe payment of tbe contract price for tbe material. Tbe rule would seem to be tbat where material, reasonably fit and ordinarily required for tbe performance of tbe contract, is sold and delivered to tbe contractor in good faitb, to be used and consumed in tbe work wbicb be bas contracted to perform, tbe surety on'the contractor’s bond is liable for tbe contract price of tbe material, where tbe bond contains a provision substantially identical with tbat contained in tbe bond in tbis case, notwithstanding tbat tbe contractor does not use or consume tbe material, wholly and exclusively, in tbe performance of bis contract. Tbe furnisher of tbe material is not required to show tbat tbe contractor actually used it, in tbe performance of bis contract, in order to establish liability of tbe surety on tbe contractor’s bond, for tbe payment of tbe sum due by tbe contractor for tbe material. In tbe instant case the evidence does not show or tend to show tbat it was necessary for tbe contractor to erect and operate a commissary and to supply same with groceries in order to secure laborers for tbe work wbicb be bad contracted to do, or to retain them in bis service. Tbe testimony of B. D. Wilson, president and general manager of plaintiff, tends to show only tbat groceries and other merchandise sold by plaintiff to defendant, J. B. Ross, Jr., and constituting a part of tbe stock of goods kept by him in bis commissary, for sale to bis employees and others, were sold to and consumed by some of tbe laborers engaged in work on tbe highway. Tbe testimony of J. B. Ross, Jr., who testified as a witness for plaintiff, tends to show tbat be was engaged in tbe performance of bis contract with tbe State Highway Commission from June, 1923, to August, 1924 — in all about fourteen months; tbat during tbis time be maintained a commissary or store for only eight or nine months; tbat tbis commissary was located about midway of tbe project, wbicb was approximately seven miles in length; tbat there was a store, at each end of tbe project, wbicb was accessible to bis employees; tbat these stores carried in stock about tbe same class of merchandise tbat be kept in bis commissary and tbat bis employees, while at work on tbe project, bought goods at these stores as well as at bis commissary. *113 Tbe commissary was established and maintained for tbe convenience of all concerned; goods were sold from tbe commissary, not only to employees of defendant Ross, but also to others, who wished to buy there. This witness testified also that during the progress of the work on the highway, he maintained a boarding house or mess-hall for such of his employees as desired to get their meals there. He used some of the groceries and provisions purchased by him from plaintiff in this boarding house or mess-hall. He did not board all of his employees — some boarded with him, and some elsewhere. He testified as follows: “Any of those men who wanted to buy goods there, went and bought them there; they paid cash, if they had cash to pay, and we charged some of them for goods they bought there. As far as the mess-hall was concerned, some of the men boarded there and some did not. Some would buy their supplies at the commissary and carry them to their homes or wherever they stayed and use them there.” The facts alleged in the complaint are sufficient to constitute a cause of action upon which plaintiff was entitled to recover of defendant, National Surety Company, in this action; the evidence, however, is not sufficient to sustain these allegations. There was no evidence from which the jury could find that the groceries and merchandise sold to defendant Ross, by plaintiff, were material furnished in and about the construction of the highway, for which defendant, National Surety Company, were liable under the terms of the bond. There was error in refusing to allow the motion of defendant, National Surety Company, at the close of all the evidence, for judgment as of nonsuit. The action against this defendant should have been dismissed. The judgment rendered upon the verdict that plaintiff recover of defendant, National Surety Company, the sum of $2,500, is set aside and the action as against this defendant is dismissed. Reversed.