Jenkins Hardware Co. v. Globe Indemnity Co.

BeogdeN, J. What are materials within the purview of a road contractor’s bond of the type disclosed by the present record? This Court has heretofore determined that certain specified articles constitute material within the purview of a road contract. These include lumber used for construction of a rock crusher, dump forms, etc., groceries for workmen where a commissary is necessary, feed for teams, blasting powder and drills “used up in scaffolds and forms for concrete construction,” gasoline and lubricating oil. Aderholt v. Condon, 189 N. C., 748, 128 S. E., 337; Plyler v. Elliott, 191 N. C., 54, 131 S. E., 306; Overman v. Casualty Co., 193 N. C., 86, 136 S. E., 250; Grocery Co. v. Ross, 194 N. C., 109, 138 S. E., 537. Moreover, it has been held *188 that the rental of a ditching machine, wages of State convicts, electric power to operate a rock crusher, rentals of steam shovel and boiler for operating drills are deemed to be labor for such construction. Sheflow v. Pierce, 176 N. C., 91, 97 S. E., 167; State Prison v. Bonding Co., 192 N. C., 391, 135 S. E., 125; Wiseman v. Lacy, 193 N. C., 751, 138 S. E., 121. This Court has also definitely declared that plant facilities, instru-mentalities or those articles usually classified as equipment, tools and implements of a contractor are neither labor nor material. A comprehensive definition of material is found in Fulp v. Power Co., 157 N. C., 154, 72 S. E., 869. The court held that material “is something that is consumed in the use, as coal, for instance, or labor performed, . . . or is such material as goes into and makes part of the realty or the product in such a way as to be indistinguishable from the mass, as timber put into a building or cotton that is manufactured, etc.; but where the subject-matter for which the debt is incurred keeps its identity, as an engine, even though built into the wall, this section does not apply, because the party had his remedy by. retaining title or taking a mortgage on the property sold.” Obviously the foregoing refers to the lien statute, but no sound reason is apparent which would give a different definition to “materials” when used in a lien statute or when used in a contract relating to public improvement. One of the latest utterances upon the subject comes from the Court of West Virginia in the case of Rhodes v. Riley, 169 S. E., 525: The Court said: “It is generally held that the surety of a contractor on a public work is not liable for the price of anything in the contractor’s regular equipment. A contractor is expected to have such equipment as would ordinarily be used in the performance of his contract. The law was not intended to permit a contractor to go into a bonded job with a run-down outfit and have it rebuilt at the expense of his sureties. . . . The regular equipment is furnished the contractor upon his own credit presumably, and not upon the implied credit of the public.” This Court in Cornelius v. Lampton, 189 N. C., 714, 128 S. E., 334, declared: “We would say that the rock crusher and cable cars were instrumentalities and not included in the contract.” The Supreme Court of Iowa in Surety Co. v. Des Moines, 131 N. W., 870, has declared that lanterns, sledges, chisels, axes, bolts, washers, etc., are included in the working equipment of a contractor, and that the purchase of such articles imposes no liability upon the surety. The Missouri Court construed the question in State, Ex Rel. Hernleben v. Detroit Fidelity & Surety Co., 21 S. W. (2d), 494, and declared that “plows, graders and machinery generally used in the performance of the contract remained the property of the owner whose duty it is to keep them in *189 repair and in workable condition.” And in Kansas City v. Yeomans, 112 S. E., 225, it was beld tbat rope, picks, pickbandles, chains, buckets, spades, shovels, track spikes, rubber boots, hatchets, hose coupling, and wire rope are such as constitute a part of the contractor’s plant or his tools and implements with which to do the work. See, also, Union Indemnity Co. v. State, 118 Southern, 148; Gary Hay & Grain Co. v. Fidelity Deposit Co., 255 Pac., 722; Fidelity & Deposit Co. of Md. v. Bailey-Spencer Hardware Co., 133 S. E., 799. The boundary line between articles deemed to be materials and articles deemed to constitute the tools, implements, instrumentalities and equipment of a contractor, lies deep in fog. In some states statutes are more comprehensive and inclusive than in others. Contracts and bonds in many cases contain variable wording. Consequently there is no chopped line in this field of decisions. While in a large measure the solution of cases of this type depends upon given facts and circumstances, there are certain definite principles which aid in determining whether given articles are to be classified as materials or tools, implements or - equipment. The decisions in this State seem to proceed upon the theory that material consists of such articles as (1) are necessary and indispensable to the performance of the contract; (2) which the parties must reasonably contemplate will be incorporated into the work or be consumed in the performance of the contract; and (3) which lose their identity in the finished product, so as to be indistinguishable from the mass. Applying the principle deduced from our decisions, it is apparent that some of the articles involved in the present suit are not materials. There was evidence that pipe, shovels, picks, wheelbarrows, lanterns, hatchets, shovels, padlocks, axes, mattocks, etc., were constituent parts of the equipment of the contractor, and hence to be classified as tools and implements. There was also testimony that many of the articles mentioned, were not used up in the work or consumed in the performance of the contract, but were actually moved away and perhaps sold to third parties when the project was completed. In other words, if given articles are of such nature or type that they must necessarily be consumed in prosecuting the work and thus lose their identity in the finished product, then such articles must be classified as materials, otherwise as a part of the instrumentalities, tools, implements and equipment of the contractor. Therefore, the trial judge was in error in holding as a matter of law that all of the items described in the pleadings and evidence constituted materials for which the surety would be -liable. It is the function of the jury upon conflicting evidence to determine whether such articles are materials or tools, implements or equipment. Of course, upon admitted facts, the question is one of law. *190 The articles involved in tbe operation of the commissary or boarding bouse for employees stand upon a somewhat different footing-. Manifestly, if a contractor, as a matter of necessity, was compelled to furnish board and lodging for his workmen as a part of their compensation, deducting the price of such board and lodging from wages paid, 'then the principle announced in Brogan v. National Surety Co., 246 U. S., p. 257, 62 L. Ed., 703, would apply, and the surety would be liable therefor. But there is no evidence in this case that board and lodging were necessary and indispensable, or a part of the contract of hiring, or based upon any contract or agreement that the contractor should deduct charges therefor from the wages of the worker. This principle was fully discussed and applied in Grocery Co. v. Ross, 194 N. C., 109. Consequently, all items for dishes, roofing, beds, bedding, mattresses, etc., involved in the operation of the commissary impose no liability upon the surety, upon the facts disclosed at the trial. Reversed.