Spokane Merchants Ass'n v. Pacific Surety Co.

Parker, J. This is an action upon a bond executed by Nick Mandic, as principal, and Pacific Surety Company, as surety, to secure performance by him of work upon state aid road No. 71, with Ilse & Elliott, who had the principal contract with the state for the construction thereof. Trial before the court without a jury resulted in findings and judgment in favor of the defendant, from which the plaintiff has appealed. In June, 1910, Ilse & Elliott entered into a contract with the state of Washington for the construction by them of state aid road No. 71. At the same time, in compliance with the provisions of Rem. & Bal. Code, § 1159 (P. C. 309 §93), they executed a bond to the state of Washington, with a surety company as surety, conditioned that they, “shall pay all laborers, mechanics, sub-contractors, and material men and all 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”. These are conditions of bonds as required by that section. Thereafter, on August 24s, 1910, Nick Mandic entered into a subcontract with Ilse & Elliott for the doing of work upon the road. Thereafter, on September 10, 1910, Nick Mandic executed to Ilse & Elliott a bond with respondent, Pacific Surety Company, as surety, in pursuance of his subcontract, conditioned in part substantially as the above quoted conditions in the bond given to the state of Washington by Ilse & Elliott, the original contractors. Thereafter Nick Mandic incurred indebtedness in the performance of his subcontract for supplies furnished him by several persons, who thereafter assigned their claims to appellant, Spokane Merchants As [491] sociation. It thereupon commenced this action to recover such indebtedness from the Pacific Surety Company upon the bond executed by it, as surety, and by Nick Mandic, as principal, to Ilse & Elliott. The trial court disposed of the case in favor of respondent, upon the theory that there was no privity of contract between it and the persons who furnished Nick Mandic with supplies for the prosecution of his subcontract. This disposition of the case is in harmony with our former decisions in Sears v. Williams, 9 Wash. 428, 37 Pac. 665, 38 Pac. 135, 39 Pac. 280, and Armour & Co. v. Western Construction Co., 36 Wash. 529, 78 Pac. 1106. It seems quite plain to us that the bond here sued upon was given only for the benefit of Ilse & Elliott. The purpose of having it conditioned in part in the language of the statute, as was the bond given by Ilse & Elliott to the state, manifestly was to secure them against debts incurred by Nick Mandic in the performance of his subcontract, since they were liable under their bond to the state for such debts incurred by Nick Mandic, as well as for debts incurred by themselves in the prosecution of their contract with the state. This is rendered plain by the following language of Rem. & Bal. Code, § 1159: “. . . any person or persons performing such services or furnishing material to any subcontractor shall have the same right under the provision of such bond as if such work, services or material was furnished to the original contractor.” Appellant’s assignors were secured, if at all, by the bond given by Use & Elliott to the state in pursuance of Rem. & Bal. Code, § 1159. The bond here sued upon was not given in pursuance of any statute. As a common law bond, it will not bear the construction that it was given to secure any one but Ilse & Elliott. The judgment is affirmed. Morris, C. J., Mount, Holcomb, and Chadwick, JJ., concur.