United States of America ex rel. McAllister v. Fidelity & Deposit Co.

Woodward, J. : In the year 1899 the defendant Churchyard was engaged in several building operations in the vicinity of Newport, R. I., among them being three separate and distinct government contracts. One of these was with the War Department for the construction of a hospital at Fort Adams; the second was also with the War Department, and was for the construction of a fort at Dutch island, while a third was with the Navy Department for a marine barracks at Coaster’s Harbor island, and the defendant, the Fidelity and Deposit Company of Maryland, became the surety for Churchyard upon the latter contract, subject to the provisions of an act of Congress passed August 13, 1894 (28 U. S. Stat. at Large, 278, chap. 280, § 1), which provides that the surety shall assume an obligation “ that such contractor or contractors shall promptly make payments to all persons supplying him or them labor and materials • in the prosecution of the work provided for in such contract.” The real plaintiffs in this action, James McAllister, James P. McAllister, William McAllister and Daniel McAllister, were and are copartners, doing business as such in the city of New Fork, under the firm name of McAllister Bros., and on or about. October fourth they made a proposition to the defendant Churchyard to furnish him a steam lighter, the Columbia, with a crew of six men all told, and coal, water and necessary supplies to run from Newport, Fall River and Providence, for the sum of $1,800 per month. If the boat was used forty-five days, it was proposed to charge, at the rate of $55 per day, and if for sixty days, then at the rate of $50 per day, This proposition was accepted in behalf of Churchyard, and on the [477] sixth of October the boat was put in commission and was used by Churchyard in transporting lumber and materials to the three government jobs for a period of thirty-seven days, at a total agreed ■expense of $2,220, on which he has paid $1,750, leaving a balance still due and owing of $470, for which the plaintiffs seeks to hold the defendant Fidelity and Deposit Company in common with Churchyard liable. Upon the trial the learned justice, presiding permitted the jury to find that the Fidelity and Deposit Company were liable for the indebtedness of Churchyard for the hiring of this lighter to the extent that it was used in delivering materials to the work at Coaster’s Harbor island, the- evidence tending to show that it was employed about one-half of the time for which the plaintiffs claim and jury has found for the plaintiffs. The question presented by this appeal on behalf of the Fidelity •and Deposit Company is whether its obligations as a surety upon the bond of Churchyard for the construction of marine barracks at Coaster’s Harbor island extend to the general contract between the plaintiffs and Churchyard for the use of the former’s lighter in connection with the transportation of lumber and materials to the three works which Churchyard.had under- construction at the time? Does the statute, and the contract made' in pursuance of the provisions of the law, contemplate such a liability ? The contract of a surety is to be strictly limited to the provisions of the contract, and we see no reason why this rule should be enlarged in the case of a surety required by the statute, which in this case guarantees that the contractor or contractors “ shall promptly make payments to all persons supplying him or them labor and materials in the prosecution of the work provided for in such contract.” The plaintiffs in furnishing a boat to transport materials to the works at Coaster’s Harbor island have not furnished any material used in the prosecution of the work provided for in the contract, any more than a common carrier might be said to furnish materials by transporting them to the point where they were to be used.. Churchyard might have hired the plaintiffs to transport his materials as freight, and it would hardly have been suggested that under the statute the plaintiffs would have had a lien for materials furnished in performing the contract, and we are unable to discover any reason why they have a stronger claim because Churchyard choose to hire the means [478] of transportation, and to assume, the responsibility of operating the craft. The full purpose of the statute has been served, it seems to us, when the surety has complied with its plain provisions, as they would be read and understood by the average man, and this would not reach beyond an obligation to see to it that the materials used in the structure under contract had been paid for; that the claims of the materialmen had been liquidated, and the wages of laborers actually employed upon the work, in fitting materials to be used in the structure, or performing labor in and about the premises, had been paid. (See Daley v. Legate, 169 Mass. 257, 260, and authorities there cited.) In other words, the contract of the surety is that the contractor will not only build the structure, but that he will pay for the labor and materials used, which would constitute under statutes in most of the States, if unpaid, a lien upon the premises, and his obligation does not extend beyond the obligation which the contractor assumes in respect to these matters. The mode in which one party to a bargain shall enable himself to do what he has agreed to do is no concern of the other party, and is no part of the contract (Bacon v. Parker, 137 Mass. 309, 311; Pratt v. American Bell Telephone Co., 141 id. 225, 229), with the modification above' suggested, and which is provided by the statute, that the- mode shall not be such as to leave obligations.against the structure when completed. There is nothing in the record to show that there was anything to indicate to the defendant, the Fidelity and Deposit Company, that it was assuming any obligations in reference to any collateral contracts of Churchyard which were necessary to enable him to perform his contract, except such as were specially mentioned and which referred .to the labor and materials entering into the structure. Churchyard’s contract with the government was that he would “ provide, furnish and deliver, at his own risk and expense, at Coaster’s Harbor Island, Rhode Island, all the necessary materials, labor, tools and appliances for the construction and completion, in all respects, of a barracks,” etc., and his bond, on which the Fidelity and Deposit Company became surety, was conditioned that he should-^ promptly, make payments to all persons supplying him or them labor and materials in the prosecution of the work provided for in the aforesaid contract,” the.work being the. construction of the. barracks. . There is no mention in the bond of the contract :tó [479] deliver, and the, instruments specifying “ labor and materials,” under well-established rules of construction, all other matters are excluded. (Broom Leg. Max. [7th ed.] 505 ; Aultman & Taylor Co. v. Syme, 163 N. Y. 54, 57 ; Mayor v. Ray, 19 Wall. 468, 475.) It is true that the contract for the hiring of the lighter of the plaintiffs included a crew of six men, but this was incident to the contract of hiring the boat, and they did nothing toward fitting the materials to be used in the work provided by the contract.' The plaintiffs furnished labor only in the sense that a common carrier would have furnished the men to operate the train or the vessel in which the transportation was made, and the contract of the surety was to see that those who furnished labor and materials used in the work under contract were paid, and not to protect those who merely brought the materials to the point, and who were in a position to protect themselves under independent contracts. The agreement between the plaintiffs and Churchyard evidently proceeded upon the theory that Churchyard was alone responsible to them, for it provides for payment in advance of $500, with subsequent payments at periods of ten days, and it makes no mention of the particular work to be done. As a matter of fact, Churchyard used the lighter for transporting materials, machinery, etc., to each of the three government contracts, and no account was kept of the portion of time it was employed upon the Coaster’s Harbor island barracks. He used it generally in performing several contracts; the cargoes were apparently piled on indiscriminately and delivered at the various points, and it is difficult to understand how the Fidelity and Deposit Company, which had no intimation, so far as the record shows, that this contract for the use of the lighter was to be made, could be held to have contracted to guarantee payment to these plaintiffs under the statute here under review. Assuming, as we must, that the defendants knew the law, could they be deemed to have contemplated this liability, did the law contemplate it 1 We think not; the scheme of the statute appears to have been to give material-men and laborers a lien upon the contractor’s bondsmen in the same way that under our State statutes liens are imposed upon the premises, and we find no instance in which it has been held that this lien extended to labor performed in transportation or to the instruments used in conveying the materials to the premises. In Webster v. [480] Real Estate Improvement Co. (140 Mass. 526) the petitioner sought to establish a lien for hauling lumber and sand to the premises on which the building was constructed. One Killam was the contractor for building the structure, and the petitioner, under a contract with him, carted the lumber and sand charged in his account. The court, after discussing the conditions under which a lien might attach for labor performed upon materials actually entering into the construction of the building, although done at a different place, say: “ We think this labor of the petitioner does not come within the terms of the statute; that it was not connected with the building of the structure, and that it was too remote. to enable him to establish a mechanic’s lien therefor. It is difficult to distinguish the claim of -the petitioner for a lien from that of the railroad for transporting the lumber, or from that of the teamster who carted it to the railroad, or from .the claim of the woodcutter who felled the trees, provided they stood in other respects towards the respondent as does this petitioner.” The reasoning of this case seems to apply to the facts presented upon the record now before us, and we are cited to no controlling authority holding to the contrary. The plaintiffs have neither furnished materials nor labor entering into the subject of the contract between Churchyard and the United States, and the contract of the surety was merely that the wages of laborers and the claims of materialmen, for labor and materials entering into the construction of the barracks at Coaster’s Harbor island, should be paid. They did not undertake to insure the payment for transportation of materials, either by a common' carrier or through the medium of a lighter hired by the contractor to carry on his general business as a contractor, and it was error, calling for a reversal of the judgment, to submit to the jury the question of how much of the time of the lighter was used in delivering materials at Coaster’s Harbor island. The defendant Fidelity and Deposit Company owed no obligation to the plaintiffs under the terms of the bond sued upon, and there was, therefore, no question for the jury to determine. The judgment and order appealed from should be reversed. Hirschberg, Jerks and Hooker, JJ., concurred. Judgment and order reversed and new trial granted, costs to abide the event.