Pine Bluff Lodge of Elks No. 149 v. Sanders

Hart, J., (after stating the facts.) Appellant contends that the Pine Bluff Brick Company failed to file a statement of its account with the clerk in due time as required by law, and for this reason failed to preserve its lien. It bases its contention on the alleged fact that the last item on the account and the one that brings the account within the statutory period was furnished directly to appellant after the contractor had abandoned the work, and after it had assumed charge of the construction of the building. The item referred to was for 7,000 bricks, and its date is October 24, 1902. The abstract of tickets exhibited at the trial in the court below shows that 7,000 bricks were furnished by the Pine Bluff Brick Company to be used in the construction of the building, and that the date of delivery was October .24, 1902. The undisputed testimony shows that the contractor had charge of the work on that date, and that he did not abandon it until the 2d day of November following, when he turned it over to appellant for completion. The account of the Brick Company, duly verified, was filed in the clerk’s office on the 20th day of December, 1902, less than sixty days after the last item of the account was furnished. Hence we are of the opinion that the finding of the chancellor in that regard is correct, and should be sustained. 2. It is urged by appellant that, because Sanders and Campbell were sureties on a bond given by Jones, the principal contractor to his surety, the United States Fidelity & Guaranty-Company, to indemnify it from loss by reason of having become surety on his contractor’s bond, they are estopped to assert a lien for materials furnished for the construction of the building in question. The Guaranty Company became the surety of Jones, the principal contractor, to save appellant harmless from any loss it might sustain by reason of a breach of their contract by him. Before these lien claimants had filed their suits, appellant had made a settlement with 'the Guaranty Company, by which it had been released from further liability on the bond. There was no privity of contract bétween appellant and Sanders and Campbell. The latter did not execute a bond to secure the payment of whatever debt the Guaranty Company or its principal on the bond might owe to appellant, but executed a bond merely to indemnify the Guaranty Company against liability by reason of it having become the surety on Jones’s bond as contractor. In such a case no equity could arise in favor of appellant, except through the insolvency of the' Guaranty Company, and this contingency could never affect appellant, for the reason that it had already settled with it and could thereafter have no claim against it or its indemnitors. Dyer v. Jacoway, 76 Ark. 176. For this reason no estoppel could arise, and the finding of the chancellor in that regard was correct, and should be sustained. 3. Counsel for appellants say that Sanders is estopped now from claiming a lien for materials furnished because he was treasurer of the building committee of appellant. All the members of the - building committee served as such without pay,- and the duty of the-treasurer was to pay the drafts or checks drawn by the chairman and secretary of the committee in favor of the contractor, materialmen and laborers as they were presented to him. The other members of the committee knew that Sanders was furnishing materials to be used in the construction of the building, and that he had not been paid therefor. They knew ■that the principal contractor had given bond for the faithful performance of his contract. In the case of Simonson v. Stachlewicz, 82 Wis. 339, the court held: “Statements made to the owner of a building or to his architect by subcontractors to the effect that the principal contractors were perfectly good and had always paid their bills cannot estop such subcontractors from asserting their lien on the building for materials furnished, although after such statements the owner had paid the principal contractors, if he was. not misled by the statements or induced thereby to make such payment.” The record does not disclose any facts tending to show- that the delay of Sanders in asserting his lien worked to the prejudice of appellants, or that it was misled thereby. He certainly ■did nothing to warrant a belief that he waived his lien, or that he did not expect to protect himself in due time by such remedies as the law affords. The chancellor found that appellant was not misled by his acts and conduct, and we 'are of the opinion that his finding in that regard was correct, and that Sanders is not estopped from asserting his lien by reason of having been a member of the building committee. 4. After the principal contractor made default, the appellant took up the work of the construction of the building and finished it. There were some changes in the plans, but they were not material. The building was constructed substantially according to the original plans and specifications. After the completion of the building, appellant sued Jones, the principal contractor, and obtained judgment against him for $1,403.69 as damages, on account of the money it had paid out to complete the building in excess of the contract price, and also far $4,000 liquidated damages as provided in the contract on account of the delay in the completion of the building. In consideration of $2,928.24 paid to it by the Guaranty Company, appellant released it from all liability by reason of being surety on the contractor’s bond, and accepted the said amount in full satisfaction of the judgment against the principal contractor, in so far as the Guaranty Company was concerned. The -chancellor charged appellant with the amount collected from the Guaranty Company as surety of the principal con-' tractor. This was in effect to hold that appellant took the bond for the benefit of the sub-contractors, and not as a protection to itself, and was error. Tbe bond in this case was not made for the benefit of the sub-contractors. Appellant was the sole obligee in the bond. Its condition is'as follows: “Now, therefore, the condition of the foregoing obligation is such that the sa.id principal shall well and truly indemnify and save harmless the said obligee from any pecuniary loss resulting from the breach of any of the terms, covenants, and conditions of the said •contract on the part of the said principal to be performed, then this obligation to be void.” In the case of the M. T. Jones Lumber Co. v. Villegas, (Tex.), 28 S. W. 558, the court said: “The bond given to the owner by the contractor could not possibly inure to the benefit of the materialmen. There was no privity of contract between appellant, (materialman) and the bondsmen on the contractor’s bond, and no cause of action existed in favor of appellant as to them.” The bond in the present case was not given to secure the payment of material furnished to the contractor to be used in the construction of the building, but was given to indemnify and save harmless appellant from any breach of the contract on the part of the principal contractor. It was in no wise intended to benefit or to protect the materialmen, and no right of action thereon exists in their favor. In the case of Long v. Chas. T. Abeles & Company, 77 Ark. 157, it was ’held that “where a contractor abandoned his undertaking after partially performing his work, and the owner, in completing the work as originally designed, is obliged to incur expenses in excess of the contract price, he should be allowed credit, in a settlement with the lien-holders claiming under the contractor, for such sums as he paid out.independently of the contractor’s debts; and when the aggregate of these -sums has been deducted from the contract price, the residue should be prorated among such lien-holders.” The amount to be distributed to the lien claimants will be fixed by deducting from the contract price as expressed in the contract the amount paid out by the Lodge to complete the building after the contractor had abandoned the work, and each lien-claimant is entitled to recover what he lacked, if any, of receiving his proportionate part. For the error indicated, the cause is reversed and remanded with directions to enter a decree in accordance with this opinion. Hiel, C. J., not participating.