Russellville Water & Light Co. v. Sauerman

Wood, J., (after stating the facts). In the cases of Russellville Water & Light Company v. Sauerman & Ball, D. C. Carpenter, J. M. Ball and T. C. Cole, numbered respectively 2617, 2619 and 2620, the appellees ask the court to affirm the judgments .for the reason that the contract, which is material to the determination of the issues involved, and which was in evidence below, is nowhere brought into this record. There is an agreement of record here by the attorneys representing the respective parties in the above cases that the transcripts now on file here in each of the causes may be used as a part of the transcript in the other causes; that the causes may be submitted the same as if the matter contained in each of them were contained in’ all of the others. By an examination of the record in one of the canses we find that the answers allege the existence of a contract between the company and Wilson, and that the reply of one of the plaintiffs to the answer admitted the contract between the company and Wilson, and the reply to the answer states as follows: “That the defendants by their contract with said Fred Wilson kept and agreed to withhold and withheld 15 per cent of all funds due said contractor for the purpose of paying any indebtedness in the construction and erection of the improvements in controversy; that said defendants after the bankruptcy of said Fred Wilson appropriated said 15 per cent so held back by them to their own use and interest, when in equity and good conscience the same should have been applied to the payment of plaintiff’s claim.” The appellees, in their briefs, acknowledge that the contract was adduced in evidence. Since the appellees admitted the existence of the contract, and show in their briefs that it was considered by the lower court, we are of the opinion that the causes should not be affirmed because of the omission from the transcript of the contract upon which appellant relies to sustain its contention. Counsel, in their brief, in presenting this motiori for affirmance, state that “if the court should be inclined to have this contract considered here,” we respectfully ask permission to file as a part of our brief and argument the brief and argument of Hon. U. L. Meade, filed in the case of Russellville Water & Light Company v. H D. Benefield et al. In that case the contract is fully set out, and copied by Mr. Meade in his brief. This statement of the attorneys, we are of the opinion, supplies the omission of the appellant to set forth the contract in the record and in its abstract, and sufficiently brings to the attention of the court the contract that was in evidence, and upon which the court, in part, based its decree. ! The only remaining question therefore is whether or not under the terms of tbis contract as shown in the Benefield case the appellees were entitled to recover; . : The contract, after providing for the erection of the reservoir and dam and specifying the manner in which same should be completed and the time for the completion of the same, contains the following: . “Third. The company shall pay to the said contractor for the construction and completion of the said dam and reservoir in accordance with said plans and specifications and this agreement to the satisfaction of the company, the sum of thirty-four thousand seven hundred dollars in lawful money, which said sum shall include the cost of all labor, machinery, freight thereon, installation thereof and all materials and other things used in and about the construction and completion of the said dam and reservoir, as well as other items of cost which may be incurred by the said contractor or those working for or under him in the erection and completion of said dam and reservoir under this contract. Said sum of money shall be paid to the contractor semimonthly as the .construction of said dam and reservoir shall progress, 85 per cent of the actual value of the cost of transportation and the installation of all machinery and appliances placed on said premises, and all labor performed during the erection, and completion of said dam and reservoir during the period then ending, shall be paid to the contractor, which value is to be determined and ascertained by the engineer then in charge of the said work, as herein provided, and the remaining 15 per cent shall be retained by the said company and not paid to the contractor until ten days after the completion of the said work and the possession thereof delivered to the company, free of all liens for labor or materials or purchase money or otherwise. It is understood and agreed in this connection that the contractor will use and supply all moneys so advanced to him under this contract at first, to the satisfaction and payment of all labor, materials and other liens used in and about the construction of the said dam and reservoir, and shall not diyert or use any of the same for any other purpose until all amounts owing, by. the contractor for such labor, materials and. other things are fully paid off and discharged, and such contractor shall not have the right.to demand any of the said semi-monthly payments until he has shown to the satisfaction of the engineer then in charge, that the preceding semi-monthly payments have been disbursed as herein provided.” It is contended by the appellees that they have an equity in the 15 per cent retained by the company under the contract until the completion of the work, but we are of the opinion that this provision of the contract was made expressly for the benefit of the company, and not for the benefit of laborers and material men. The contract provides that the dam and reservoir should be turned over to the appellant “free of all liens for labor or materials or purchase money or otherwise,” and it provides that all moneys advanced to the contractor shall be used, first, for the payment of all labor, material and other liens, and that the contractor shall not have the right to demand the semi-monthly payments until he has shown to the satisfaction of the engineer in charge that the money previously advanced had been used to pay off the claims of laborers and material men. All this was to be done, under the contract, before the 15 per cent was due and payable to the contractor. Taking all of the provisions together, they clearly show that the 15 per cent to be retained by the company was for its protection against any lien for labor or materials. The provisions of the contract under consideration are similar to the provisions in the contract and bond under consideration in the cases of Eureka Springs Stone Co. v. First Christian Church, 86 Ark. 212, and Morris v. Nowlin Lumber Co., 100 Ark. 253. In those cases, construing similar provisions, we held that the provisions of the bond were for the benefit of the owner of the buildings to be erected, and not for the benefit of laborers and material men. There was no privity of contract between the appellant and the appellees. The contract was made with Wilson, and the reservation of part of the contract price due him upon the completion of the dam and reservoir and the delivery of possession thereof to the appellant can not he construed as for the benefit of the appellees in the absence of more specific language to that effect. See Pine Bluff Lodge of Elks v. Sanders, 86 Ark. 292-299. The appellees rely upon certain decisions of the Circuit Court of Appeals to support their contention, towit: Anniston Pipe & Foundry Co. v. National Security Co., 92 Fed. 549, 34 C. C. A. Rep. 526; United States, etc., v. Rundle et al., 100 Fed. 400, 40 C. C. A. Rep. 450; United States v. American Surety Co., etc., 135 Fed. 78, 67 C. C. A. Rep. 552, and Chaffee v. United States Fidelity & Guaranty Co., 128 Fed. 918, 63 C. C. A. Rep. 644. These decisions are grounded on an act of Congress for the “protection of persons furnishing materials and labor for the construction of public works.” See Yol. 6, Fed. Stat. Ann., p. 125. The act, among other things, provides for a bond to be given by the contractor with good and sufficient sureties “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, * * * upon which (contract and bond) the said person or persons supplying such labor and materials shall have a right of action, and shall be authorized to bring suit in the name of the United States for his or their benefit against said contractor and sureties,” etc. It is clear from the provisions of this statute that the contracts and bonds under them are, in part, expressly for the benefit of laborers and material men, since they are given a right of action thereon. These authorities are not applicable to the contract under consideration. The undisputed testimony shovrs that at the time Wilson abandoned his contract he was indebted to appellant in a sum in excess of the amount of the 15 per cent' reserved. After Wilson left, appellant had to expend a large stun in excess of the 15 per cent to finish the dam and reservoir. It follows that the decree was erroneous. It is therefore reversed and the causes are dismissed.