Road Supply & Metal Co. v. Kansas Casualty & Surety Co.

The opinion of the court was delivered by Mason, J.: The board of commissioners of Sedgwick county entered into a contract with Frank Bechtelheimer for the construction of a road. The mechanic’s-lien act provides that in such case the contractor shall give a bond running to the state, to be filed with the clerk of the'district court, conditioned for the payment of all indebtedness incurred for labor and material furnished. (R. S. GO-1413, 60-1414.) The contractor gave an undertaking, running to [300] the county (which was not filed with the clerk of the court), signed by a bonding company, the condition of which was that “the above-named principal shall faithfully perform said contract, in every respect, and fully compensate such county for any and all loss or damage by reason of any default, failure or miscarriage in the performance thereof and shall pay all indebtedness incurred for labor or material furnished in the construction.” The Road Supply and Metal Company brought this action on the bond for material furnished the contractor, and recovered a judgment, from which the bonding company and its receiver appeal. The statute requires that on the letting of a road contract the contractor shall give a bond to the county for its faithful performance, “payable to the county upon failure to comply with the terms of his or their contract.” (R. S. 68-521.) The appellants contend that the bond is to be treated as given under this statute, merely for faithful performance, and for the benefit of the county only. The fact that the statute requires a bond to be given for faithful performance does not impair the binding force of other terms added by agreement of the parties, even when they are for the benefit of third persons. (Note, 18 A. L. R. 1227.) We construe the provision relating to the payment of indebtedness incurred for labor or material furnished in the construction of the road as intended for the benefit of laborers and materialmen. As so construed it inures to their benefit, and the present action is maintainable by the plaintiff as one of the beneficiaries. This accords with former decisions of this court, and with many cases in other jurisdictions, constituting the weight of authority, although there are decisions to the contrary. (Manufacturing Co. v. Deposit Co., 100 Kan. 28, 163 Pac. 1076, and authorities there cited, especially note, 27 L. R. A., n. s., 573, 591. See, also, 21 R. C. L. 985; 27 Cyc. 314; 9 C. J. 87.) The obvious purpose of the bond is to protect the laborers and materialmen, the county suffering no financial loss from their nonpayment. On the other hand, the county, a governmental body, has a proper interest in seeing that those contributing work and material to its public improvements shall not be cheated out of their pay. The bonding company is an insurer rather than a surety in the ordinary sense. The result is the same whether the instrument on which the action is brought is regarded as a mere common-law bond, as one under the road statute with additions, or as one under the mechanic’s-lien law, somewhat irregularly prepared and handled. [301] There is nothing in Brick, & Tile Co. v. Fidelity & Guaranty Co., 108 Kan. 21, 194 Pac. 316, at all inconsistent with this view. The bond in that case was merely one of indemnity, to keep the contractor, a city, harmless against claims for work and material. There no obligation was assumed to pay the indebtedness incurred on those accounts. The appellants further contend that if the bond is treated as one under the mechanic’s-lien statute certain charges allowed for freight should have been excluded, being for neither labor nor material. These charges,, however, are explained as mere items entering into the price changed for material. The judgment is affirmed.