Hunter Machinery Co. v. Southern Surety Co.

The following opinion was filed April 5, 1927: CROWNHART, J. Sec. 23, ch. 82, Smith-Hurd Revised Statutes of Illinois for 1923, reads as follows: “Any person who shall furnish material,’ apparatus, fixtures, machinery, or labor to any contractor . . . for public improvement ... in this state, shall have a lien on the money, bonds or warrants due or to become due such contractor” for such improvement. The bond was given pursuant to sub. 6, sec. 26, ch. 121, Hurd’s Revised Statutes of Illinois for 1921, which reads as follows: “Each contractor, before entering into a contract for such construction or improvement, shall execute a bond in the form prescribed by the commission, in the penal sum of not less than one third of the amount of the contract, with sufficient sureties to be approved by the commission, conditioned that he will perform the work in accordance with the . . . plans and specifications, and that he will commence and complete the work within the time prescribed by the contract. Such bond shall also provide against any direct or indirect damages that may be suffered or claimed on account of such construction or improvement during the time thereof, and until the highway is accepted: Provided, that one third of the total amount of such bond shall also be conditioned upon the payment by the contractors of all sums of money due for any labor, material, apparatus, fixtures, or machinery furnished to such contractor for the purpose of such construction or improvement. One third of the total amount of such bond shall inure to the benefit of any person to whom any money may be due for any such labor, material, apparatus, fixtures or machinery so furnished, and suit may be maintained on such bond by any such person for the recovery of any such money.” [222] The respondent sold the machinery in question to the defendant contractors on a conditional sales contract for the purpose of being used by the contractors in the performance of their contract, and it was so used. The contractors performed their contract, but became insolvent and left the machinery at various points along the project where it had been used. They failed to pay for the machinery, and the respondent, with the contractors’ consent, repossessed the machinery and removed it to Milwaukee, where it was reconditioned and most of it sold at the highest market value. One piece of machinery was still being held by the respondent at the time of the trial. The trial court found the'depreciated value of the machinery resulting from its use on the highway project, and gave the respondent judgment for such depreciated value. The appellant assigned as errors: The finding of the court that the respondent extended credit to the contractors based upon the bond in question; that the court erred in finding that the depreciated value of the machinery on the project was $3,516.40; and that the court erred in its .conclusion of law that the appellant Surety Company was liable upon its bond to the extent of such depreciation. It is the contention of the appellant that this action is based upon the lien laws of Illinois, and it seeks to limit recovery based on its interpretation thereof. On the other hand, the respondent contends that the bond was based upon a valid consideration and in compliance with the statutes of Illinois, and that the liability depends upon the terms of the bond. There is no doubt but that the bond can be enforced according to its terms, and that if the bond is broader than the terms of the lien statutes recovery may be had thereon, even though recovery could not be had under the lien statutes. Building Cont. L. M. L. Ins. Co. v. Southern S. Co. 185 Wis. 83, 200 N. W. 770; Southern S. Co. v. Metropolitan S. Comm. 187 Wis. 206, 201 N. W. 980, 204 N. W. [223] 476; Fidelity & D. Co. v. Milwaukee-Western F. Co. 191 Wis. 499, 210 N. W. 713; and cases cited in the foregoing. Here the bond provides that the contractors shall “pay all sums of money due for labor, material, apparatus, fixtures or machinery furnished to such contractor for. the purpose of such construction or improvement.” The findings of fact based upon undisputed evidence show that the machinery in question wa.s furnished to the contractors for the purpose of the construction and improvement of the highway project. “Such contracts are to be interpreted as are other contracts, with a view to ascertaining and giving effect to the true meaning and intention of the parties.” Joint School Dist. v. Bailey-Marsh Co. 181 Wis. 202, 194 N. W. 171. The bond here includes the machinery used by the contractors on the job, and the intention of the parties thereto cannot be in doubt. The contractors were about to construct a highway, which job required the use of the machinery purchased by them of the respondent for that purpose. The bond in express terms provided for the payment of such machinery. The appellant cannot complain that the respondent did not bring its action for the full price of the machinery. The respondent sought to salvage the machinery and save whatever value it had. It first recaptured the machinery and offered it for sale at public auction. There were no bidders except the respondent. It then reconditioned the machinery and sold it at the highest market value, and gave the contractors the full benefit of the value realized. There is no question of fraud or oppression. Everything was done for the best interests of all the parties to the contract. The judgment is both legal and equitable. The lower court applied the principles frequently approved by this court in the case of li'enable materials furnished in construction, whereby the salvaged property was credited against the value of the property furnished in the first instance. Barker & Stewart [224] L. Co. v. Marathon P. M. Co. 146 Wis. 12, 130 N. W. 866; Moritz v. Sands L. Co. 158 Wis. 49, 146 N. W. 1120; Webb v. Freng, 181 Wis. 39, 194 N. W. 155; Southern S. Co. v. Hotchkiss, 187 Wis. 227, 201 N. W. 986. Whether or not the judgment might be sustained under the lien laws of Illinois is not decided. By the Court. — The judgment of the circuit court is affirmed, Eschw'eiler, ]., dissents. A motion for a rehearing was denied, with $25 costs, on June 20, 1927.