Arcadia Lumber Co. v. Austin ( 1930 )

DREW, J.

Plaintiff sued the sureties on a contractor’s bond for the price of materials alleged to have been furnished by plaintiff to the contractor and used in the building specified in the contract.

He alleges that on January 31, 1928, S. B. Sutton entered into a contract with J. R. Jordan to erect a certain building in the town of Arcadia, La., for the price of $5,000, and furnished bond in the sum of $1,500 conditioned for the payment of all claims or liens, including charges of any and all material used or furnished in the construction of the said building, which bond was signed by the' defendants herein, as sureties. The contract and bond were duly recorded in the mortgage records of Bienville parish, La. That on July 21, 1928, J. R. Jordan, owner of the building, filed notice of acceptance of the work, which was duly recorded in the mortgage records of Bienville parish.

Plaintiff further alleges that it gave notice to defendants, as required by Act No. 225 of 1918 and Act No. 298 of 1926, and prays for judgment in solido against the defendants for the amount of its claim, with legal interest from April 24, 1928, until paid, and for ten per cent additional as attorney’s fees.

Plaintiff did not file and record a lien against the building, and this suit was filed on March 23, 1929.

The contractor is not made a party to the suit, it being a suit against the sureties on the contractor’s bond.

Defendants filed an exception of misjoinder or nonjoinder and an exception of no cause of action. The exception of misjoinder or nonjoinder was overruled, and the exception of no cause of action was referred to the merits and overruled in the decision on the merits.

Defendants answered denying the indebtedness, and alleging certain credits that were due the contractor, S. B. Sutton, by the plaintiff; and that the failure to sue the contractor released him from the debt and thereby released the sureties.

The lower court rendered judgment on the merits for the amount prayed for, together with" interest and attorney’s fees, and from that judgment the defendants have appealed.

The exception of misjoinder is based on the fact that the contractor was not made a party to the suit, he being the original obligor.

The suit is brought under the provisions of Act No. 298 of 1926. Section 3 of that act declares that the contractor and his surety shall be solidarily liable for all labor and material used in the work, and that, notwithstanding the erasure of the inscription of the contract, the surety’s liability shall not be affected and he shall be bound to the same extent as the contractor. Being solidarily liable, the creditor or furnisher of material could proceed against either or both at its will. Rev. Civ. Code, arts. 2091, 2094 and 2095.

The exception of misjoinder or nonjoinder was properly overruled.

The exception of no cause of action is leveled at the fact that the bond given and sued on is not a bond in compliance with the act of the Legislature (Act No. 298 of 1926), in that the act requires a bond to be given equal to the amount of the contract where the contract price is not more than $10,000, and in the instant case the contract price was $5,500 and the bond for only $1,500.

The bond is not in the amount required by the act; however, it is a valid bond for the amount of $1,500, and there is no good reason for releasing the sureties entirely because it is for a less amount than required by law. If no bond had been given at all, then the right of action would have been against the owner of the building, and the lien would have to be recorded within the statutory time of thirty days after acceptance. If the amount of claims for material, labor, etc., exceeded the amount of the bond given, the owner would likewise be liable for failure to require the necessary bond. The sureties could not be held liable for an amount greater than the amount of the bond, but are liable to the amount of the. bond.

No harm could befall the sureties by reason of the bond being for a less amount than the owner should have required, in order to protect himself from all harm by failure of the contractor to pay for his material and labor. The creditors of the contractor would have a right to complain of the insufficiency of the bond, but certainly not the sureties on the bond.

Defendants further complain that the plaintiff did not file and have recorded its lien within thfe time required 'by the act.

Recordation of a lien is not necessary in an action against the contractor or his sureties on his bond for material furnished. Section 14 of Act No. 298 of 1926 contains the declaration that nothing in the act “shall be so construed as to deprive any claimant of his right of action against the surety signing any bond furnished in connection with any building contract or subcontract, or against the principal obligor, thereunder, which right of action against such obligor and said surety shall accrue at any time after maturity of the claim of the said claimant.” The section also provides that any action against the surety must be brought within a year from the registry of the owner’s acceptance or of ■ notice of the contractor’s default

This suit was brought after maturity of ■ the claim and within the year after the notice of acceptance was filed for registry by the owner, and the exception of no cause of action was properly overruled. Dixie Bldg. Material Co. v. Mass. Bondiug & Ins. Co., 167 La. 399, 119 So. 405.