Alabama Marble Co. v. United States Fidelity & Guaranty Co.

Holde.N, P. J.,

delivered the opinion of the court.

This suit is by the Alabama Marble Company to. recover for certain materials used in the construction of the Lamar Life Building, which was erected by Sumner Sollitt Company, as principal contractors for the erection of the building. The United States Fidelity Company was surety on the bond of Sumner Sollitt Company, and the Lamar Life Insurance Company was the owner of the building.

The suit, according to the complainant’s bill, is for the purpose of recovering against the owner of the building and the surety company for about nine thousand dollars worth of marble material furnished by appellant, the Alabama Marble Company, that had not been paid for. The marble was not furnished, by the marble company directly to the Sumner Sollitt Company, the original contractors for the erection of the building, but it appears that the marble was furnished to one Eider, who, in turn, furnished it to 'Sumner Sollitt Company, which company paid Eider for said marble, but Eider failed to pay the appellant, marble company,-and hence this suit to recover against the principal contractor and his bond, and the owner of the building, the amount due by Eider, subcontractor of the principal contractor, Sumner Sol-litt Company, to appellant.

So, in short, we have a case that presents the question of whether or not the bond of the principal contractor to erect a private building is liable to a remote material-man, or a remote subcontractor, for materials sold to a subcontractor and used in the construction of the building. The bond of the principal contractor in the cáse at' bar contains the following language: •

“If the Sumner Sollitt Company shall well and truly perform and fulfill all and every covenant, and stipulation . . . to be performed by it, and it shall repay to the Lamar Life Insurance Company sums which it may pay to other persons on account of work and labor done, or materials furnished, which the said Sumner Sollitt Company may fail to do or perform, or if the said Sumner’Sollitt Company shall in all respects faithfully perform said contract and shall promptly make payment to all persons supplying the said Sumner Sollitt Company ■with labor and materials in the prosecution of said work provided for in said contract, and to all subcontractors and to furnishers of material on or for said building, then this obligation shall be-void.”

Chapter 128, Laws 1918 (section 3), provides as follows :

‘ ‘ That when any contractor or subcontractor entering into a formal contract with any person,''firm or corporation, for the construction of any building or work or the doing of any repairs, shall enter into a bond with such person, firm or corporation guaranteeing the faithful performance of such contract and containing such provisions and penalties as the parties thereto may insert therein, such bond shall also be subject to the additional obligations that such contractor or subcontractor shall promptly make payments to all persons furnishing labor or material under said contract; and in the event such bond does not contain any such provisions for the payment of the claims,of persons furnishing labor or material under said contract, such bond shall nevertheless inure to the benefit of such person furnishing labor or material under said contract, the same as if such stipulation had been incorporated in said bond.”

A demurrer to the bill was sustained by the lower court, and this appeal is prosecuted to settle the principles of the case.

It is urged by appellant, Alabama Marble Company, that the bond given here by the principal contractor, aided and supplemented by the provisions of the statute (section 3, chapter 128, Laws of 1918), providing that such bond shall inure to the benefit of persons furnishing labor or material under said contract, is liable for materials furnished to Rider, the subcontractor, who furnished it to Sumner Sollitt Company, the principal contractor, who used it in the construction of the building.

It is contended that the bond and the statute make the contractor liable to all persons for material and labor furnished in the construction of the building-; and several decisions of this court are cited to support that position, but we find that all the decisions relied upon by counsel for appellant have reference to the statute providing’ for a bond to secure payment for labor and material furnished upon public buildings or public work, not private buildings or private work, as in the case before us.

We think there is quite a difference between the two statutes (chapter 217, Laws of 1918, and chapter 128, Laws of 1918), and'that the bond of the contractor under chapter .217, Laws of 1918', requires that all laborers and materialmen must he paid for the labor and materials that go into the construction of the public buildings, regardless of whether they are remote materialmen, or whether they have furnished the materials directly to the principal contractor; but we do not think that the bond in this case, assisted by chapter 128, Laws of 1918, covers liability to any subcontractor or materialman beyond the first subcontractor or materialman who deals with, and furnishes materials directly to, the principal contractor.

To put it in different words, the bond here, which the law provides may be given to take the place of the old mechanic’s lien, or materialman’s lien, was intended to guarantee payment only to the contractor or material-man who deals directly with the principal contractor.

The statute uses the language that such bond shall he subject to the additional obligation that such contractor or subcontractor shall make payments to all persons furnishing labor or materials under said contract. The phraseology of the statute makes it plain, as we see it, that the bond is to protect only those who furnish labor or material to the principal contractor, because it refers expressly to “said contract” and-“said bond.” •

It is our judgment that section 3, chapter 128, Laws 1918, does not intend to protect the remote materialmen in this character of private contract. To so hold might involve the constitutionality of the act with reference to impairing the freedom of contract.

If the statute is to be construed as appellant contends, then the principal contractor and his bond, and the owner of the building, would find it very difficult ever to know whether they had paid for the materials that went into buildings, even though they had settled with the persons with whom they dealt directly, and from whom they received the materials. The statute will not bear such construction.

The record Seems to disclose that the appellant, marble company, gave notice to the owner of the building that it claimed to have furnished materials which went into the construction of the building and which were not paid for. However, it appears that at the time this notice was given, the owner, or the principal contractor, had already settled with Eider for the materials that went into the building; consequently, the notice was too late to catch any of the funds in the hands of the owner of the building.

The statute requiring bond to be given for payment of all materials and labor that go into the construction of public buildings or public work, is quite different from the statute involved in the instant case. There are good reasons for making the distinction, which are not necessary to be here set out.

In view of these conclusions, we think the lower court was correct in sustaining the demurrer to the bill, and the decree is affirmed, and the cause remanded.

Affirmed cmd remanded.