City of Lancaster v. Frescoln

Opinion by

Mb. Justice Fell,

This, action is upon a bond given to secure the compliance by S. W. Frescoln with the provisions of a contract into which he entered with the city of Lancaster for the construction of a reservoir. The contract provides among other things that Frescoln shall pay or secure the wages for labor and the price of materials used. The conditions of the bond are that he shall complete the work in a satisfactory manner; that he shall pay or secure the wages of laborers and the price of materials, and that he shall not employ alien labor. The action is brought in the name of the city of Lancaster to the use of three parties who furnished materials. The principal in the bond was not served, and the defense is made by the American Surety Company in its own interest only.

The main grounds of defense set up in the affidavit filed by the surety company are: first, that the bond imposes upon it ho liability to the use plaintiffs; secondly, that all matters between it and the legal plaintiff arising out of the contract were adjudicated in an action brought on the contract by S. W. Frescoln against the city of Lancaster in which he recovered $13,750, the balance found to be due him for constructing the reservoir.

A general ordinance of the city of Lancaster provides that contractors for city work shall be required to give additional bonds to the city for the use of any persons who may be aggrieved by their failure to pay for work done or materials furnished. The special ordinance authorizing the construction of the reservoir and awarding the contract required the contractor to enter security for the faithful performance of the contract. In an action on a bond given under the general ordinance an entirely different question would be presented, but this bond was not given under that ordinance. It is not an additional bond, and is not for the use of third parties. It was given under the special ordinance, and its conditions correspond with the stipulations of the contract. In an action against a surety the obligation of a bond cannot be extended beyond the plain import of the words used. This bond is given to the city of Lancaster, and primarily for its benefit; it is the only party entitled to sue, and no recovery can be had except in its right. That the use plaintiff might incidentally be benefited by the city’s withholding payment until their claims had been satisfied gave them no right of action. The bond is not like one given to secure the performance of official duties, or one whose primary object is the protection of third parties, on which suit may be brought by the parties injured in the name of the nominal obligee.

The action brought by S. W. Frescoln against the city to recover the balance claimed to be due him under the contract necessarily included every matter touching this right. The rule that what has once been judicially determined shall not again be made the subject of litigation extends to every question in the proceeding which was legally cognizable. That the claims for labor and materials were unpaid by the plaintiffs was a proper ground of defense in that action, and all of these matters must now be considered as conclusively adjudicated. The city could not maintain this action, and as the use plaintiffs here have no standing except upon the city’s rights it follows that they cannot recover.

The judgment is reversed.