State Ex Rel. Gwynns Falls Quarry Co. v. National Surety Co.

Urne®, J., delivered the opinion of the Court. A firm of sub-contractors, employed for excavation work in the construction of a state highway, used for that purpose a steam shovel which the firm had leased from the appellant, and in this suit by the latter, on the principal contractor’s statutory bond, the question is whether the appellee, as surety on the bond, is liable to the appellant .for the rent which the subcontractors agreed but failed to pay for the use of the steam shovel, and whether the surety is liable also for claims on account of' the deterioration of the machine during the period of its operation on the highway, and for the cost of its reconveyance to the point of its delivery under the lease. The decision of the lower court was that the suit could not be maintained. The contractor’s bond, which the appellee executed as surety, includes a condition that the contractor shall “pay all and every person furnishing material or performing labor in • and about the construction of said roadway, all and every .sum or sums of money due him, them or any of them for such labor and materials for -which the contractor is liable.” This condition was incorporated in the bond in pursuance of the Code provision (article 91, section 36), that the bond required to be given by a successful bidder for ²²³ state road construction work should not be accepted unless the obligors should “bind themselves therein to the payment )f all just debts for the labor and materials incurred by the udder in the construction and improvement of the road contracted for.” As compensation for the excavation work which they agreed to do, the subcontractors were to be paid a certain price per cubic yard.

The contractor made weekly payments to the sub-contractors on that basis, and claims to have fully paid for the work. A proportionate part of the premium on the contractor’s bond was charged by .him to the sub-contractors’ account. It was understood between the contractor and sub-contractors that a steam shovel was to be used for the excavation work, but there was no- agreement between the contractor and the appellant corporation that its steam shovel was to be used. It had, in fact, been leased to the subcontractors for uses not connected with the highway to which the bond in question refers.

During the progress of the road work, which continued about four months, the sub-contractors paid the appellant three hundred dollars as the stipulated amount of a month’s rent for the steam shovel, 'but the payment was credited on the rental due for the period preceding the one with which this suit is concerned. Before the work was finished the appellant offered to sell the steam shovel to the sub-contractors and to accept the overdue rent as part payment, but this option was not exercised. In order to sustain the appellant’s claim in this suit we should have to hold that his charges against the subcontractors, on account of the rental, depreciation and redelivery of the steam shovel were for labor or material used in the construction of the roadwny mentioned in the bond. It has been argued that the suit is not maintainable because it is not brought for the recovery of a debt “for which the contractor is liable,” or which he “incurred,” within the terms and meaning of the bond and of the statute providing for its execution.

But upon that theory a claim for labor or material unquestionably used in tlio construction of the road, ²²⁴ but procured by a subcontractor, might be denied the security of the bond simply because it had not been furnished at the principal contractor’s direct request. The case presented by this record does not require a decision upon that point. In