French v. Farmer

California Supreme Court May 3, 1918 No. L. A. No. 4224. Department Two.Published

Before: Wilbur

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Holding. The court held that a third-party supplier of goods and provisions may recover on a contractor's bond intended for their benefit, but that the lessor of equipment and the employer of a laborer lack standing to sue for rental fees or labor costs under the specific terms of this bond.

Issues

Whether a third party may sue on a bond that does not expressly name them but contains a condition to pay for goods and provisions.
Whether the lessor of teams and equipment is a person to whom work is given under the bond.
Whether an employer may sue on a bond for the wages of an employee paid by the employer.

Disposition. modified and affirmed

Quotations verified verbatim against the opinion

“If, under the circumstances, any effect whatever is to be given to this clause in the condition of the bond, it must be held that it was the intention of the parties to benefit such third persons rather than the Railway Company”

“We therefore hold that the plaintiff was entitled to recover the item for goods and provisions.”

Synopsis

The facts are stated in the opinion of the court.

Carroll Allen, Bertin A. Weyl, and Allen & Weyl, for Appellant.

WILBUR, J.

The defendant, National Surety Company, appeals from a judgment in favor of plaintiff upon a common-law bond executed by the defendant to the Grand Canyon Railway Company, conditioned upon the faithful performance of “all the stipulations and agreements contained in” a contract entered into between defendant Farmer and said Railway Company, on the part of said Farmer to be performed and observed, and further conditioned that said Farmer “shall well and faithfully pay all laborers, mechanics, and materialmen, and persons who shall supply such contractor with provisions or goods of any kind, all just debts due to such persons, or to any others to whom any part of such work is given, incurred in carrying on such work.” The contract between Farmer and the Railway Company was for the construction of a wagon road in the Grand Canyon, Arizona, upon the property of the United States government. This contract provided, among other things, that “the contractor shall promptly pay all subcontractors, materialmen, laborers, and other employees as often as payments are made to him by the company, and shall deliver said work free from any claim or lien on account of such labor and materials and subcontractors; ...” The form of the bond was identical with that set out in the opinion in the case of the

National Bank of Cleburne

Gulf etc. Ry. Co.,

95 Tex. 176, [66 S. W. 203].

The plaintiff, French, by contract in writing, leased to the defendant, Farmer, the contractor, to be used in the performance of the latter’s contract with the Railway Company, thirty-two head of mules, one saddle-horse, and sixteen sets of harness. He also agreed to furnish a “corral boss,” to be paid by Farmer. Farmer having failed to pay therefor, this action was brought by French against Farmer and the Surety Company to recover four thousand two hundred dollars rental for the use of the

[220]

teams and saddle-horse; $10 for services of corral-man, and $5 for expenses of corral-man, and $75 for hay and barley sold. Judgment was rendered against defendant Farmer and the defendant Surety Company. The appeal is by the Surety Company only. It is claimed that there is not sufficient privity between the defendant Surety Company, as obligor of the bond, and the plaintiff to authorize suit by him upon the bond. That point, however, has been determined adversely to appellant’s contention by this court in

French v. Farmer

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Synopsis

WILBUR, J.

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