Green Bay Lumber Co. v. Independent School District

I am unable to agree with the opinion of the majority, for the reasons stated in the opinion filed upon the original submission of this case, found in 97 N. W. Rep. 73, and think the judgment should be reversed.

The sole question on this appeal is whether the bond executed by the contractor to the school district was also intended for the-benefit of sub-contractors furnishing labor and materials. If not so intended, the sureties are. not liable, and the demurrer was properly sustained. It will be observed that the contract merely required Weaver to provide materials and perform the labor, but contains no stipulation in relation to the payment therefor by him. A condition for compliance therewith imposed on the bondsmen no liability to the subcontractors. Noyes v. Granger, 51 Iowa, 227; Puget Sound Brick & Tile Co. v. School Dist. 12 Wash. 118 (40 Pac. Rep. 608). The bond exacted first the erection of the building in compliance with the contract, and its “delivery free from any liens or claims of any kind.” As no liens or •claims might be asserted against the building, the sureties were safe in pledging that it should be without them. Charnock v. Dist. Tp. of Colfax, 51 Iowa, 70. Certainly an agreement to discharge them cannot be implied from a contract that a building shall be delivered clear of liens and claims, and it is inferred therefrom that payment shall be made of claims which could in no event be asserted against the building. Baker v. Bryan, 64 Iowa, 561, con*666tains nothing to the contrary. There the contract required that the contractor “shall have produced receipts for labor and material used thereon” before the last fifteen per cent, of the price should be paid, and the bonds stipulated that he shall “pay all claims for material, labor,” etc.,'“used in the construction of said building and produce proper receipts therefor.” This amounted to a direct promise to make payment to those entitled thereto. Neither the bond nor the contract in suit exacts of the contractor payment of labor or materials used in the-building. The only provision, aside from that quoted',, •which could be relied on, is the condition that he “shall pay any sum of money that said Independent School District of Odebolt, Iowa, may be compelled to pay to remove any liens and incumbrances or claims of any kind against said building or which may be claimed against the Independent School District of Odebolt, Iowa, and shall pay any and all expenses that said Independent School District of Odebolt, Iowa, may incur.” This does not bind contractor or sureties to pay any claims whatever, but merely to reimburse the district any sums of money it may be compelled to pay to remove liens, incumbrances, or claims against the building, or any of these which may be claimed against the district. By no fair construction can the language be said to bind the contractor to pay any liens or claims whatever. It binds him to do no more than repay the district what it has been comj)elled to pay for the purposes mentioned. A careful reading of the-bond leads to the inevitable conclusion that the sole ob ject had in its execution was the indemnity of the school district. Not having been executed for the benefit of the-labor and material men, they cannot recover thereon.. See Weller v. Goble, 66 Iowa, 113; Hunt v. King, 97 Iowa, 83. The suggestion that the district became liable because-of knowledge that plaintiff was furnishing material on credit is disposed of by Epeneter v. Montgomery Co., 93 *667Iowa, 159. In Iowa Brick Co. v. Des Moines, 111 Iowa, 272, it appeared that a sum necessary to pay the company was on hand after the claim was filed, and all held was that plaintiff was entitled to priority out of the fifteen per cent., of the contract price reserved for the benefit of subcontractors in the order of the filing of claims. What has been said disposes of the contention that plaintiffs may recover on the bond, even though something be found owing by the district. The bond not being for their benefit, no recovery may be had thereon. The demurrer was rightly sustained. — Aeeirmed.