Opinion
43211.
ARGUED NOVEMBER 7, 1967.
DECIDED DECEMBER 4, 1967. REHEARING DENIED DECEMBER 18, 1967.
Action on bond. Fulton Civil Court. Before Judge Webb.
Archer D. Smith, III, Nolan B. Harmon, for appellant.
Lipshutz, Macey, Zusmann Sikes, J. Timothy White, for appellees.
The petition failed to state a cause of action against the defendants; therefore, the general demurrer was properly sustained.
ARGUED NOVEMBER 7, 1967 — DECIDED DECEMBER 4, 1967 — REHEARING DENIED DECEMBER 18, 1967 — CERT. APPLIED FOR.
West End Tin Shop, Inc., d/b/a Advanced Metal Welding Co., brought an action against Algernon Blair, Inc., the principal contractor on a United States Government building project, and its performance bond surety, United States Fidelity Guaranty Co., and Broyles Broyles, Inc., a subcontractor, and its payment bond surety, United States Fire Insurance Co., for damages for labor and material furnished for the project as a subcontractor of E. F. Evans Co., Inc., a bankrupt subcontractor of defendant subcontractor, Broyles Broyles, Inc. The action became one solely against the defendant subcontractor and its defendant surety when a plea to the jurisdiction on behalf of the principal contractor and its surety was sustained. Attached to the petition as exhibits were copies of all contracts, subcontracts and bonds. The subcontract between the principal contractor and defendant Broyles Broyles, Inc. provided, in part, as follows: "Article I — Subcontractor shall furnish all labor, materials, fuel, equipment tools, machinery and supplies; perform all work; and do all things necessary to complete the following part or parts of the work of the General Contract. . . Article XVI — (a) Subcontractor shall not sublet, assign or transfer this subcontract, or any part thereof, without the written consent of Contractor. However, in event of a subletting, assignment or transfer of this subcontract, as between the Contractor and Subcontractor herein, the Subcontractor shall remain fully bound to the Contractor under all terms of this agreement. (b) In all events Subcontractor, in addition to all Subcontractor's other obligations hereunder, shall be liable for and shall indemnify and hold harmless the Contractor from any and all claims of every kind and character which may be made by or for the account of any subcontractor of the Subcontractor herein and from all claims of every character and description which may be made against any subcontractor of the Subcontractor named herein." (Emphasis supplied.) The payment bond of the defendant subcontractor provides that it and its defendant surety are held and bound in the stated amount to the prime contractor "and all persons furnishing labor, services, materials or supplies, machinery, equipment, tools and all other items under or for the purpose of the contract. . ." (Emphasis supplied.)
The court sustained the defendants' renewed and additional general and special demurrers to the petition as amended, from which judgment the plaintiff appeals.
Since the jurisdiction of the trial court over the case is conceded by both sides, the issue is not here ruled on.
Under Article XVI (a) of the subcontract between the principal contractor and the defendant Broyles Broyles, Inc., the latter was prohibited from subletting the subcontract, or any part thereof, without the written consent of the principal contractor. The petition does not allege that the subcontract between Broyles Broyles, Inc. and E. F. Evans Co., Inc. was made with the written consent of the principal contractor.
The petition and its attached exhibits show that the plaintiff was a subcontractor of a subcontractor of the defendant subcontractor. That the defendant subcontractor's liability did not extend far enough, under its subcontract with the principal contractor, to include the plaintiff's claim may be seen by reference to the restriction in Article XVI (b) of said contract of claims to those of only subcontractors of the subcontractor named therein (defendant). This provision, together with the one for written consent to any further subcontracts, was included for the purpose of protecting both the principal contractor and the defendant subcontractor from claims arising out of subcontracts with additional parties whose identity, reputation and financial situation may be unknown to them.
Nor does the broad language of the defendant subcontractor's payment bond, which purports to include "all persons furnishing labor, services, materials or supplies, machinery, equipment, tools and all other items under or for the purpose of the contract" (emphasis supplied), require a different result. The courts, in construing the similar provisions of the Miller Act (Title 40, § 270 (b), USCA) with respect to payment bonds, i.e.: "Every person who has furnished labor or material in the prosecution of the work provided for . . . in respect of which a payment bond is furnished . . . shall have the right to sue on such payment bond for the amount, or the balance thereof . . . [emphasis supplied]" have held that even such broad, sweeping language does not extend the coverage to each and every person doing something connected with the bonded contract; to do so would violate traditional contract theories of privity, contemplation of the parties and coverage. See Clifford F. MacEvoy Co. v. United States, 322 U.S. 102 ( 64 SC 890, 88 LE 1163); Fidelity Deposit Co. of Md. v. Harris, 360 F.2d 402, 408; Elmer v. U.S. Fidelity Guaranty Co., 275 F.2d 89 (5th Cir.).
The petition as amended failed to state a cause of action against the defendants for the reason that the coverage of the bond contended for was not in the contemplation of the parties; therefore, the court did not err in its judgment sustaining the general demurrer.
Judgment affirmed. Hall and Eberhardt, JJ., concur.