U. S. Fidelity & Guaranty Co. v. D'Angelo

On Rehearing. LAND, J. In addition to the reasons assigned in our original opinion for sustaining the exception of no cause of action filed by the owner of the building, the right to provoke a concursus proceeding under Act 221 of 1914, amending and re-enacting section 1 of Act 167 of 1912, is granted by said *191 act solely to the owner of the building, and this right cannot be exercised by him until 30 days after the completion of the work and the registry by the owner in the office of the recorder of mortgages of his acceptance of same. Within this delay of 30 days, all claimants are required to file a sworn statement of their claims with the owner and to record a sworn statement thereof in the office of the recorder of mortgages for the parish where the work is done. If at the expiration of the said 30 days there are such recorded claims filed, the owner is required to file a petition in a court of competent .jurisdiction citing said claimants, the contractor against whom said claims are, filed, and the surety on his bond, and it is the duty of the owner to assert whatever claim he has against any or all of them, and to require said claimants to assert their claims, all of which are to he tried in concurso. Act 221 of 1914 expressly provides in section 1 of said act that — “The purpose of this act is to require owners to secure bonds with solvent and sufficient security of the contractor for the protection of all parties interested in the contract, and as their interest may occur, and said surety, and, in default of surety, the owner, is to stand in the place of a defaulting contractor.” The conditions of the bond are the true and faithful performance of the building contract and the payment of all subcontractors, workmen, and furnishers of material, and said bond is required by said act to be made in favor of the owner, subcontractor, workmen, and furnishers of material. The owner is also required to see to it that the building contract shall be reduced to writing, and signed by the parties, and that said bond shall be attached to said contract and recorded with it in the office of the recorder of mortgages of the parish wherein the work is to be executed, before the day fixed on which said work is to commence, and not later than 30 days after the date of said contract,, and it is provided in said act that such recordation shall create a lien and privilege on the buildings to be constructed and on the ground in favor of the contractor, subcontractor, workmen, and fur-nishers of materials. The very object of said act, as stated in its title, is to provide for the bond to he given for the protection of the owner, subcontractor, workmen, and furnishers of materials. It is therefore provided in said act that when the owner has complied with its terms, that he is fully protected and he becomes in default and is made liable to the same extent that the surety would have been, only in the event the surety is found to be not solvent or insufficient to cover the full amount for which he is bound, or if the owner fails to exact bond, or if he fails to cause same to be recorded in the office of the recorder of mortgages in the manner or in the time provided in said act. The surety company in its petition in this case does not allege that the defendant owner has failed to comply with any of the requirements of this act; but claims that it has the right to provoke a concursus proceeding, because the owner has caused the contractor to erect the building contrary to the terms of the contract, because he has had some of the work torn out by the contractor, and has taken charge of the building himself, and because the workmen and fur-nishers of materials have recorded their claims against the building, and, in some instances, have instituted suit against the surety company. Plaintiff alleges that the second installment due under the building contract was placed in its hands by the contractor and the owner, that it has paid out a portion of this sum, and desires to deposit the remainder in court; and that, upon its so doing, it is entitled to be relieved of any and all obligations under its contract of suretyship whether to the owner, the *193 contractor, or to said claimants or any of them, as judgment in these concursus proceedings should be rendered against the owner for the balance due by him under said building contract, and that the owner should be ordered to deposit same in the registry of the court to be distributed in such manner as the court may determine. The surety company in this case seems to be under the impression that it did not bind itself in favor of the owner for the faithful performance of the building contract and in favor of the workmen and furnishers of materials for the payment of their claims, but that its sole obligation as surety is to provoke a concursus proceeding and to compel the owner to pay all of these claimants and then its obligation as bondsman will have been fully satisfied. In this view we cannot concur. The contract, or bond, under the statute, is not the accessory promise by which a person binds himself for another already bound, as is provided for in article 3035 of the Civil Code. Here, the owner was bound only in the event that he failed to require the bond mentioned in the act, and to comply with its requirements as to sufficiency of the surety, and as to recordation of bond and contract. [3] It follows, therefore, that the rules of law with reference to the ordinary contract of suretyship cannot be applied indiscriminately to such a case. The bond in this case performs a double function. It secures, in the first place, to the owner, the faithful performance of the contract by the contractor; and, in the second place, it is intended to protect third persons from whom the contractor obtained materials and labor. These two obligations are as distinct as if they had been contained in separate instruments. The act of the Legislature requiring the bond to be made in favor of the workmen and furnishers of materials, as well as in favor of the owner, as their interests may occur, gave to the workmen and materialmen distinct individual rights of which they cannot be deprived by any unauthorized acts of the owner or the contractor, or by any one other than themselves. Materialmen and laborers, therefore, are not concerned as to the alterations made in the work, and any alleged breach of the building contract in this case by the owner or the contractor did not affect the rights of action of the workmen and furnishers of materials'against the surety on the bond. Under the law and present conditions, which give the material-men and laborers on buildings security for their goods and wages, with bonds by compensated sureties, or insurers, to protect them, it is obviously unjust and unlawful to apply the rules of law concerning voluntary suretyships. Victoria Lumber Co. v. Wells, 139 La. 503 , 504, 505, 506, 71 South. 781 , L. R. A. 1916E, 1110, Ann. Cas. 1917E, 1083. A concursus proceeding, therefore, if the same could be legally provoked by plaintiff, would not relieve it' of its liability to the materialmen and workmen in this case. Our former judgment, being correct, is therefore reinstated and made the judgment of this court. O’NIELL and DAWICINS, JJ., dissent.