United States Fidelity & Guaranty Co. of Baltimore v. Marathon Lumber Co.

Citations

• 119 Miss. 802
• 81 So. 492

Syllabus

<p>1. State Contracts. Lien on funds.</p> <p>Since no lien for labor and material attaches to a state building for the erection thereof, funds in the hands of the agents of the state for the payment of the contractor cannot be applied to the payment of labor and material claims unless authorized by the contract.</p> <p>2. State Contracts. Contractor’s bond. Bights of laborers and ma-terialmen.</p> <p>Where a contractor entered into a contract for the erection of a state building, which contract provided that the contractor should furnish all labor and material for the erection of the building in accordance with the plans and specifications and should give bond insuring the fulfillment of all the provisions of the contract and covering all guarantees provided for in the contract and the prompt payment of all persons furnishing labor and material required in the prosecution of the work, and said contract further provided for the retention of funds to satisfy claims for labor performed and materials furnished, and the contractor, gave bond in a surety company: “To do and perform all things contemplated by said contract, together with all its terms, covenants and conditions, specifications and stipulations,” and assigned to his bondsmen the surety company all his rights under his contract, and thereafter defaulted on his contract and -the surety company as allowed by the contract went forward and completed the building at a loss, in such case the surety company became subrogated to all the rights and liabilities of the contractor and was obligated to pay claims for labor performed and material furnished prior to the contractor’s default and the laborers and materialmen had an equitable right to payment out of the funds retained superior to the sureties on the bond.</p> <p>3. Same.</p> <p>In such case while it true the surety company bondsman was subrogated to the rights of the owner and contractor, yet it also assumed the contractor’s burden imposed by the contract. It