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American Surety Co. v. Brummel.

November 1, 1950

AMERICAN SURETY CO. OF NEW YORK
v.
BRUMMEL.



Huxman

Before BRATTON, HUXMAN and MURRAH, United States Circuit Judges.

HUXMAN, Circuit Judge.

The sole question in this case is whether a claim for rentals due for equipment rented by a contractor and used in fulfillment of a construction contract falls within the provisions of a surety or payment bond given by a surety company to guarantee performance of the contract.

The condition of the bond is that, "* * * if the said principal or subcontractors of said principal shall pay all indebtedness incurred for supplies, material or labor furnished, used or consumed in connection with or in or about the construction or making of the above described improvement, this obligation shall be void, otherwise, it shall remain in full force and effect."

The facts are simple and not in dispute. One Floyd W. Silcott (not a party to this suit) entered into a contract with the City of Harper, Kansas, for construction work on the municipal airport. The contract was entitled "Specifications and Contract Documents." The project was supported by federal funds and "Specifications and Contract Documents" were more or less standard for this type of work. Silcott was required to furnish a payment bond. The appellant insurance company executed the bond. Silcott failed to pay the rental for the use of the equipment and the owner of the equipment instituted this action on the bond for the recovery of the amount due him from the contractor. The company has appealed from the judgment against it for the amount of these items.

The claim merged in the judgment consisted of three separate items - rentals, repairs, and the cost of transporting the equipment back to appellee's place of business in compliance with the rental agreement. The correctness of these items is not in question. The only question is whether they fall within the coverage of the bond.

Three assignments of error are urged for reversal. They are:

1. The court erred in concluding and holding that the contract in question is governed by the laws applicable to the Federal Airport Act, 49 U.S.C.A.ยง 1101 et seq. and not by the laws of the State of Kansas.

2. The court erred in concluding and holding that the items of rental, repairs and transportations sued on in the plaintiff's petition are lienable under the Kansas law.

3.The court erred in rendering judgment for the plaintiff and against this defendant.

We find nothing in the record indicating that the trial court predicated its judgment on the grounds set out in assignments one and two. No findings of fact or conclusions of law were made and no opinion is on file in this case. Neither does the court's judgment indicate the theory upon which judgment was rendered against appellant.

It has been held repeatedly that a correct judgment will not be disturbed on appeal merely because it is based upon an erroneous theory of law.*fn1 So, if the judgment is correct as a matter of law, it will not be disturbed because the ground upon which it is predicated does not appear in the record.

For the purpose of this opinion, we will assume that the legal liability under the bond is to be measured by Kansas law. It may also be assumed, without so deciding, that under the Kansas Lien Statute, G.S.Kan. 1935, 60-1401, rental items such as these are non-lienable items. In this posture of the case, we nonetheless conclude that the judgment must be affirmed.

In Shannon v. Abrams, 98 Kan. 26, 157 P. 449, the Kansas Supreme Court held that where the surety bond obligated the surety to pay for all labor and material and all other obligations or liabilities incurred in the doing of the work that it was liable for non-lienable, as well as lienable items.The effect of this decision is that a surety may obligate itself for claims other than those that ...


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