R. C. Mahon Co. v. R. S. Knapp Co. , 262 Mich. 325 ( 1933 )

In my opinion the judgment must be affirmed. The bond was not made for the benefit of plaintiff, nor was there any "obligation or duty resting upon the promisor to the third person, giving him a legal or equitable claim to the benefit of the promise." Claxton v. Margolis, 248 Mich. 199.

The bond provides that the principal and surety "are held and firmly bound unto Inter-City Trucking Service, Incorporated." It contains no provision for enforcement by anyone else. It was given for the benefit of the owner, to insure performance of the contract at the agreed cost. The instrument must be construed as a whole and in the light of the fact that persons furnishing labor and materials to the building have protection by way of mechanic's lien. If all persons who could have "claims and demands incurred for the same" may sue on the bond, their combined actions could exhaust it and leave the owner remediless. It is not a reasonable construction of the bond that it was intended to give contractors, materialmen, and laborers security, in addition to the right of lien, which could impair the purpose of the bond to protect the owner.

The contractor owed no legal or equitable duty or obligation to plaintiff in connection with the bond. Its obligation to plaintiff arose from and was measured by a separate and distinct contract between them. The security of plaintiff for payment rests upon the provisions of such separate contract together with the lien law.

POTTER, NORTH, and BUTZEL, JJ., concurred with FEAD, J.