DAY & NIGHT MANUFACTURING COMPANY, a Division of Carrier Corporation, Appellant, v. FIDELITY AND CASUALTY COMPANY OF NEW YORK, Respondent
Day & Night Manufacturing Co. v. Fidelity & Casualty Co.
Zenoff and Mowbray, JJ., concur.
DAY & NIGHT MANUFACTURING COMPANY, a Division of Carrier Corporation, Appellant, v. FIDELITY AND CASUALTY COMPANY OF NEW YORK, Respondent.
DAY & NIGHT MANUFACTURING COMPANY, a Division of Carrier Corporation, Appellant, v. FIDELITY AND CASUALTY COMPANY OF NEW YORK, Respondent.
No. 5618
April 10, 1969
452 P.2d 906
[Rehearing denied May 6, 1969]
Deaner, Butler & Adamson, of Las Vegas, for Appellant.
Singleton, DeLanoy, Jemison & Reid, of Las Vegas, for Respondent.
OPINION
By the Court,
Thompson, J.:
The issue is whether a contractor's surety bond given pursuant to NRS ch. 624 affords protection to a supplier of materials. The district court ruled that it does not and upon appropriate motion dismissed the supplier's complaint. That court ruled correctly.
1. Just last year we indicated, without deciding the point, that a supplier of materials is not protected by a contractor's surety bond. Garff v. J. R. Bradley Company, 84 Nev. 79, 436 P.2d 428, 430 (1968). We there distinguished our prior opinion in Royal Indemnity Co. v. Special Service, 82 Nev. 148, 413 P.2d 500 (1966), stating: "There, the bond afforded coverage for labor and material bills incurred by the contractor, even though the contractor's licensing statute pursuant to which the bond was furnished did not specifically require such coverage." That language is clear in its meaning. A surety company may, as in Royal Indemnity, write a bond in such fashion as to afford protection to a supplier, but the contractors' licensing statute does not compel the surety to do so and, as in Garff, if the wording of the contractor's bond follows the wording of the statute, the material supplier is not protected by the bond. The material supplier is protected by the lien law of Nevada, NRS ch. 108, and may recover the obligation owing him by resort to the procedures therein specified.
2. The bond statute, NRS 624.273 (1), was written to protect (1) owners, (2) workmen, and (3) members of the general public including materialmen who are "injured by the unlawful act or omission of the contractor. . . ," In the case before us the material supplier contends that the failure of the contractor to pay him for materials furnished is an "unlawful omission" within the contemplation of the statute.
Chapter 624 is a contractors' licensing statute enacted in the public interest to control and supervise the contracting business in this state. The "unlawful act or omission" mentioned in NRS 624.273(1) is referrable to acts or omissions declared by ch. 624 to be unlawful. The contractor's surety bond is required to afford protection against that eventuality. It is unlawful for a contractor to engage in business without a license (NRS 624.230); to accept a contract in excess of license restrictions (NRS 624.290); to assign his license to another (NRS 624.305). Should these omissions or acts occur to the injury of a material supplier, the surety bond would afford protection.
The failure of a contractor to pay his supplier of materials is not declared to be an unlawful act or omission by ch. 624. The surety bond, given pursuant to ch. 624, may not be expanded to embrace occurrences not falling within that chapter, unless, of course, as in the Royal Indemnity case, the language of the bond discloses an intention to cover such occurrences.
3. The appellant suggests that NRS 624.330 possesses relevance to the issue before us, a suggestion with which the dissenting Justices agree. That section concerns persons who are exempt from the operation of ch. 624. Such persons need not be licensed as contractors, nor furnish the surety bond required by NRS 624.270. The section has nothing whatever to do with the scope of coverage of the surety bond.
Affirmed.
Zenoff and Mowbray, JJ., concur.
The statute reads: "1. Each bond or deposit required by NRS 624.270 shall be in favor of the State of Nevada for the benefit of any person who:
(a) As owner of the property to be improved entered into a construction contract with the contractor and is damaged by failure of the contractor to perform such contract or to remove liens filed against such property;
(b) As an employee of the contractor performed labor on or about the site of the construction contract; or
(c) Is injured by any unlawful act or omission of the contractor in the performance of a contract."