(1) Whenever any railroad, reservoir, or irrigating canal company contracts with any person or corporation for the construction of its railroad, reservoir, or irrigating canal, or any part thereof, such company shall take from the person or corporation with whom such contract is made a good and sufficient bond, conditioned that such contractor shall pay or cause to be paid to all laborers, mechanics, materialmen, ranchmen, farmers, merchants, and other persons who supply such contractor, or any of his or her subcontractors, with labor, work, laborers, materials, ranch or farm products, provisions, goods, or supplies of any kind all just debts incurred therefor in carrying on such work, which bond shall be filed by such company in the office of the county clerk and recorder in the county where the principal work of such contractor is carried on. If any such railroad, reservoir, or irrigation canal company fails to take such bond, such company shall be liable to the persons mentioned to the full extent of all such debts so contracted by such contractor or any of his or her subcontractors. Any such contractor may take a similar bond from each of his or her subcontractors to secure the payment of all debts of the kind mentioned incurred by such contractor and file the same.
(2) All such persons mentioned in this section to whom any debt of the kind mentioned is due from any such contractor or subcontractor shall severally have a right of action upon any such bond covering such debt taken as provided for the recovery of the full amount of such debt. A certified copy of the bond shall be received as evidence in any such action. In order that the right of action upon such bonds may exist, such person or parties granted such right shall comply with either of the following conditions:
An action in a court of competent jurisdiction in the county where such bond is filedshall be commenced within ninety days after the last item of indebtedness has accrued; or
An itemized statement of the indebtedness duly verified shall be filed within ninetydays after the last item of such indebtedness has accrued in the office of the county clerk and recorder of the proper county, and an action shall be brought in any court of competent jurisdiction of such county within three months after the filing of such statement.
(3) In case an action is commenced upon the bond of a contractor, such contractor may give notice thereof to the subcontractor liable for the claim. In such case the result of such action shall be binding upon the subcontractor and his sureties. In any case when a contractor has paid a claim for which a subcontractor is liable, such contractor shall bring action against the subcontractor and his sureties within sixty days after the payment of such claim.
Source: L. 11: p. 490, § 1. C.L. § 6481. CSA: C. 39, § 1. CRS 53: § 86-7-1. C.R.S. 1963: § 86-7-1. L. 2000: (1) amended, p. 212, § 15, effective August 2.