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  5. 269 N.W.2d 766 (1978)
 

McLAUGHLIN ELEC. SUPPLY v. AM. EMPIRE INS.

Nos. 12016, 12030, 12031 and 12042.

269 N.W.2d 766 (1978)

McLAUGHLIN ELECTRIC SUPPLY, a South Dakota Corporation, d/b/a Plainsco, Plaintiff and Respondent, v. AMERICAN EMPIRE INSURANCE COMPANY, Defendant and Appellant, (No. 12016) and Pete Lien & Sons, Inc., Defendant and Appellant, (No. 12030) and Henry J. Bachmeier and Elaine D. Bachmeier, Defendants and Appellants, (No. 12031) and Wesley Scholl, d/b/a Scholl Construction Company, Defendant and Appellant, (No. 12042) and Knecht Industries, Inc., Birdsall Sand & Gravel Company, and Northwest Pipe Fittings, Defendants and Respondents, and Black Hawk Industrial Service, Inc., a South Dakota Corporation, National Bank of South Dakota, Hills Red-E-Mix, and Black Hills Masonry, Defendants.

Supreme Court of South Dakota.

Decided August 24, 1978.

Attorney(s) appearing for the Case

James H. Wilson of Wilson, Olson & Goodsell, Rapid City, for plaintiff and respondent McLaughlin, and defendants and respondents Knecht, Northwest Pipe Fittings and Birdsall, and defendant and appellant Lien; Gunderson, Farrar, Aldrich, Warder, DeMersseman & Johnson, Rapid City, on the brief for defendants and respondents Knecht and Northwest Pipe Fittings, Bangs, McCullen, Butler, Foye & Simmons, Rapid City, on the brief for defendant and appellant Lien and defendant and respondent Birdsall.

Carleton R. Hoy of Davenport, Evans, Hurwitz & Smith, Sioux Falls, for defendant and appellant American Empire Ins. Co.

Franklin J. Wallahan of Hanley, Wallahan, Huffman & Konenkamp, Rapid City, for defendants and appellants Bachmeier.

Verne E. Thorstenson, Rapid City, for defendant and appellant Scholl Const. Co.

DUNN, Chief Justice.

This case arises as a result of an alleged failure of Black Hawk Industrial Services, Inc. (Black Hawk), to adequately construct a trailer campground for the Bachmeiers. The issues raised involve mechanics' liens and the liability of American Empire Insurance Company (American), the bonding company. We affirm in part and reverse and remand in part.

The Bachmeiers decided to construct a campground in the Black Hills in 1973. They hired...

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