Powell v. Fowler

McCulloch, J., (after stating the facts.) It is conceded that the evidence was sufficient to sustain the verdict, and that no errors were committed in the admission of evidence. The only errors assigned are in the giving and refusing of instructions to the jury. It is unnecessary to set out the instructions given and refused, as they can be intelligently discussed without doing so. There was evidence introduced to the effect that the advance due to be made on September x, 1905, was not made by appellee Fowler at that time, but that by agreement between him and R. P. Powell the time for that payment was postponed for an indefinite length of time. The court, over the objection of the defendants, gave the following instruction: “2. You are instructed that an agreement merely to hold back the payment of the September advance until the end of the contractual year is not sufficient to discharge the surety in toto, but that said surety will be discharged only to the extent that he is injured by reason of the withholding of said advance.” Appellants, in support of their objection to that instruction, invoke the well-established doctrine that any agreement changing the time of the contract between the principals without the consent of the surety operates as a discharge in toto of the latter. It is sufficient to say that the doctrine contended for has no application to the facts of this case, because the undisputed evidence shows that, notwithstanding the contract of the surety bore date as of July i, 1905, it was not signed by him and delivered to appellee until November 1, 1905, which was after the alleged part payment of the September advance, and that he (the surety) knew of this when he signed and delivered the contract of suretyship. HLe can not therefore set up as a discharge from liability that which was known and consented to by him when he executed the contract. 27 Am. & Eng. Enc. of Law, p. -528-9, and authorities cited. The instruction was therefore more favorable to appellants than the law justifies. Of course, if appellee, as testified to by R. P. Powell, refused to advance the payments due in September, and thereby prevented or interfered with him in the performance of his contract, he and his surety would both be discharged from liability to the extent of the damage incurred by reason of withholding such advance, but to no further extent. But the surety could not repudiate his contract and claim release from all liability on account of the withholding of the payment, of which he was advised, and to which he tacitly consented by signing and delivering the bond. We think, too, that the agreement to postpone the payment of the September advance was not such a material change in the contract as would operate as a discharge of the surety. The surety by the terms of his bond expressly consented to any change in the contract which did not materially vary the agreement. He agreed that his bond of suretyship should apply to any further agreement not materially different in terms. The alleged agreement to postpone the September payment was in effect the making of a new agreement to that extent; and, as it did not materially vary the terms of the agreement, it was authorized by the terms of the bond. Unlike the agreement for extension of the time of payment of a debt for which a surety is bound, the postponement of the payment of the September advance did not affect the rights of the surety, for it did not increase or extend his liability or materially change the contract which he obligated himself to perform for his principal by refunding all moneys due to appellee Fowler. Appellants complain of the refusal of the court to submit to the jury the question of damages alleged to have been sustained in the loss of the additional commissions of $4 per thous- and in excess of $500,000 of insurance to be written during the year. The court refused to submit this question as an element of recoverable damages, on the ground that it was too remote and speculative. No prejudice resulted from the refusal to submit this question, as the jury, in finding in favor of appellee for the amount of money advanced, necessarily found that appellee did not prevent or interfere with Powell in complying with his agreement to secure applications for as much as $500,000 of insurance on which the company would be willing to issue policies. As Powell did not procure $500,000 in accepted applications, and the jury found that Fowler did not by his conduct prevent him from procuring that much insurance, it necessarily follows that he could not have earned the additional premiums on applications in excess of $500,000. Appellants requested the court to give an instruction to the effect that if Fowler “caused R. P. Powell to devote a material part of his time to other work,” that would release the surety. The court refused to give the instruction in the form asked, but modified it so as to tell the jury that “if Fowler and R. P. Powell made material changes in the agreement by which Powell was to devote any material part of his time to other work,” that would release the surety. The modification was correct. If Fowler imposed additional duties upon Powell without altering the original contract, and which did not interfere with the performance of the contract, that would not operate as a release of the surety; but if the principal changed the contract materially so as to make it a new contract, the performance of which the surety did not guaranty, then he would not be liable for the failure to perform it. It is argued by counsel for appellant that the instruction, even as modified, was too favorable, because, it is said, in a contract for perform,ance of personal services', unlike a building contract, the agreement for additional services does not affect the liability of the surety unless the additional duties interfere with the performance of the original contract. Whether this is correct we need not decide. The following is stated to be the law on that subject on good authority: “The general principle controlling in such cases is that the surety for the performance of the original duties is not discharged unless the new duties materially affect the performance of the old, or affect the obligation of the principal in respect to the old, thus increasing the risks of the surety.” 27 Am. & Eng. Enc. of Eaw, p. 499, and cases cited. The court was asked to instruct the jury that “if the plaintiff’s negligence, or laches, or nonperformance of his part of the contract, or his interference with the work of R. P. Powell, contributed to prevent R. P. Powell from carrying out his part of the contract, he cannot recover against either of the defendants” ; but 'the court modified the instruction so as _ to say that if such conduct on the part of the plaintiff caused Powell to fail to carry out the contract, he could not recover. The modification amounted only to a change in phraseology, and was immaterial. If Fowler’s alleged misconduct contributed to prevent Powell from carrying out his contract, then it caused him to fail to carry out the contract; but, notwithstanding such misconduct on the part of Fowler, if Powell could have performed the contract and did not, then neither he nor the surety was released. Error of the court is also assigned in the refusal to give the first instruction asked by appellants; but, as the substance of this instruction was fully covered in another given at their request, no prejudice resulted. No error is found in the proceedings, and the judgment is affirmed.