Roland v. Lindsey

Wood, J., (after stating the facts). Appellees have not asked any affirmative relief on their appeal. So it will only be necessary for us to determine whether or not the judgment as against appellants should be reversed for the errors assigned. 1. It is first contended that the court erred in overruling the demurrer to the complaint. The complaint did not allege in specific terms that the plaintiffs had complied with the terms of the contract and bond on their part, but the allegations were otherwise sufficient to raise the issue as to whether or not the appellees had duly performed the contract. The complaint alleged that the contractors had failed to complete the building in the time stipulated in the contract, and that they, without cause or excuse, abandoned the contract when the building was unfinished. If the contractors abandoned the contract before the building was finished without “cause or excuse,” then appellees must have complied with the provisions of the contract to be performed by them, for if they had not it could not be alleged that the contractors had abandoned the contract without cause or excuse. A failure of the appellees to comply with the contract on their part would be cause or excuse for an abandonment of the contract on the part of Roland & Gray.' 2. It is next contended that the court erred in giving instruction 16 at the request of appellees, and also erred in its oral instructions explaining the same. In instruction number 16 and in the oral instruction explaining the same the court correctly told the jury how to find the percentage to which the lien claimant would be entitled," in accoradnce with the rule approved by this court in Pratt v. Nakdimen, 99 Ark. 263. But the court, in this instruction and in the explanation thereof, also told the jury to multiply the percentage thus obtained by the amount of lien claims paid by the owners, and that the product would be the amount the appellees would be entitled to recover in lieu of the lien claims paid by them. The instruction and the explanation thereof were erroneous, in so far as they told the jury that the amount the appellees would be entitled to recover in lieu of the lien claims would be the product produced by multiplying the pro rata percentage of each lien claimant by the amount of lien claims paid by the appellees. The instruction and the explanation thereof are erroneous in that they failed to tell the jury that from the product, obtained as above, should be subtracted all sums that had been previously paid to the lien claimants, and that the remainder would be the amount that appellees were entitled to recover. The rule approved in Pratt v. Nakdimen, supra, is that “the percentage is to be figured upon the entire amount of the original claims of the lienors, and from the pro rata or percentage thus obtained shall be taken the amount already paid them.” The testimony tends to show that the lien claimants would be entitled to approximately 90 per cent, of the total amount of their claims, and both appellants and appellees have based their calculations on that percentage. Without going into detail and setting out the evidence upon which we base our conclusion, we find that, applying the above rule and figuring 90 per cent, of the total amount of claims and deducting from the product the amount of the payments already made to the lien claimants, they would have been entitled to recover the sum of $1,104.89. Appellees, having paid off the amount of the lien claims, would be entitled' to recover that amount. The pleadings and evidence show that there was, of the contract price remaining in the hands of the owners at the time of the abandonment of the contract by Roland & Gray, the sum of $458.50. The contractors conceded that it would require the sum of $150 to finish the building. Therefore, the owners had in their hands at the time of the abandonment of the contract, to be applied on lien claims, the sum of $458.50, less $150, or the sum of $308.50. This amount, deducted from the amount of lien claims which the owners would have been entitled to recover, would leave a balance of $795.80. The difference between this and the amount of the verdict is $218.20. It therefore occurs to us that the erroneous instruction might have resulted to the prejudice of appellants to the extent of $218.20. There was a condition in the bond to the effect that Roland & Gray, the contractors, would carry out their contract and complete the building free of mechanics’ liens, and that the bond was made for the benefit of all who might become entitled to liens under the contract. It was further conditioned that they would promptly pay and discharge all indebtedness that might be incurred by them in carrying out their contract. Appellees therefore, under the contract and bond, were entitled to judgment against the appellants for the amount of the lien claims which they had paid after the contractors had abandoned their contract. 3. Article 11 of the contract provides: “The owner shall, during the progress of building, maintain insurance on the same against loss by fire to the amount of three-fourths of the value of the building as it progresses, the policies to cover all work incorporated in the building and all materials furnished same in or about the premises, and to be made payable to the parties hereto as their interests may appear.” It was admitted that “no insurance had been written on the building during the time the work was in progress and made payable to the parties to the contract as their interests appeared.” The appellants contend that the failure of the appellees to comply with this provision of the contract released them from liability. The court, over the objection of the appellants, instructed the jury, at the request of appellees, that “the failure to carry insurance, if any, resulted in no harm, and is no defense either for the contractors or the bondsmen.” The court also refused a prayer of appellants to the effect that the failure on the part of the appellees to maintain insurance as provided in the contract would release the appellants who executed the bond from liability. There was no loss by fire during the progress of the building. The Supreme Court of Indiana, in passing upon this question, in Hohn v. Shideler, 164 Ind. 242, held as follows: “Where a building contract required the owner to insure the buildings and the materials on the premises in his own name or in the name of the contractor, the proceeds of the policy in case of loss to be paid to builder or owner as their interest might appear, the owner’s failure to insure was insufficient to discharge the contractor’s surety; no loss having occurred which such insurance would have covered.” Schreiber v. Worm, 164 Ind. 7, is to the same effect. Inasmuch as no loss, occurred by fire during the progress of the work, the bondsmen sustained no damage by a failure on the part of the appellees to provide insurance as specified in the contract. As the bondsmen sustained no injury by reason of the breach of the contract in regard to insurance, they are not entitled to be relieved from liability for breaches of the contract on the part of the principal. The appellants are therefore not prejudiced by the rulings of the trial court on the question of insurance. 4. J. L. Tobin and J. E. Tobin were sureties on the bond of the contractors, Roland & Gray. They had a claim for materials furnished and incorporated in the building, for over eight hundred dollars, of which they claimed that there was a balance due of $343.74. The validity of this claim as a lien against the building was put in issue by the complaint and the answer of the Tobins. The court instructed the jury that the defendants, J. L. and J. E. Tobin, were not entitled to any lien for materials furnished the contractors. This instruction was correct. The Tobins, sureties on the bond of the contractors, if not paid for the materials which they furnished the contractors, must look to the contractors. They stand in their shoes, so far as discharging their obligations is concerned. One of the provisions of the bond which they signed was that the contractors should “carry out their contract and complete the same free of mechanics’ liens; and that they (the contractors) shall duly and promptly pay and discharge all indebtedness that may be incurred by the contractors.” It is obvious therefore that the Tobins had no claim for a lien on the building for materials furnished to the contractors and for which they failed to pay. They waived all right to a lien on the building for materials furnished by them by signing the contractors’ bond, requiring them to pay for such materials. 5. Various other instructions were given and refused covering different phases of the contract and the evidence adduced by the parties. We have examined these in view of the objections urged by the appellants to the rulings of the court concerning them, but we find no reversible error in any of them. If the appellees will, within fifteen days, remit the sum of $218.20, so as to cure the error of the court in giving the prayer of appellees numbered 16 and the error in the oral explanation thereof, as indicated, and thus remove all possibility of prejudice to the appellants by reason of such errors, the judgment will.be affirmed; otherwise it will be reversed and remanded for a new trial.