Village of Chester v. Leonard

Baldwin, J. The complaint was adjudged insufficient on demurrer, for want of certain amendments; whereupon the plaintiff voluntarily amended it by inserting them. There is authority for the position that this waived any exceptions that could otherwise have been taken to the ruling on the demurrer, and that if the plaintiff in any such case is unwilling to assume the burden of proving what the amendment would introduce into the complaint, he should stand by his original pleading and seek a remedy by appealing from the final judgment which would then be rendered on the issues of law. United States v. Boyd, 5 How. 29, 51; Birnbaum v. Crowninshield, 137 Mass. 177; 1 Ency. of Pl. and Pr. p. 624; 6 id. p. 359; Brown v. Saratoga Railroad Co., 18 N. Y. 495. It is, however, unnecessary to express an opinion upon this point in the present case, as the defense which was made out upon the trial would have been equally a bar to the plaintiff’s recovery, under the original allegations in the complaint. Had the demurrer been overruled, as the plaintiff now claims that it should have been, the defendants would have had the right to plead over. General Statutes, §1014. We think it fair to assume that they would have availed themselves of this privilege, instead of allowing final judgment to go against them on the pleadings as they stood, and are therefore of opinion that even if there were error in the ruling complained of, the plaintiff was not injuriously affected by it, since if it had,not changed its pleading, the defendants would have changed theirs, and the same result must, in either event, have been ultimately reached. The parties to the construction contract of October 17th, 1892, were the village of Chester and Francis Leonard. In behalf of the village it was executed by certain individuals who had no authority to speak for it. They were, however, de facto public officers. There was a law under which they assumed to act, and the only defect in their authority arose from their omission to file the necessary bonds and take the prescribed oath of office. This defect was remedied during the ensuing month, and they thereby became the de jure — 505 — Board of Water Commissioners of the village. The answer set up their want of authority to execute the contract, and to this it was replied that the village had “ authorized, accepted and approved” their action in its behalf. One for whom another has assumed to act may accept and approve what has been done in his behalf, though he never authorized it. The averments in the reply as to acceptance and approval not having been denied, were admitted to be true. Practice Book, p. 16, § 4. They stated a ratification, which was equivalent to a prior authority. It may be.true that under the laws of New York the plaintiff could not, on October 17th, 1892, have authorized the execution of the contract in its behalf by a mere de facto board of water commissioners. But on and after November 28th, 1892, it could have authorized the execution of such a contract by what was then a de jure board of water commissioners; and such authority would properly proceed from that board itself, which for that purpose was, in effect, the village. The ratification pleaded would therefore be sufficient if it was an acceptance and approval by the Board of Water Commissioners, when duly organized, of what they had assumed to do before they were duly organized. That such was the legal effect of their course of action, as set out in the finding of the Superior Court, is manifest. The bond in suit, which bears even date with the construction contract, is one of the exhibits described in the complaint, and was made a part of it by express reference. It runs in favor of the village, and recites that Francis Leonard had entered into this contract with it through its Board of Water Commissioners. This estopped the defendants from denying the authority of the board to represent the village, both as to the contract and as to what was done in execution of it. Washington County Ins. Co. v. Colton, 26 Conn. 42, 50. The estoppel was sufficiently pleaded. The bond was, in effect, set out in the complaint, and it appeared upon its face that its legal operation was necessarily such as to preclude the obligors from contesting either the proper execution of — 506 — the contract, or the right of the board to accept the security which they offered to give the village for its due fulfillment. The fact that the board never formally voted to accept the bond, is immaterial. They took it into their possession to “hold subject to further action.” That was a sufficient delivery, and this suit supplies the want of further action. The sureties on the bond were not entitled to express notice of the acceptance of their obligation, for it was absolute in terms, executed contemporaneously with the construction contract, and part of the same transaction. White v. Reed, 15 Conn. 457, 463. This contract provided for monthly payments, during the progress of the work, of 85 per cent of the amount due for the preceding month, as that might be estimated approximately by the village engineer; the balance to be retained as security for the faithful performance of the contractor’s obligations until the time of the final estimate and settlement; nor was it then to be paid over until the work had been publicly tested and accepted in writing, nor unless within twenty days from such acceptance Leonard gave a bond with sureties to keep the works in repair, at his own cost, for one year. Payments largely in excess of 85 per cent of the contract prices for work done were, however, made both before and after April 19th, 1893, and in most cases without any estimate of the engineer. On April 19th, 1893, Francis Leonard, after stating to the Board of Water Commissioners that he must abandon the contract, made, by agreement with the board, its treasurer his agent to receive any moneys thereafter to become due under the contract, and therefrom to pay his employees and those from whom materials were purchased. After this, substantially all moneys due under the contract were paid out by the treasurer of the board in the manner thus provided. The final payment due to the contractor was made without requiring any bond for keeping the works in repair, the giving of any such security being waived by the village. Material changes were also made, by order of the engineer, from time to time, in the details of the plan on which the construction contract — 507 — was based. A line of pipes to be laid in a highway for a distance of over 2,500 feet was transferred to private property. Another line was changed from one street'to another, and considerably lengthened. The position of another line was shifted for a distance of over a mile, so as to be at some points 200 feet from that marked on the original plans. The dimensions and level of some of the pipes were also varied, so as to call for additional expense on the part of the contractor. None of these changes were necessary to the proper fulfillment of the work, and none were made known to the sureties on the bond; nor did they know of or authorize the variations adopted in the manner of making payment under the contract, or of disbursing the moneys paid. So far as concerns the changes in the line, site, level, or dimensions of water pipes, they were all warranted by the provisions in the contract that “ the quantities of the work to be done,” as specified, were approximate ouly, and could be increased or diminished by the Board of Water Commissioners, and that the engineer could make such changes in the “ forms, dimensions, and alignment of the work ” as might in his opinion and that of the Board of Water Commissioners be necessary for its proper fulfillment. It was for them and not for the courts to determine whether the changes ordered •were in fact necessary. Sureties for the performance of a contract so framed must be presumed to contemplate the making of such changes ; and as the .defendants did not stipulate for any right to participate in determining whether they should be made, there was no occasion to notify anyone but the principal contractor of the fact that they had been ordered. It is contended by the defendants that “alignment ” means simply an “ adjusting to a line,” and that a change in alignment cannot be construed to cover a change of line. The word in question carries a wider meaning than that thus assigned to it. It signifies not only the act of adjusting to a line, but the state of being so adjusted, and in terms of engineering is used to denote the ground plan of a road or other work as distinguished from its profile. Webster’s International Diet. — 508 — But the variations in the mode of payment were substantial, and no power to make them had been reserved. The sureties 011-the bond, as well as the village, had an interest in its keeping control of the monthly balances of 15 per cent of the engineer’s estimates, until the job was completed; for they would constitute a fund to meet any claims for damages from breach of contract that might then be made. They had an interest also of another kind in having the monthly payments graded by such monthly estimates. It served to keep the contractor up to his work; while to pay him without any estimates might well lead to mistakes and delay, if not to his drawing money faster than he earned it. The arrangement by which he constituted the treasurer of the board his financial agent was one that could not properly be made, without consulting the sureties. The treasurer was less an agent for the contractor than a representative of the village. His authority derived from Leonard was given to him because of his public office, and his first duty continued to be that which he owed to the plaintiff. It might call upon him to act adversely to the interests of his new principal under the contract; and at best put him in the position of one serving two masters. The waiver of the bond for keeping the works in repair for a year after their acceptance withdrew also a security on which the sureties had a right to rely; for if the job were so poorly done as to require repairs within the year, and the village should claim that this was due to a failure to observe the conditions of the contract, they might have been held for the resulting damages, and in that event could have claimed to be subrogated to the benefit of the second bond. By these material departures from the contract, respecting the mode of determining, making and applying the payments, for which it stipulated, the sureties were released. Their obligations could not be thus extended without their consent, and the attempt to do it destroyed the ground of their liability by substituting a new contract for that to which their bond referred. Rowan v. Sharps’ Rifle Mfg. Co., 33 Conn. 1, 23. When Francis Leonard stated to the Board of Water Com — 509 — missioners that he must abandon the contract, and submitted to it the proposition that he should make its treasurer his agent, two courses only were open to it for the preservation of its legal rights. It might reject the proposition and'look to the sureties ; or it might accept it, provided their consent were asked and obtained. Neither of these things was done. Instead, the board, without consulting the sureties, agreed with Leonard that notwithstanding his confessed inability to carry through the job on his own credit, he might proceed in its execution, in consideration of his making its treasurer his financial agent. The contract provided that, should Leonard fail to pay any wages or other account that might become due from him in its execution, the board might pay them out of any funds due to him, but in no case without the written approval of the engineer. After the arrangement of April 19th, the wages of employees were paid by order of the board upon the recommendation of its treasurer, and without any certificate or estimate from the engineer. It may be that all this worked no injury to the sureties ; but whether it did or not, the result is the same. Any variation of the contract to which they did not assent was fatal, notwithstanding it might operate directly for their benefit. Miller v. Stewart, 9 Wheat. 680; Board of Com'rs v. Branham, 57 Fed. Rep. 179. This defense was sufficiently pleaded in the answer, and the facts upon which it arose were substantially admitted by the reply. The plaintiff contends that it is fully met by the provision in the contract that “ any cash payments made before the completion of the work shall in no way affect or alter the conditions of this contract.” This manifestly referred to the accompanying conditions as to the responsibility of the contractor to the village for the character of the work done, and the continuance of such responsibility until lie should be released by the formal action of the board, with the concurrence of the engineer. It did not, as against the sureties, justify a material variation in the mode of payment, or in — 510 — the manner in which the moneys, when paid, were to be disbursed. It is also claimed that the sureties had constructive notice from the public records, .including those of the Board of Water Commissioners, of all or most of the various departures from the construction contract. Such is not the law. A surety is not bound to be on the watch for variations which may be made in the obligations of his principal. But even had actual notice of whatever was done been promptly given to the sureties on this bond, it would have been unavailing to enlarge their liability. That could result only from knowledge and acquiescence both. The letter of the engineer, written in February, 1893, to the Board of Water Commissioners, in which, after stating that Leonard had requested an estimate, and is apparently entitled to one, he recommends a payment of a lump sum of $1,000, or $1,200, as, in his opinion, the work performed was certainty worth that amount, was property excluded. It was not an estimate such as the contract required, and did not justify, as against the sureties, the payment of $1,000, made on the strength of it. Even could it be considered an estimate that the work done was worth $1,000, not more than 85 per cent of that amount could have been property paid on it. It is unnecessary to consider the rulings under which certain evidence offered to show that the plaintiff had suffered damage by breach of the construction contract, was excluded, as the defense of the sureties is an absolute one, as respects the entire cause of action. The plaintiff also claimed in the trial court, and claims here, that what took place on April 19th amounted to an abandonment of the contract by Francis Leonard, and the appointment by the board of its treasurer as the agent of the village to complete the job, as being the most economical mode of accomplishing that object; the latter paying out, as Leonard’s agent, only what the village owed to him, and making all other disbursements as the treasurer of the board. This state of facts was set up in. the plaintiff’s pleadings, — 511 — but denied by the answer, in which it was averred that what was really done was to substitute, between Leonard and the village, a new agreement for the provisions of the original contract. The issues thus raised were found for the defendants, and the facts set out in the special finding fully support that conclusion. The only remaining ground of appeal which has sufficient merit to call for its discussion, is that judgment should have been rendered against Francis Leonard, the principal in the bond, even if it went in favor of the surviving surety, who was the other defendant. This'is a point not raised in the trial court, and resting on General Statutes, § 1108, which permits a judgment against a part only of the defendants in such an action, but does not require it. The plaintiff made thirteen claims of law on the trial, and the only one which could by possibility cover or relate to that now presented is the last in order, which reads thus: “ That the defendant, Francis Leonard, was a surety on the bond, and he knew all the facts relative to any change made relative to the arrangement of April 19th, and regarding the extras, and that all of the defendants were bound by the constructive notice which they had of the matters of record of the Board of Water Commissioners, of the village records, and of the records of Orange County.” This language, far from being such as to direct the attention of the Superior Court to any several liability of Francis Leonard, as principal in bond, was rather calculated to divert attention from it, since it describes him as a surety, and charges all the defendants with constructive notice of the doings of the board. Under these circumstances, there was no error in not rendering a judgment for which the plaintiff did not ask, and which, in view of the manner in which its pleadings were framed, it might well have been assumed that it did not desire. There is no error in the judgment appealed from. ■ In this opinion the other judges concurred.