Hax-Smith Furniture Co. v. Toll

JOHNSON, J. Action on a bond executed by defendants Sproul, as principal, and Toll, as surety, to secure the faithful performance by the former of a contract made by him with plaintiff for the erection of a business building on premises owned by plaintiff in St. Joseph. A jury was waived by the parties. The trial resulted in a judgment for plaintiff and both defendants appealed. The bond executed December 30, 1905, was in the penal sum of $25,000, and expressed the following obligation: “The condition of the above obligation is such that whereas the said contractor (defendant Sproul) has entered into a contract with the said owner (plaintiff) to do certain work and furnish certain materials for the said owner: Now, therefore, if the said contractor shall well and truly perform said work and shall furnish all material in accordance with — 407 — drawings, specifications and contract . . . and shall protect defendant and hold harmless the said owner against any and all liens or claims of any kind that may be filed by laborers, mechanics or materialmen, within the time specified by law after the date of the completion of this contract, then this obligation shall be void; otherwise to remain in full force and effect.” The parties stipulated in the instrument that “the said owner and the said contractor may from time to time make additions to, omissions from and modifications in said contract without notice or consulting the sureties and without prejudice to or invalidating this bond.” It is alleged in the petition , and the proof shows that defendants failed to protect the property against mechanics’ liens and that plaintiff was compelled to pay the demands of a number of lien claimants in order to prevent its property from being sold under executions. The court, after deducting the credits and offsets found the aggregate amount of plaintiff’s loss on account of such outlays to be $8,417, and assessed plaintiff’s damages at that sum in the judgment entered. Defendant Toll presents the special defense, duly pleaded in his answer, “that without the knowledge or consent of the surety, certain changes in the contract were made by the owner and contractor which provided for additional work and materials the price of which was not agreed to in writing before said work was begun or said materials were furnished.” This defense is founded on the specifications (by reference made part of the contract between the owner and contractor) which provided “should the owner at any time during the progress of the work ret] nest any alterations, deviations, additions or omissions from the contract, he shall be at liberty to do so and the same shall in no way affect or make void this contract or bond, but will be added to or deducted from the amount of the contract as the case may be, by a fair and reasonable valuation. The — 408 — price to be agreed upon in writing before being put into execution, and if any dispute shall arise regarding the valuation, the same shall be decided by arbitration.” To escape liability on the bond, the surety relies here on two changes in the plans and specifications which were made on oral agreement of the owner and contractor, after the execution of the contract and bond and without notice to the surety. First, the trenches for the footings of the foundations and walls and the concrete footings were made deeper and wider than specified, resulting in extra expense of $593, which the owner paid the contractor, and, second, the form of the building was altered slightly. The plans and specifications describe a building four stories high, 263 feet long, 120 feet wide, and in the form of a right-angled parallelogram. When the work was begun, it was found that the street on which the building would front slightly varied from a true course, and if built as designed, one of the front corners of the building would be on the street line and the other four or five feet therefrom. It was on the suggestion of the contractor, reluctantly adopted by the owner, that the form of the building was changed to that of a rhomboid, in order that the front wall might be parallel with the street. If we were sitting as a tiler of fact, we would find from the evidence that the contractor offered to make the alteration without extra charge, but since the trial court found otherwise by allowing the contractor a credit of $254.41, as the extra cost to him of the alteration and the finding is supported by substantial evidence we shall treat it as we would the verdict of a jury. The deepening and widening of the foundation was made necessary by the nature of the soil encountered in the excavation of the trenches. This necessity was recognized by the owner, architect and contractor, and the change. — 409 — was agreed to as a matter of course and the owner agreed to compensate the contractor for making it. Shortly after the work was begun, the contractor, prompted hy his subcontractor, requested that the owner put in writing the agreement to pay for the extra work, whereupon plaintiff wrote a letter addressed to the architect in which he agreed to pay $6 per yard for the extra concrete and twenty-five cents per yard for the extra grading. Counsel for defendant Toll argue that since the provision of the contract to which we have referred required the price “to be agreed upon in writing before being put into execution” this letter, written while the work was in progress, was not a compliance with that requirement under the strict rules of construction which obtain in favor of a surety. We shall concede only for the purposes of argument the soundness of this position and, dismissing this letter from consideration, shall treat the feature of the case now before us from the standpoint that with respect to the alterations of the plans and specifications, the price of the extra work in neither instance was agreed on in writing. This omission should not be held to have released the surety from the obligation of the bond for the reason that under no reasonable construction of the contract between the owner and surety may it be said that' the alterations in question belonged to the class which the contract contemplated should be made only on a written contract between the owner and contractor fixing the price of the extra work. Should we concede that the stipulation in the specifications is inconsistent with that in the bond and that they should be construed together as parts of one contract, it would avail defendants nothing. Clearly, the intention expressed in the provision in the specifications was to provide a method by which the owner might compel the contractor to make such changes in the plans and specifica — 410 — tions as lie might desire during the progress of the building and had no purpose of restricting the freedom of the owner and contractor to make changes in the plans and specifications by voluntary agreement. The language “should the owner at any time during the progress of the work request any alterations . . . he shall be at liberty to do so,” cannot well be reconciled to any other interpretation, and the idea that the subject of the provision was possible compulsory changes is borne out by the final clause which provides for submitting the question of price to arbitration in instances where the parties might be unable to come to an agreement respecting it. The changes under consideration in no sense were compulsory, but were made by the owner and contractor voluntarily. They did not fall within the class designated in the specifications and were not controlled by its provisions. [Bagwell v. Surety Co., 102 Mo. App. 707.] They did belong to a class included in the stipulation in the bond. That stipulation covered not only changes compelled by the owner, but also those which might be agreed on by the owner and contractor. It did not place any restrictions on the right of the parties to make such changes, nor prescribe any method by Avhich they were to be made. Within the legitimate scope of the proposed improvement, the parties were accorded complete freedom to contract as they pleased and the utmost effect that could be given the provision in the specifications (on the theory that it should be read into the bond) is that the method it prescribed applied solely to alterations compelled by the owner and not to those made by voluntary agreement. To the extent, at least, that the bond enlarged the right of the parties to make alterations over that provided in the contract between the OAvner and contractor, its terms must control and in that field are exclusive of the contract and conclusive of the scope of the right and the methods by which — 411 — it may be exercised. [Bagwell v. Surety Co., supra.] The surety will not be released on the ground that the alterations were made in an unauthorized manner. Both defendants tender in their answers, and argue here, a defense based on alleged false and fraudulent representations made by plaintiff to defendant contractor by which he was induced to reduce .materially his bid beloAv what it would have been had he not been deceived by the representations. The declarations of law given show quite clearly that the court found the facts against defendants on this issue, and we do not see how a different conclusion could have been draAvn from the evidence. It is enough that AAre find in the record substantial evidence supporting the finding. We shall not weigh the evidence nor do we deem it necessary to discuss its details pro and con. Complaint is made of the following declaration of law given at the instance of plaintiff: “The contract between plaintiff and Sproul Avas executed on the 28th day of December, 1905, before the bond in suit Avhich was executed on the 30th day of said December. As betAveen piaintiff and Toll, their stipulation written in said bond modified, with the consent of Sproul, the stipulation in the building contract as far as any inconsistency may exist between them and the stipulation in the bond controls so far as defendant Toll is concerned.” The proposition of law thus declared is sound but, as Ave have indicated, its employment was not necessary to a proper disposition of the case, since, on the hypothesis that bond and contract are consistent AAre have found that the surety should not be released. The judgment is affirmed. All concur.