Southwestern Surety Insurance v. Terry

Kirby, J„ (after stating the facts). In Snodgrass v. Shader, 113 Ark. 429, the law relating to the discharge of a surety on account of material alterations in the terms of the contract made without his consent, was declared as follows: “The courts have long held that any material alteration in the terms of a contract, whereby a surety is bound, discharges the surety as he has not consented to the change, and this is so, even if the alteration be for the benefit of the surety; for, although the principals may change their contract to suit their pleasure or convenience, they can not bind the surety thereto, without his consent, and, as the new contract abrogates the old, the surety is discharged from all liability unless he has con-. sented to the alteration. O’Neal v. Kelley, 65 Ark. 550; Singer Mfg. Co. v. Boyette, 74 Ark. 601; 1 Brandt on Suretyship, section 427; Hubbard v. Reilly, 98 N. E. 886; Warren v. Lyons, 9 L. R. A. 353; Stern v. Sawyer, 61 Atl. 36; Miller v. Stewart, 9 Wheaton, 702; Penn v. Collins, 5 Rob. (La.) 213. In Berman v. Shelby, 93 Ark. 479, the court said: “For a surety will be discharged by any material and unauthorized alteration of his contract, and it is immaterial that the principal assured the obligee that the alteration would not affect the original contract, or that he failed to carry out the contract as altered.” The bond of the surety herein permitted any alterations and additions to the contract not exceeding in extra cost the sum of $15,000, and, of course, the surety would be bound to the performance of it so long as the alterations and changes made did not exceed said sum, having consented in advance thereto. It is conceded that alterations and changes within the meaning of the contract were made in the said sum of $14,'257.97, allowed by the architect and owners for extras. It is contended by appellant that the construction of the arcade in the front of the first floor of the building instead of the straight show windows and of the wooden floor in the basement instead of the cement, as provided in the contract, were alterations within the meaning of the surety’s bond and increased the extra cost of alterations beyond the said sum of $15,000 consented to and released it from liability thereon,. Unquestionably the arcade and the wooden basement floor were not provided for, nor eontemplated in the making of the contract and undeniably were both constructed by the contractor in the erection of the building at the extra cost specified, and although the change was made at the instance of the lessee, who agreed to pay the extra cost thereof, it was done with the assent of the owner, and if it was an alteration within the meaning of the bond, which, with the others, raised the extra cost in excess of the ¡said sum of $15,000, released the surety. The appellees insist that neither constituted an alteration within the meaning of the contract, but in effect that both were constructed under independent and additional contracts within the doctrine announced by many cases of other jurisdictions cited, and our own case of Hinton v. Stanton, 112 Ark. 207. In this case, the court said: “The test of materiality of the change is this, ‘Could the owner have made a separate contract for the porte cochere and could that contract have been performed without changing the contract which Norris had made, and upon which appellee was surety? If this could have been done, then the contract for the porte cochere is an additional contract and not a change in the original contract.’ ” In Fullerton Lumber Co. v. Gates, 89 Mo. Appeals 204, the court said: “Without pretending to submit a rule applicable to all cases, we will say that where the different matter does not consist of a change of that provided for or contemplated by the contract, but is something additional, and not included in the contract, then it is an independent transaction.” The undisputed testimony shows that the arcade could not be constructed independently by another contractor during the progress of the work of construction of the building, nor the building completed without the construction either of the straight show windows specified or the substituted arcade consented to, and also that the putting in of the wood or plank floor instead of cement, in the basement, was a change or alteration of the floor construction required by the contract, and although it was shown the wooden floor could have been constructed by another contractor after the cement floor was finished in accordance with the specifications, it could not have been done without tearing up and reconstructing the floor, and the contract called for a floor constructed in the 'basement by the contractor, and could not have been performed without the construction of the floor required by the specifications or one of some other kind agreed upon. The change from-cement to wood was necessarily, therefore, an alteration within the meaning of the contract permitting alterations not to exceed in cost the sum of $15,-000, as was likewise the building of the show windows in arcade style rather than with straight front effect. Neuwirth v. Moydell, 174 S. W. (Mo. Ap.) 207. In the court’s view of the case as already expressed, it becomes unnecessary to determine the several other questions raised. Said material alterations not having been consented to by the surety, discharged it, and the judgment is accordingly reversed and the cause dismissed.