McClure v. Freeborn Engineering & Construction Co.

The opinion of the court was delivered by Porter, J.: The defendant, a surety company, executed its bond to indemnify plaintiff in the event a construction company failed to complete the erection of a cement plant on or before July 1, 1911. On the failure of the company to complete the building plaintiff brought suit on the bond and recovered judgment. The bond contained the following provision: “That in the event of default on the part of said principal a written notice of such default shall be delivered to the Surety at its office in the city of Cleveland, Ohio, said notice to be deposited within the mails within ten days after such obligees, or their representatives shall learn of such default.” The defendant’s appeal is based upon one contention, which is that the evidence conclusively shows the failure of plaintiff to give the required notice. On February 27, 1911, the con [696] struction company wrote plaintiff asking for. an extension of time for completing the work, and in the letter said: “It is very probable that we may not have the plant entirely completed by the first day of July.” Plaintiff replied by letter that he Would prefer not to grant the extension until further inquiry in the matter and stating that the bond was good until July 1, 1911. On March 4 the construction company wrote him again, asking a definite reply to their request; and here the correspondence ended. The plaintiff testified that he did not learn until August 16, the same date he notified defendant, that the plant was not completed by July 1. The defendant’s demurrer to the evidence was overruled. The defendant elected to stand upon the demurrer, and judgment went in plaintiff’s favor. If the court believed plaintiff’s testimony that he first learned of the default August 16, the letter of that date notifying the defendant was all that was required under the provisions of the contract. Besides, the defendant has neither alleged nor attempted to show that it suffered any loss by failure to receive notice earlier. “Actual damage resulting from failure to give notice must be pleaded and proved as a defense” (Republic County v. Guaranty Co., 96 Kan. 255, 258, 150 Pac. 590) in an action against a surety company engaged in the business of furnishing bonds of this character for compensation. Judgment affirmed.