Erickson v. Brandt

Vanderburgh, J. The plaintiff entered into a contract with defendant Brandt, August 30, 1890, for building, repairing, and finishing a house for plaintiff in the city of Minneapolis, according to plans and specifications therein referred to, to be completed November 1, 1890, and for which the plaintiff agreed to pay as follows: $275 when foundation is completed; $375 when house is finished outside; and $400 at final completion of the work, — together with a conveyance of two certain village lots therein described. On October 29, 1890, before the job was completed, the defendant Brandt, as principal, and defendants Peterson and Bergstrom, as sureties, entered into the indemnity bond set forth in the complaint, by them duly sealed, and conditioned as follows : “Whereas the said John Brandt, principal, has entered into a contract with said Iver Erickson for the alteration, construction, and remodeling of said Erickson’s house on 16th avenue, in the city of Minneapolis: Now, if the said John Brandt pay all bills for labor and materials performed and furnished in the alteration and construction of said house, and hold said Erickson and the lot on which said house is situated harmless from said bills, and said lot free from liens for labor and material, or for either or both, then this obligation to be void; otherwise, to remain in full force and effect.” At that date the first two installments mentioned in the contract had been paid to Brandt. The job was substantially completed about February 1, 1891, but, by reason of the failure of the defendant Brandt to pay for work done and material used in the building, the premises were incumbered with liens aggregating upwards of $1,500. [15] Suit was brought for the foreclosure of one of these lien claims, to which the other lienholders became parties, which suit the defendants herein were duly and seasonably notified by the plaintiff to defend, but they failed so to do, and, the lien having finally been established by the judgment of the court, plaintiff was obliged to settle and pay the same, and he now brings this action to recover the amount so paid, together with costs and counsel fees incurred and paid in the foreclosure action mentioned. 1. The defendants Peterson and Bergstrom raise the objection, in limine, that the bond of indemnity shows on its face that it was executed after the contract was made, and is without consideration to support it. It is a sufficient answer to this that the instrument is a covenant by which they have bound themselves under seal, which conclusively imports a consideration. McMillan v. Ames, 33 Minn. 257, (22 N. W. Rep. 612.) 2. It is further urged on behalf of the sureties that they are released by reason of alterations in the execution of the work under the contract, made at the instance of plaintiff by defendant Brandt, and without the consent of the sureties after the execution of the indemnity bond. It also appears that the last installment of $400 was paid before it became due, while there were claims to a large amount outstanding against the building for,which liens were filed. While it is perhaps doubtful whether, as respects this last point, the sureties can claim a release except pro tanto to the amount of the installment so improperly advanced, yet we think the charge of the court directing a verdict for the defendants, sureties on the bond, may be sustained on the ground of the departure from the plans and specifications referred to. The contract of the surety is stricti juris, and, if a departure from the contract to the extent made in the execution of this one can be disregarded or tolerated, where shall we set the limit? There were changes made in the construction, not extensive, it is true, but involving different materials and additional labor, which are included in the lien claims established against the building. And in some instances the amount of the increased cost is not clearly de [16] fined. We think the changes were correctly held to affect the obligation of the sureties. Of course, changes affecting the nature of the original contract are to be distinguished from new and independent agreements for extra work, or additions which are entirely separate and independent from the contract for which the sureties are bound; and this distinction has not been overlooked in our consideration of this case. 3. After the work was completed, the defendant Brandt demanded a conveyance of the lots which plaintiff agreed to convey to him as a part of the consideration therefor, which the plaintiff refused to give, upon the ground that the liens were not settled. The court was of the opinion, and so charged the jury, that it was the duty of the plaintiff to convey these lots to the defendant when the work was done, and his refusal to do so upon demand rendered him liable for the value thereof, which the defendant Brandt was entitled to set off against the claim of the plaintiff in this action. This we think was error. Plaintiff was entitled to hold on to these lots for his indemnity, and the defendant could only recover the same or damages for a refusal to convey after full performance on his part, and he had actually indemnified plaintiff for the amount of the liens. As plaintiff alleges his readiness and willingness to make such conveyance, and is not in default while he is entitled to hold the same as security for his advances, he could not be made liable for the value thereof in this action. 4. It was Brandt’s duty to defend the action brought to enforce the liens. He was the party primarily liable. The plaintiff should therefore be allowed to recover his expenses actually and reasonably incurred in making such defense. Order denying new trial affirmed as to the defendants Peterson and Bergstrom, and reversed as to the defendant Brandt. (Opinion published 55 N. W. Rep. 63.)