Reed v. McGregor

MITCHELL, J. This was an action on a bond executed by defendant McGregor, as principal, and the defendant Gaylord and another, as sureties, to the plaintiff, to indemnify her against mechanics’ liens on premises which McGregor conveyed to plaintiff, and upon which a building was in process of erection by Mm. To fully understand the situation, as well as the conditions of the bond, it is necessary to state that some time previously McGregor had entered into a contract with plaintiff’s husband, Ira >S. Eeed, for the sale of the same property. This is the contract referred to in the bond in suit. The material provisions of this contract were that McGregor agreed to sell' and convey the property to Eeed, and complete the building then in process of construction, for the consideration of $8,500. Of this amount $100 was paid in cash, $2,-900 was to be paid on completion of the building, when the deed was to be delivered, and $1,500 in a year from the date of the contract, for which Eeed was to give McGregor his note. The contract is silent as to the remaining $4,000, but it seems to be agreed on all hands that Eeed was to assume a mortgage on the premises to the Connecticut Mutual Life Insurance Company for that amount. Before the house was completed, McGregor, with the consent of Eeed, sold and conveyed the premises, subject to this $4,000 mortgage, by warranty deed, to the plaintiff, for the same consideration stipulated in the contract with her husband. It is evident that this conveyance was made and accepted as and in lieu of performance of the contract to convey to Eeed (which, to that extent, and only to that extent, was merged in the deed), and that it was the understanding and agreement between plaintiff and McGregor that the latter was to complete the building for her in accordance with his contract with Eeed. At this time plaintiff had not paid, but still retained in her hands, the $4,400 purchase money, no part of which was payable, according to the contract, until the house was completed, and $1,500 not until a year after the date of that contract. McGregor, however, needed the money sooner than it was due according to the contract. In consideration of plaintiff’s agreement to pay him the money sooner than it was due, and without reference to the terms of the [97] contract, McGregor gave her the bond in suit, to indemnify her against mechanics’ iiens on the property, growing out of the construction of the house referred to. This statement is all that need be said in reply to defendants’ point that there was no consideration for this bond. The trial court does not, in so many words, find that plaintiff paid to McGregor the full amount of the purchase money, but we construe the third finding as equivalent to that; and, notwithstanding counsel’s claim to the contrary, we think the uncontradicted evidence is to that effect. All that need be said in answer to the contention that the sureties on the bond are released because plaintiff paid the money to McGregor sooner than provided in the contract, and because she did. not retain it, and apply it in payment of the mechanics’ liens, is that the very purpose of giving the bond was to accelerate the time of payment of the purchase money; also that there was no agreement between plaintiff or her husband and McGregor, or between them and the sureties, that the purchase money should be so retained and applied; neither was there any evidence that any of it was paid over after any of the liens hád been filed, or after plaintiff knew that they would be filed. Pearl St. Society v. Imlay, 23 Conn. 10; Brandt, Suretyship, § 430. When the defendant Gaylord signed the bond as surety, the name of one Palmer was written in the body of the bond as cosurety, and the court finds that McGregor told Gaylord that Palmer would sign it, and that when Gaylord executed he believed and expected that Palmer would do so. Palmer never did sign the bond, but one Hush executed it as cosurety with Gaylord. It is claimed upon these facts that Gaylord is not liable on the bond. But the court also finds — and this is amply supported by the evidence — that there was no agreement between plaintiff and Gaylord that Palmer should sign the bond, nor was the bond delivered by Gaylord on any condition that it should not become operative until it was signed by Palmer. In fact the record shows that both Gaylord and Hush acknowledged the execution of the bond and justified on the same date, and before the same notary; and the evidence is that Gaylord himself delivered the bond to plaintiff’s agent. The point is not well taken. Whitaker v. Richards, 134 Pa. St. 191, 19 Atl. 501; Guild v. Thomas, 54 Ala. 414, 25 Am. Rep. 703-710, note. [98] It is also contended that there was no sufficient evidence of the existence of any mechanics’ liens on the premises, or that plaintiff has ever paid them off. The evidence is plenary that plaintiff has paid off judgments for mechanics’ liens on the property to the full amount of her recovery.' One of these lien claimants brought suit to enforce his lien, in which he made plaintiff, McGregor, and all the other lien claimants parties defendant. When this suit was brought, plaintiff, by her husband (who was her agent), notified Gaylord of it, whereupon Gaylord promised to attend to it, and informed plaintiff’s agent that he need not give it any attention. He then interposed an answer for plaintiff, and appeared and acted on the trial as attorney for both plaintiff and McGregor. Upon this state of facts the judgments in the action in favor of the lien claimants are conclusive against Gaylord. Hersey v. Long, 30 Minn. 114, 14 N. W. 508; Mackey v. Fisher, 36 Minn. 347, 31 N. W. 363. But this is not all. In order to establish her tjause of action against the cosurety Hush, the plaintiff introduced original evidence of all these liens. So far as we can discover, this evidence was sufficient to establish plaintiff’s cause of action, even if the judgments in the lien suit had not been introduced. Counsel makes the point that it appears from the findings of the court that one of the lien claimants did not file'his statement in time. But this is manifestly a clerical error of the judge in stating that the last item of material was furnished on the 13th of the month, instead of the 30th. The undisputed evidence is that it was on the 30th. This disposes of all there is of any substance in counsel’s numerous assignments of •error. Order affirmed.