Cowdery v. Hahn

Winsnow, J. The question is, Did Cowdery, by paying the contractors the entire amount of the contract price of the building before it was due, materially alter the contract so as to discharge the sureties? Upon principle and authority, this question must be answered in the affirmative. In. [458] Stephens v. Elver, 101 Wis. 392, tbe principle was recognized that the -surety, under such circumstances, is discharged, if the principal is paid faster than the contract provides, but that the premature payment must be substantial in amount, and not a mere trifling deviation from the contract. In the contract before us, only eighty-five per cent, of the materials furnished and work done was to be paid during the progress of the work, and the remainder after the contract was fulfilled. The entire contract price was paid by Oowdery at a tiipe when $275 worth of the work (which must be considered a substantial part thereof) was still unfinished, to the knowledge of Oowdery. Not only was the $275 not then due, but fifteen per cent, of the remainder of ■the contract price had not then become due, so that in all nearly $800 was paid upon the contract long before it was ■ due. The payment of this sum to the contractor before it was due must be regarded as amounting to a substantial modi.fication of the contract by the principals without the consent of the sureties, and hence, upon familiar principles, relieves them from liability. See authorities cited in Stephens v. Elver, supra. The sureties were thus, without •■their knowledge or consent, deprived of a substantial inducement which the principals would otherwise have had to fulfill their contract to the letter. By the Oourt.— Judgment reversed, and action remanded with direction to render judgment on the verdict for the ■defendants.