Kunz v. Boll

Dodge, J. Among the defenses interposed was that the owner and the principal contractor had modified the contract to the prejudice and consequent discharge of the sureties by paying large amounts of money thereon before the same was due according to its terms. This was supported by a showing that in the earlier stages of the work large amounts had been paid without any formal certificate of the architect, but the evidence is not so clear that they Were paid before the money was earned according to the provisions of the contract, and there might well be doubt whether they were effective to. release the sureties under the rule on the subject declared in Madison v. Am. S. E. Co. 118 Wis. 480, 95 N. W. 1097. It was made to appear conclusively, however, and indeed declared by the findings, that the building was not completed un [71] til September 20th, and that as early as June 9th there had been paid to the contractor the sum of $15,100, while by the express terms of the contract only $13,000 was to be paid to him prior to the final completion of the contract. The efficacy of substantial advance payments upon contracts to discharge sureties is too well settled by the authorities in this state to warrant discussion. The prejudicial effect thereof to the surety has been found both in the removal of the incentive to the contractor to'diligently press his work and from the diminution of the fund which the contract contemplates to remain in the owner’s hands and which may serve as a means of protecting the sureties from liability. Stephens v. Elver, 101 Wis. 392, 77 N. W. 737; Cowdery v. Hahn, 105 Wis. 455, 81 N. W. 882; Lowe v. Reddan, 123 Wis. 90, 93, 100 N. W. 1038. In the present ease it cannot be doubted that both the amount of the advanced payments and length of time in which they antedated the time when they should have been paid were material. In that respect they bear no resemblance whatever to the mere trifling variance from the contract presented in Stephens v. Elver, supra. For this reason we must hold that before the completion of the contract the sureties had been absolutely discharged from their liability, and no judgment can be had against them, which conclusion renders it unnecessary for us to consider the various other contentions. By the Court. — Judgment reversed on defendants’ appeal, and cause remanded with directions to dismiss the complaint; plaintiffs to take nothing on their appeal.