158 N.Y.S. 812 | N.Y. App. Div. | 1916
The plaintiff furnished a surety bond for the defendant’s performance of his building contract with the Elks Club. He paid in advance a year’s premium for the period intervening
The defendant upon appeal contends that the contract for suretyship does not permit the construction made by the plaintiff and that there is no evidence to be found in that contract or in the record that the defendant agreed to pay more than the sum paid, namely, the premium for the year intervening July 19,‘ 1911, and July 19, 1912. The contract under which the bond was issued provided that the defendant should “pay in advance on the 19th day of July the annual premiums or fees herein agreed upon, namely, three hundred forty-six and 44/100 dollars, and to indemnify the surety on said bond, its successors and assigns, against all loss, costs, damages, charge, liabilities, demands and expenses whatever, including attorney’s fees (resulting from any act, default or neglect of mine or from any accident), that said surety may sustain or incur or that may be asserted or claimed against said surety by reason of its having executed said bond or any continuation or renewal thereof.” And. the argument of the defendant is: “ Had the word £ annual ’ been omitted, this contract would have been clear —• and this bond would have cost Mr. Kelly [the defendant] the $346.44 which it is conceded has been paid,” and “ Granting to £ annual ’ its ultimate meaning, it is hardly elastic enough to mean, £ Each year during the period when said bond should be in force,’ as alleged in the complaint, or £ Each year until the final certificate of the Architect should be issued. ’ ” The contract for suretyship requires payment in advance on the 19th of July (without year) of the annual premium. The word “ annual ” may naturally mean a yearly payment. (Kearney v. Cruikshank, 117 N. Y. 99; 1 Words & Phrases Judicially Defined, 400; State ex rel. Curtis v. McCullough, 3 Nev. 202, 224.) Therefore, the contract may he read as requiring the payment on the 19 th day of July of the premium in advance yearly. The bond was for the faithful performance of the contract. In the defendant’s application of July 19, 1911, to the plaintiff for the bond, he stated that the work was to begin at once, to he completed “About one year from date,” and that the bond would continue in force
The bond provided: “Notwithstanding that said contract is hereby referred to, this bond is nevertheless issued subject to the following express conditions, which shall be conditions precedent to the right of the £ Owner ’ to recover hereunder. The ‘ Owner ’ shall keep, do and perform each and every, all and singular the matters and things set forth and specified in said contract, to be by the ‘ Owner ’ kept, done and performed exclusively at the times and in the manner as in said contract specified.” The defendant points to a provision in the contract that on the first day of each month the contractor should submit to the architect a statement of labor and materials furnished, and that by the 15th of said month the owners should pay to the contractor the amount payable as certified by the architect, less 10 per cent, and insists that as the evidence shows that this defendant was not paid monthly, the club had failed to perform, and by its breach of such condition precedent it had released the surety from further liability upon the bond.
So far as the facts in this case are concerned, the contention of the defendant must be that he was relieved from liability for the premiums simply because the club did not always make the payments to the contractor at the times prescribed in the building contract. For in this case there is no feature of a breach of the building contract followed by rescission thereof, or of any attempt of the surety to relieve itself of its obligation or even of any request for the cancellation thereof. On the con
‘£ Passing that question, I am of the opinion that it does not lie in ■ the mouth of the principal in this case to set up as a defense to an action for premiums on the bonds a defense of the surety to a possible action brought against it by the city on the bonds, which defense might not be interposed, and might not be successful if interposed.” But assume that the obligee had brought an action upon the bonds. So far as the facts are apparent, the surety could but show that in a few instances its principal was not paid installments when due by the terms of the bond and there was some delay in the final payment. It would appear, however, that the payments were made shortly after the appointed times, and that there had been no objection made to these short delays, much less any attempt to cancel the bond. It would not be apparent how such delays could have prejudiced the surety, and it would appear that this defer of a few payments was not in an attempt to vary the building contract, hut a mere indulgence like unto that held insufficient to affect the bond in Wilson v. Whitmore (92 Hun, 472; affd. on opinion below, sub nom. Wilson v. Webber, 157 N. Y. 693). (See, too, Grier v. Flitcraft, 57 N. J. Eq. 556; Guaranty Co. v. Pressed Brick Co., 191 U. S. 416; Pingrey Suretys. & Guar. [2d ed. Joyce] § 112e, and cases cited.) Moreover, to relieve the surety, . the extension of time of payment must rest upon a valid consideration, and must preclude the creditor from enforcing the debt during the period of extension. (Schwartz v. Smith, 143 App. Div. 300; affd. on opinion below, 207 N. Y. 714; Pingrey, supra, § 114.) When the contract itself is changed, it is not necessary to inquire whether the alteration works mischief to the surety (Paine v. Jones, 76 N. Y. 274), but, as I have said, this defer of payments, upon the facts in this case, must be regarded merely as an indulgence. In St. John’s College v. Ӕtna Indemnity Co. (201 N. Y. 342) it is said: “The rule of strict construction is liable at times to work a practical injustice, and it ought not to be extended beyond the reason for the rule,
The judgment and order are affirmed, with costs.
Carr, Stapleton and Mills, JJ., concurred; Putnam, J., not voting.
Judgment and order affirmed, with costs.