50 Ind. App. 377 | Ind. Ct. App. | 1912
— Appellant brought this action against appellee and Charles S. Pollard, to recover on a bond given by said Pollard as principal and appellee as surety to secure the faithful performance of a building contract.
The complaint is in two paragraphs, each of which alleges the execution of a building contract between appellant and Pollard, and also the bond, and embodies therein each of said writings.
The sufficiency of either of the paragraphs is not questioned, and their difference is unimportant for the purpose of determining the questions presented by this appeal.
The breaches of the bond charged, for which a recovery is sought, are the same in each paragraph.
It was agreed between appellant and appellee that Pollard is insolvent, and that there should be a dismissal as to him, without prejudicing appellant’s right to proceed against appellee.
“ARTICLE VI. The Contractor shall complete the several portions, and the whole of the work comprehended in this Agreement by and at the time or times hereinafter stated, towit: All work under this contract to he completed on or before September 18, 1907.”
The condition of the obligation of the bond contained the following proviso:' “Provided, however, that this bond is issued subject to the following conditions and provisions.” These conditions and provisions, important and controlling in the determination of the question presented, are as follows: “First: That no liability shall,attach to the Surety hereunder unless, in the event of any default on the part of the Principal in the performance of any of the terms, covenants or conditions of the said contract, the Obligee shall promptly and immediately upon knowledge thereof, and in any event not later than thirty days after the occurrence of said default, deliver to the Surety at its office in the city of Scranton, Pa., WTitten notice thereof with a statement of the principal facts showing such default and the date thereof; nor unless the said Obligee shall deliver written notice to the Surety at its office aforesaid before making to the Principal the final payment provided for under the contract herein referred to.
Second: That in case of such default on the part of the Principal the Surety shall have the right, if he so desire, to assume and complete or procure the completion of said contract.”
An answer was filed in two paragraphs, the first of which was addressed to the first paragraph of complaint, and the second to the second paragraph of complaint. Each of these paragraphs of answer admitted the execution of the bond in suit and its breaches, and, in addition thereto, set out the provisions of the contract, supra, which provided that the work should be done on or before September 18, 1907,
A demurrer was filed to each of these paragraphs, which was by the court overruled and exception saved to each ruling. Appellant refused.' to reply, and elected to stand on the court’s rulings on said demurrer, and there was judgment for appellee against appellant for costs. The rulings on said demurrers present the only error relied on by this appeal.
The entire question, therefore, depends on the effect to be given to the above provisions of the bond. Appellee contends that Pollard’s failure to complete the building on September 18, 1908, the date specified by the contract for said completion, was such a default as entitled it (appellee) to immediate notice, or at least notice not later than thirty days after the default, and that the failure to give such notice discharged it from all liability whatever as surety on said bond. Appellant on the other hand, contends that each paragraph of the complaint shows that as to the particular breaches of the contract, for which recovery of damages is asked, appellant served the proper notice on the surety company, and that therefore neither paragraph of the answer is
These principles of construction, as applied to contracts, the terms of which are ambiguous and uncertain, are based on reason and authority, and in cases where they have application are important and controlling, but they have no application to contracts the terms of which are certain, definite and unambiguous.
As directly opposed to the holding of these cases appellant cites the following cases: Monro v. National Surety Co. (1907), 47 Wash. 488, 92 Pac. 280; Heffeman v. United States Fidelity, etc., Co. (1905), 37 Wash. 977, 79 Pac. 1095; Van Buren County v. American Surety Co. (1908), 137 Iowa 490, 115 N. W. 24, 126 Am. St. 290.
In the case of Knight & Jillson Co. v. Castle (1909), 172 Ind. 97, 105, 109, 87 N. E. 976, 27 L. R. A. (N. S.) 573, our Supreme Court expressly disagreed with the reasoning of the Washington cases, and, in effect, adopted the rule laid down in the United States Fidelity, etc., Co. v. Rice, supra.
See this case and authorities there cited.
This court also in the ease of National Surety Co. v. Schneiderman (1911), 49 Ind. App. 139, 96 N. E. 955, recognized and followed the rule announced by the Supreme Court in said case of Knight & Jillson Co. v. Castle, supra.
Upon the authority of these cases this judgment must be affirmed.
Note. — Reported in 98 N. E. 373. See, also, under (1) 5 Cyc. 753; (2) 9 Cyc. 577; (3) 32 Cyc. 170. As to the rules for construing a written contract, see 56 Am. 0 618. As to the duty of a creditor to give the surety notice of the principal’s default, see 115 Am. St. 94.