190 Iowa 25 | Iowa | 1920
The decree entered below applied the fund upon the labor and material claims, and entered personal judgment against the surety company for the balance of such claims remaining unpaid. The plaintiff alone has appealed. The surety company served notice of appeal too late. It is in court, therefore, as an appellee, and has filed a brief in support of the decree, in so far as the same applies the fund in the hands of the district upon the labor and material claims. It is apparent that the effect of that portion of the decree is to reduce the liability of the surety company pro tanto.
II. The order sued on was as follows;
“Mason City, Iowa, Nov. 9, 1916.
“Board of Education, Independent. District of Mason City, la.,
“Mason City, la.
‘ ‘ Gentlemen:
“Please pay to the City National Bank of Mason City all moneys by estimates as they become due in the erection of the new high school building at Mason City, la. These estimates in the form of certificates will be delivered to you, either by me or by the said named bank after being issued by the architect or
“This order is given to the said bank for the purpose of covering funds which they have, or may advance to me from time to time in the payment of bills for material or labor arising out of, and on account of the construction of the new high school building for which I have the contract.
“This order is to remain in full force and effect until canceled by the above-named bank in conjunction with myself.
“H. F. Jones.”
This order was filed with the Independent School District. It was never formally accepted by the Independent School District; nor, on the other hand, was it affirmatively repudiated. Sums of money were paid pursuant thereto, from time to time, during the period of a year or more, and while the building contract was in course of performance. Under the building contract, payments were to be made, from time to time, up to 85 per cent of the estimates of the architect, and 15 per cent was at all times to be retained until the full completion of the work. The unpaid balance represents the reserve 15 per cent, and amounts to approximately $9,500.
4 4 The contractor shall and will provide all the materials and perform all the work for the erection of said building, as shown on the drawings and described in the specifications prepared by
The specifications referred to above contained the following:
“The contractor to whom this work is awarded will be required to enter into contract for same and give acceptable surety company bond for one half the contract price, or personal bond for contract price, subject to the approval of the architects and owner, guaranteeing the faithful performance of said contract. Bond in all cases to be given on the following form. ’ ’
The form of the bond was set forth complete in the specifications, leaving blank spaces therein for the names of the parties and for the amount of the bond. A bond was delivered to the district, duly executed upon this form-by the contractor and his surety. Such bond so executed contained the following:
“Whereas, H. F. Jones, contractor, has contracted with the Board of Education of Mason City, Iowa, to* execute, construct, complete and pay for all labor and material, whether by subcontract or otherwise, ’ ’ etc.
The foregoing was in literal conformity to the form set forth in the specifications, with the name “H. F. Jones” inserted in the blank space. The conditions of the bond were as follows:
“Now the conditions of this obligation are, that if the said H. F. Jones, contractor, shall duly perform said contract and fulfill all the several stipulations, then this obligation is to be. void, but if otherwise the same shall be and remain in full force and virtue.”
The “contract,” the “specifications,” and the form of the bond were all drawn by the architect, and were all in existence and before the parties at the time of the signing between the district and the contractor. The specifications were included in the contract by express reference, and the obligations of the required bond were included in full in the specifications. We see no room to doubt that the three papers constituted the contract. They all related to the same subject-matter and to each other. They all aimed at the common purpose. To eliminate any of them would leave the contract incomplete. Though the Independent School District signed the “contract” only, its signature bound it to nothing, unless the conditions of the specifications were acceded to, and until the bond was given in the
As already indicated, this conclusion is quite decisive of the argument between the parties. The promise of Jones to pay gave to the labor and materialmen contractual rights which they could enforce against Jones and against his surety, even though they had failed to file their claims within 30 days, as provided by Code Section 3102. The case is quite covered in this respect by our previous decisions. Independent School Dist. v. Mardis, 106 Iowa 295; City of Boone v. Cary, 162 Iowa. 695; Maryland Cas. Co. v. Des Moines City Evangelical Union, 184 Iowa 246.
IV. Does the fact that these claimants are entitled to enforce their claims against Jones personally and against his surety operate to prevent the plaintiff from enforcing its claim as against the school district? The school district did not, in terms, by its contract bind itself to pay these claims. Nevertheless, it had a right to contract for the benefit of such claimants, and. to insist upon the performance of said condition. The ‘ ‘ contract” contained the following proviso:
“Payment to be made as the progress of the work may justify, less 15 per cent which will be retained at all times until
“The final payment shall be made within 10 days after the' completion of the work included in this contract, and all pay* ments shall be due when certificates for the same are issued.”
It will be noted that, by the first of the foregoing provisions, it is provided that the 15 per cent “will be retained at all times until all the requirements, plans, specifications and this contract are complied with.” Under the second provision, it is provided that payment shall be made within 10 days after the completion of the work included in the “contract.”
It is the contention of the appellant that, at the expiration of ten days after the completion of the work, its right became fully matured, and that it was entitled, as a matter of law, to demand the balance on hand. This contention rather ignores the first provision quoted. The right of appellant to the fund was precisely what the right of Jones would have been, in the absence of assignment. “All the requirements” of the contract had not been complied with by a mere completion of the work. The one proviso is no more imperative than the other. They are capable of a harmonious construction together. Undoubtedly, they involve some repetition. It is said by the appellee that the first provision was written into the contract in typewriting, whereas the second was a part of a printed form. It is urged, therefore, that the typewritten portion should control the printed portion of the contract. But the fact thus relied on as to the condition of the contract is denied by the appellant, and we find nothing in the record to support the claim of appellee. We see no difficulty, however, in finding a harmonious construction of both of these provisions. Each of them sets up a bar against the contractor. Neither bar could be ignored by him in making a demand for the balance due. He could not demand paymentof the balance until the work was completed, and until 10 days thereafter. He could not demand payment until all other requirements had been complied with. One of these requirements was that he should pay for the labor and material.
Somewhat is said in argument on the question of superiority of equities. If we are correct in our conclusions thus far, we have no occasion to consider this question. The equities are appealing on both sides of the controversy. The plaintiff bank did advance to Jones large sums of money in aid of his carrying out the contract. It acted at all times in good faith, and in reliance upon its assignment. It is entitled to all the protection which the law will permit. Nevertheless, it was bound to take notice of the contract in its entirety, and it was bound to know that, under its assignment, it would stand all the time in the shoes of its assignor, and that it would be subject to all the financial vicissitudes and calamities that might attend the execution of his contract. It took a grave risk, which, though in no manner discreditable, did not and could not diminish the contractual rights either of the school district or of the labor and material claimants. Whether these claimants could have successfully maintained an action against the school district, we do not determine. Whether, against the will of the school district, these claimants could have established a legal or equitable claim to