*660
It is contended, however, that, even if this paragraph be so construed, all liability to subcontractors is obviated by a subsequent provision that “ it is the express condition of this contract that no member of said committee, or other person, whose name is not at this time disclosed, - shall be admitted to any share of this contract, or to any benefit to arise therefrom; and it is further convenanted and agreed that this contract shall not be assigned.” That is, under the construction contended for the parties, after specifically agreeing that payment shall be promptly made for labor and materials, they then stipulated that none other than those named shall derive any benefit therefrom. It seems all but inconceivable that after recognizing that labor and materials must be bought by the contractor, and obligating him to promptly pay therefor, that this paragraph was intended to exclude those furnishing them from “ any sháre of this contract or to any benefit arising therefrom.” Just how such a feat, paying without conferring a benefit, may be performed, is not explained. But such is the construction contended *662 for by tbe surety company, and, without undertaking to say what the parties did mean, we shall content ourselves with the easier task of determining what they did not mean.
As said, the first paragraph quoted is an absolute promise on the part of the contractor to pay for all labor and materials, but this, if the last paragraph be construed as contended, can be done only on the condition that the labor and materialmen derive no benefit from, or thereby share in, the contract. But this involves an utter impossibility. How could such payment be exacted without benefiting these men? • And how were it possible for these men to sell materials and furnish work for the building in furtherance of the contract under a stipulation that the contractor promptly pay therefor without being “ admitted to any share of the contract ? ” If the construction contended for be accepted, the agreement “to promptly pay for all labor,and materials used in and about the building ” would be absolutely contradictory and inconsistent with the condition that no labor and materialmen “ shall be admitted to any share of this contract or to any benefit to arise therefrom,” and this result should be avoided for a proviso in a contract totally repugnant to the contract itself is void.
Benjamin v. McConnell, 4
Gilman 436 (
In the last case it was said: “ The condition, therefore, is repugnant to the previous convenant, and must destroy or be destroyed by it. When this is the case, the rule of law is well settled that the condition must give way that the covenant may stand.” A rule of construction requires us to so construe each provision as to give it effect, if possible; and, in view of the result of that contended for, we are inclined to reject it as not intended and to hold that some other purpose not disclosed was sought to be attained by inserting the paragraph last quoted.
The bond provides that “ if the said Northern Build: ing Company shall well and truly perform all the terms
*663
and conditions of said contract, according to the plans and specifications made part thereof for said Library Building, and fully comply with each and all '.of the said conditions of said contract, then this bond to be void and of no effect; otherwise in full force and effect, and for the payment of damages of any kind that may result by reason of the failure of said Northern Building Company to comply with the said contract, as aforesaid, according to its strict terms and conditions.” The condition, it will be observed, is not limited to the payment of damages suffered by the committee, but broadly includes compliance with all the
“
terms and conditions of said contract.” As the construction we have given both the bond and contract is not doubtful, it is unnecessary to take up the question argued as to whether any favoritism is due to a company organized to act as surety for hire, but see
Getchell v. Petersooij
Fort Dodge, Iowa, Nov. 5, 1902.
Carnegie Library Association: Please pay the Commercial National Bank $4,000.00 on completion of Library Building and charge same to our contract account. [Signed] The Northern Building Co., by J. E. Nason, Mgr.
*664 Upon this the treasurer, on presentation indorsed:
November 5, 1903.
After final completion of the Fort Dodge Public Library by the Northern Building Company and acceptance by the Building Committee, I will pay the within order out of the funds in my hands, as treasurer, to the Commercial National Bank instead of the Northern Building Company. [Signed] Webb Vincent, Treasurer Library Building Committee.
At the same time a voucher, in words following, was signed by the building company:
Building Committee Fort Dodge Public Library, to Northern Building Co., Dr. to cash paid on order of Commercial National Bank, the same being a payment on final estimate on completion of the Library Building and its acceptance by the Library Building Committee, $4,000.00.
$4,000.00. Received of Webb Vincent, Treasurer Building Committee of the Fort Dodge Public Library the sum of four thousand dollars, in full of the above account. [Signed] The Northern Building Co., by J. E. Nason.
These several instruments were taken to the bank, the note of $1,600 given, and a credit of that amount entered in favor of the company. The other notes were extended. Upon the completion of the building $2,814.46 remained in the hands of the committee, of which $1,214.27 was or-' dered paid to subcontractors who had complied with section 3102 of the Code by filing claims with the treasurer of the committee within thirty days after the last item was furnished, and $1,600.27 to the bank. The bank insists that this entire fund should have been paid to the bank, while the surety company, with equal persistency, contends that no part thereof should have been so applied. That an order for the payment of a specific sum out of a fund larger in amount will operate as an equitable assignment thereof
pro tanto
is the settled doctrine of this court.
McWilliams v. Webb,
So we should first look to the terms of the contract between the building company and the committee to ascertain the fund, if any, out of which the order might be paid. That instrument required the completion of the building by January 1, 1902, and further provided:—
That if the said party of the second part shall fail to complete the work herein contracted for, in accordance with this agreement within the time herein provided for, or shall fail to prosecute said work with diligence, as in the judgment of the party of the first part, or their agents, will insure the completion of the work within the time hereinbefore provided, the said party of the first part may withhold all payments for work in place until final completion and acceptance of the same, and is authorized and empowered after eight days’ notice thereof in writing, served personally upon or left at the shop, office or usual place of abode of the said party of the second part, or with their agent; the second party having failed to take such notice within the said eight days, as will in the judgment of the said party of the first part, remedy the defect for which said notice was given, to take possession ” and complete the building, “ and the party of the first part covenants and agrees that payments will be made in the following manner, viz.: Ninety per cent, of the value of the work executed, and actually in place to the satisfaction of the party of the first part, will be paid from time to time as the work progresses, the said value to be ascertained by the party of the first part, or their agents ; and the ten per cent, thereof will be retained until the com *666 pletion of the entire work, and the approval and acceptance of the same by the party of the first part, which amount shall be forfeited by the said second party in the event of the nonfulfillment of this contract; it being expressly covenanted and agreed that tbe said forfeiture shall relieve tbe party of tbe second part from liability to tbe party of the first part for any and all damages sustained by reason of any breach of tbis contract.
Nothing bad been earned by tbe building company not already paid, save tbe ten per cent, wbicb tbe committee retained when tbe order was given on November 5, 1902. Between that time and January 24, 1903, labor and materials of tbe estimated value of $1,500 bad been furnished. On tbe latter date tbe company failed, and the committee, without declaring a forfeiture, completed tbe building, and accepted it August 15th thereafter. Under tbe express terms of the contract tbe committee bad tbe right to “ withhold all payments for work in place until final completion and acceptance of tbe same.” The ten per cent, also might be so retained. Manifestly, then¿ tbe building company bad nothing owing of wbicb it could have made a present transfer. It could only assign that wbicb might become payable, subject to tbe contingencies recited in tbe contract with tbe committee. It was in view of these conditions that tbe acceptance was drawn stipulating for the payment of tbe order “ to tbe Commercial National Bank instead of tbe Northern Building Company . . . after tbe completion of tbe Ft. Dodge Public Library by the Northern Building Company and acceptance by tbe building committee.” In other words, tbe treasurer merely agreed to pay in strict compliance with tbe contract, save that payment be made to tbe payee of tbe order, instead of tbe Contractor. Indeed, tbe order itself was for tbe payment “ on completion of Library Building.” The bank entered tbe credit to tbe building company on tbe order with the acceptance indorsed thereon, and therefore look tbe order subject to what *667 ever conditions the acceptance imposed. These were precisely the conditions found in the contract, and the order, with the acceptance, operated to transfer no more than might be in the hands of the treasurer to pay upon the completion and acceptance of the building. What amount was then in his hands subject to the order? Prior to that time the claims of the subcontractors, which the court ordered to be paid from the balance in the treasurer’s hands, had been perfected by filing- and giving notice within the statutory period. This gave the subcontractors the right of .payment by the committee “ for the value of such services and materials, not in excess of the contract price.” Section 3102, Code. But, as the building company was to pay for all labor and material, these amounts were due from that company, and no more than the excess of such claims would have been payable to it. We think this was all that was transferred to the bank and that, in view of the situation of the parties, the clause “ I will pay the within order out of the funds in my hands, as treasurer, to the 'Commercial National Bank instead of the Northern Building Company,” meant that the treasurer would pay the bank whatever amount was in his hands upon the acceptance of the building, which would otherwise have been payable to the company. Otherwise, payment in excess of the ninety per cent, stipulated was made and the release of the surety’s obligation to the committee effected. Otherwise, the committee for whom the treasurer acted or the city of Pt. Dodge would be liable on this order.
In construing the order and acceptance, it must be borne in mind that the parties are to be assumed to have been familiar with the law relating to the establishment of labor and material claims. The president of the bank, who conducted the negotiations for it, was also chairman of the committee, and knew that the building had not been completed, and was advised of the amount still on hand. His first duty was to the public the committee served, and what *668 lie did must be construed in the light of that duty. As between two masters he will be assumed to have intended to serve the. public rather than his private interests involved in obtaining security for an indebtedness and making additional loans for his bank. On the other hand, the treasurer ought not to be held to have intended to involve himself, the committee, or the city in an obligation not beneficial to any, unless this is required by a fair construction of the acceptance. As said, we think the order and acceptance, when construed together, purported to and did assign to the bank no more than should be found payable to the building company upon the completion and acceptance of the building. This conclusion disposes of 'other questions raised by the bank not necessary to enumerate.
*670
But it is said that a public building such as a City Library has no rental value. While this does not necessarily follow, it is ordinarily true, and in such cases it would seem that evidence of the actual value of its use to the city
*671
might he shown. Resort to proof of actual worth of property having no market value is permissible.
Gere v. Ins. Co.,
In the absence of evidence of damages, the court rightly denied the relief sought by the city. The decree is in all respects approved. — ■ Affirmed.