163 Iowa 510 | Iowa | 1914
In April, 1905, the board of supervisors of Humboldt county established a drainage district, and ordered the construction of certain open ditches and tile drains in certain townships. The district as established was known as Drainage District No. 4. The contract for the construction of the ditch was let to the defendants Ward Bros, on the 10th day of June, 1905. The contract, so far as material to this controversy provides:
First. That Ward Bros, shall furnish all material and labor necessary to construct and fully complete the open ditch and tileworb, according to the maps, profiles, and specifications therefor.
Second. That they shall commence the work within a rea
Third. The contract further provided that, in consideration of the faithful performance of the covenants and agreements made by Ward Bros., the other party agrees to pay the following prices for open and tile drain, to wit:
Open ditch ..........................11‡ per cubic yard.
18" tile ...............................'...$8.75 per rod.
16" tile.................................. 6.75 “ “
12" tile .................................. 4.75 “ “
Payments to be made as follows: On the 1st day of each month during the progress of the work, the engineer in charge shall furnish the first party with an estimate, showing the value of all material and labor furnished by Ward Bros, during the preceding month, 80 per cent, of said estimate shall be due and payable at once, and the auditor of Humboldt county shall issue to the first party a warrant on the drainage fund of said county in payment thereof; said warrant to be issued not later than the 5th day of each month.
Fourth. Upon the completion of the work, the retained 20 per cent, shall become due and payable.
On the 6th day of July, 1906, Ward Bros., as principal, and the United States Fidelity Guaranty Company, of Baltimore, as surety, duly made and executed and delivered to said county, a bond in the penal sum of' $7,500, conditioned as follows: “The condition of the above obligation is such
On September 6, 1906, the county received from the sale of bonds issued on said drainage district the sum of $19,000; that in addition to this sum, it had collected from landowners, on assessments made, the sum of $8,000; that $27,000 was in thb possession of the proper officers of the county for the use and benefit of the district on said date. In November, 1906, Ward Bros, commenced work on the improvement. The contract price of all the work required of Ward Bros, under the contract, amounted to approximately $26,967.05. During the progress of the work, estimates were made, as required by the contract, and 80 per cent, of the amount shown by each estimate was paid as therein required, except the sum of $222.45, which sum never appears to have been called for by Ward Bros. It appears that Ward Bros, had received in this way, prior to the institution of this suit, the sum of $16,525.17, which sum was either paid to Ward Bros, or to the receiver appointed by the court.
On or about the 19th day of October, 1908, the' defendant F. A. Littell was duly appointed by the district court of Audubon county, receiver for Ward Bros., and was by the court authorized and empowered to continue the business of Ward Bros., and directed to proceed to carry out and complete the various contracts, including the one in question, according to the terms and conditions thereof, and thereafter did continue to represent Ward Bros., under the direction of the court, in the matter now in question. In November, 1909, Ward Bros, had not completed the contract, and the work had not been accepted by the board of supervisors. Thereupon the board of supervisors served notice upon Ward Bros, and the receiver to terminate the contract, and brought suit
As to the facts involved in this suit, the trial court made the following finding:
First. That the open ditch and tile drains were nots completed within the time mentioned in the contract. Second. That the work of construction was not pressed to completion, as provided in the contract, and that reasonable effort was not put forth by the contractors and the receiver to complete the work. Third. That the work was practically abandoned by the contractors, and no reasonable effort made to complete the system. Fourth. That there was no reasonable effort of the contractors and the receiver to respond to the demand of the board of supervisors that they hasten the completion of the contract. Fifth. That the open work and tile drains, so far as completed by the contractors and the receiver, were not done according to the contract and specifications, but that they failed so to do in divers particulars, to wit: (a) The ditch was not completed to the grade line as designated; (b) the ditch was not constructed with banks of the proper slope as contemplated by the contract; (c) the spoil or waste banks were not removed a sufficient distance from the ditch to leave a clear and unobstructed berm six feet in width, but, on the contrary, in many places the earth was
It is apparent from the record that the defendant, Ward Bros, and the receiver had, for all practical purposes, suspended the work upon this improvement before action was taken by the board. Thereafter, the -work was relet, and finished to the satisfaction of the board.
We are of'the opinion that the record disclosed affirmatively that the board was within its right in stopping the further proceedings on the part of the defendants and reletting the work at the time it did; that there was a failure on the part of. the defendants, to perform the work, according to their contract, within the time limit, or within a reasonable time thereafter, and the evidence upon this point fully sustains the finding of the court.
Section 1989-alO, as amended by chapter 118, Laws 33d General Assembly, provides:
If any person to whom any portion of said work shall have been let shall fail to perform the same according to the terms specified in his contract, then the cash deposited by him may be forfeited to the county, or recovery may be had in an action on the bond by the county for the benefit of the levee or drainage district, for the damages sustained and the work may be relet by the board in the manner hereinbefore provided, or the board may cause the uncompleted work to be done, paying therefor out of the balance of the contract price not theretofore paid over to the contractor, and if the expenses of so completing the work exceed such balance of the contract price, then the board of supervisors may cause an action to be brought in the name of the county in behalf of said district for the recovery of the amount of such excess from the contractor and his bondsmen.
The engineer in charge of the construction shall furnish the contractor monthly estimates of the amount of work done on each section and upon filing the same with the auditor, he shall draw a warrant in favor of such contractor, or deliver to him improvement certificates, as the case may be, for eighty per centum of the value of the work done according to the estimate, and when said improvement is completed to the satisfaction of the engineer in charge thereof and so certified by him to the board and approved by it, the auditor shall draw a warrant in favor of said contractor upon the levee or drainage fund, or deliver to him improvement certificates, as the case may be, for the balance due.
Some of the changes directed decreased the amount of work necessary to complete the contract, and where the work required was greater than that provided for in the contract, the contractor was paid for the excess. Some of the changes were never completed by the contractor, and if it had been completed, the labor and expense required to complete it in its changed condition was less than would have been required had it been made to conform to the plans and specifications. All these changes were made with the acquiescence of the contractor, or his receiver.
It is true that if the plans and specifications were changed so that the surety is damaged, or its liability increased, and these are made in violation of the contract, the surety is released, but then only to the extent that the liability is increased by reason of the change. The nature of the work contracted to be done suggests that, in its full performance and completion, some slight changes must be anticipated. The county acts as agent for the drainage district. The work is put in the hands of an engineer, under whose direction the work, under the statute, is required to be done. Their duties are only such as are especially granted by the statute. The law governing negotiable instruments does not apply to contracts of this kind. The contractor must take notice of the authority delegated by statute to the board of supervisors and the engineer. See Monaghan v. Vanatta, 144 Iowa, 119; Haney v. Clarke, 112 Minn. 516 (128 N. W. 1008); City of
The duty of the contractor and his relationship to the other parties, the rights, duties, and obligations of the board of supervisors, the powers of the engineer, the consequences that result, or may result, from a violation of the contract, are practically all regulated by the statutes of this state, and therefore many of the authorities cited by appellant have no application to the condition here.
This, then, was a proper element to be considered by the court in assessing the damages. It was the duty of the- contractor, not only to dig the ditches required by his contract, but to present them upon completion, in a condition that met all the requirements of his contract, and the board had a right to charge against him, in completing the work, which
This is not an action to recover damages based solely upon a failure upon the part of the contractor to complete the contract within the stipulated time. This ease is bottomed on the thought that the contractor had not completed his contract, according to its terms, within the time limited, or within a reasonable time thereafter, and the board of supervisors, exercising the right given them by section 1989-alO, as amended by chapter 118 q£ the Thirty-Third General Assembly, relet the uncompleted work, caused it to be completed, as it should have been completed under the contract, and are suing to recover, in behalf of the district, the excess which they were required to pay to complete the contract, over and above the amount which the contract called for.
It will be borne in mind that this is not an action to recover a penalty stipulated, for failure to complete it within a particular time, but an action to recover the difference between what it cost the plaintiff to complete the contract and what it should have been required to pay had the work been completed according to the terms of the contract. It does not appear from the record that the surety company was prejudiced by failure to receive notice of the forfeiture, at the time it was made; that it could have done anything then that would have released it from the obligation which is now sought to be enforced against it, or that it could have completed the contract for less than it was completed by the county. Or, in other words, it does not appear that it was prejudiced the least by the want of notice. It is possibly true that if it had received notice and it so desired thereafter to assume or complete, or procure the contract to be completed, it might have done so. But there is no evidence that they could, or would have completed it for less than the amount incurred by the county in its completion. In the absence of some showing, it cannot be held that the surety company was prejudiced the least by the want of notice; and, without some showing to this effect, it cannot be held relieved from the obligation of its bond by reason thereof. Upon this point, see Lakeside Land Co. v. Empire State Surety Co., 105 Minn. 213 (117 N. W. 431); Hormel v. American Bonding Co., 112 Minn. 288 (128 N. W. 13, 33 L. R. A. (N. S.) 513).
The bond in this case makes no provision for notice to the surety of a failure on the part of the principal to perform the conditions of his contract, and, in the absence of such provision, we cannot hold that it had such a legal right thereto that a failure to give a notice of forfeiture relieves it
It may be said in the instant case, as was said by this court in Webster County v. Nelson, 154 Iowa, 660: “It cannot be said defendants were taken by surprise, or that they were in any manner misled as to the attitude or purpose of the supervisors, and the defense of want of due notice is in our judgment without merit.” This case may be read with profit on other branches of the case at bar.
It is claimed, however, that these claims were not filed within the time limited in the statute, and therefore they lost the right to participate in the fund. This, as a general rule, is true as against others who have secured rights to the fund after the expiration of the time in which the notice might be served, but it is not essential to the. validity of the claim
There is no dispute in this record that these claims were filed with the proper officer. There is no dispute as to the amount, ownership, and balance due upon each claim. There is no dispute that the labor was done for the principal con-'
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With this modification, the judgment is Affirmed.