McMullen v. United States

167 F. 460 | 9th Cir. | 1909

GILBERT, Circuit Judge

(after stating the. facts as above). The time for the completion of the contract, which was originally 16 months from the date of the contract, was, without the consent of the sureties,-extended, for a further period of 1 year. We may premise the discussion of the question whether the sureties were thereby released from their obligation by adverting to some of the well-settled principles applicable to the obligation of a surety for the performance of his principal’s contract: (1) The contract of a surety is to be construed as any other contract — that is to say, according to the intent of the parties — and the rules for its construction are not to be confused with' the rule that sureties are favorites of the law and have the right to stand upon the strict terms of their obligation. Brandt on Suretyship and Guaranty (2d Ed.) §§ 92 and 94; Lee v. Dick, 10 Pet. 480, 493, 9 L. Ed. 503. (2) It being determined what is the meaning of the contract, the sureties are entitled to stand upon the very terms of their undertaking. Said Justice Story:

“Nothing can be clearer, both upon principle and authority, than the doctrine that the liability of a surety is not to be extended by implication beyond the terms of his contract. To the extent and in the manner and under the circumstances pointed out in his obligation, he is bound, and no further. It is hot sufficient that he may sustain no injury by change in the contract, or that it may even be for his benefit. He has a right to stand upon the very terms of his contract, and if he does not assent to any variation of it, and variation, is made, it is fatal.”

Miller v. Stewart, 9 Wheat. 680, 701, 6 L. Ed. 189. Of similar import are Smith et al. v. United States, 2 Wall. 219, 17 L. Ed. 788; Reese v. United States, 9 Wall. 13, 19 L. Ed. 541; United States v. Freel, 186 U. S. 309, 22 Sup. Ct. 875, 46 L. Ed. 1177; and Guaranty Co. v. Pressed Brick Co., 191 U. S. 416, 24 Sup. Ct. 142, 48 L. Ed. 242. (3) If, in a contract for the performance of, work or the construction of a building or other improvement, it is provided that in the course, of the work one of the parties shall have the right to make certain specified changes therein, the sureties for the contractor are deemed to assent in advance to the making of such alterations; and if they are made, although they may materially vary the contract, the sureties are not released thereby. Wehr et al. v. Germ. Evan. St. Matthew’s Con., Balto., 47 Md. 177; Hayden v. Cook, 34 Neb. 670, 52 N. W. 165; Village of Chester v. Leonard et al., 68 Conn. 495, 37 Atl. 397; People’s Lumber Co. v. Gillard, 136 Cal. 55, 68 Pac. 576; United States v. Freel (C. C.) 93 Fed. 299; De Mattos v. Jordan, 15 Wash. 378, 46 Pac. 402; Northern Light Lodge v. Kennedy, 7 N. D. 146, 73 N. W. 524; American Surety Co. v. San Antonio Loan & Trust Co. (Tex. Civ. App.) 98 S. W. 387, 403. It is not disputed that the extension of time given the contractor in the present case was a variation of the contract sufficient in itself to discharge sureties; but the defendant in error contends that the contract provides for extensions of time, and that therefore the sureties must be deemed to have assented thereto, and that the case comes within the doctrine of the decisions last above cited. It is true that the contract refers in terms to the subject of extension of time. It provides, first, that, in case of unavoidable accident or storm which is likely to delay the progress of the work, the contractor shall forthwith notify in writing the officer in charge, stating in what way and to what extent the fulfillment of the contract may be delayed, so that timely investigation may be made, and that, unless that be done, no subsequent application for extension of time on account of such occurrence will be recommended. It provides, further, that, if the progress of the work should be delayed by anything but unforeseen and unavoidable accidents or storms, or by the action of the government, no application by the contractor for an extension of time will be recommended for favorable consideration, except on condition that the contractor make good any deterioration caused by such delay, etc., and that no extension of time for the completion of the work can be made except upon the authority of the Secretary of the Navy. In none of these provisions is there a promise on the part of the United States that there shall be an extension of time. In none of them, under any exigency that may arise, is the contractor given any right to extension of time. The whole purport of these provisions is to let the contractor know what, if any, excuses for delay will be considered by the officers of the government in case of an application for extension of time, and to specify the officer of the government in whom alone is vested the power to grant it. Such a contract does not provide for an extension of time. It gives no right of any kind to either of the contracting parties. To say that the contractor may apply for an extension of time is to confer no right. That fight, it is needless to say, always exists in the absence of such a provision. The mere suggestion in the contract that one of the par-' ties thereto may, if it sees fit, ask for an extension of time, and that the other party may, if it sees fit, grant it, interjects nothing of a contractual nature. By virtue thereof, the sureties who undertake to become responsible for the performance of the contract cannot be said to assent to extension of time. Sureties to all contracts must be presumed to know that the contracting parties have, as between themselves, the power to make such alterations therein as they may subsequently agree upon. Unless the right to alter the same is expressly reserved in the contract -itself, the obligation of the sureties is to answer for the default of their principal upon the precise contract made, and not upon one which may thereafter be made without their assent. Even an express provision in such a contract that, in the event of the occurrence of certain causes of delay, “additional time may-in writing be allowed” the contractor, does not mean that it shall be allowed. United States v. Gleason, 175 U. S. 588, 20 Sup. Ct. 228, 44 L. Ed. 284.

The decisions cited and relied upon by the defendant in error are all cases in which the power to make the alterations was expressly reserved, and in which it was stipulated that the contract should not thereby be invalidated. Thus in Wehr et al. v. Germ. Evan. St. Matthews Con., Balto., the court said:

“But if, by tbe terms of tbe original contract, additions to or alterations in tbe work are provided for, or left to tbe judgment and discretion of tbe other contracting party, either without limit or within certain limits, then the variation, if within the limits prescribed, is allowed by the contract itself, and the surety cannot complain of the variation which he has agreed to by the original contract.”

,.t In Hayden v. Cook, in a building contract, it was provided that the owner at any time during the progress of the work should have the right to. make any alterations, changes, or additions to the building, and that the same should not invalidate the contract. It was held that the changes and additions disclosed by the evidence were provided for in the contract, and that the making of the same did not discharge or release the surety. In Village of Chester v. Leonard et al. the original contract provided that the engineer of the village could make such changes in the forms, dimensions, and alignment of the work as might, in his opinion, and that of the board of water commissioners, be necessary for its proper fulfillment. The court said:

“Sureties for the performance of a contract so framed must be presumed to contemplate the making of such changes, and, as the defendants did not stipulate for any right to participate in determining whether they should be made, there was no occasion to notify any one but the principal contractor of the fact that they had been ordered.”

In People’s Lumber Company v. Gillard, it was held that, where the contract to which the bond was appended provided for certain changes by the board of trustees, the sureties on the bond must be presumed to have known of such provision, and to have agreed that they would be bound in case changes were made in the contract. The other cases cited are of like effect.

The judgment is reversed, and the cause is remanded to the Circuit Court, with instructions to enter judgment for the defendants in the action upon the pleadings and the agreed statement of facts.