61 F. 77 | 3rd Cir. | 1894
In treating this case, we will consider, first, the seventh assignment of error, which is based upon the following exception, namely:
This was the only exception to the charge, which wás very full,— covering every branch of the case. The exception, it will be perceived, does not quote any part of the charge, but goes only to the supposed general effect thereof iff the one particular mentioned. It rests upon the following clause of the agreement of February 2,1892, between Stevens (party of the first part) and Mundy & Co. (parties of the second part):
“(9) In case the party of the first part shall fail to perform this contract, so as to endanger the forfeiture of the contract with the war department, the parties of the second part shall have the right to proceed to the completion of the work, in order to keep good their above-mentioned contract with the war department.”
The defendants below (the plaintiffs in error) did not ask the court to give the jury any special instructions with reference to this provision of the contract or its bearing upon the pending controversy. So far as the record shows, they did not present their views upon that subject to the court otherwise than by the brief and ■vague exception above quoted. Here, as the case is presented in the printed argument, two points are made, namely:
“(1) The real question was, had Stevens, August 16, 1892, endangered the forfeiture of the contract, the judge’s charge rather conceding this, and treating it as waived ? (2) The evidence is conclusive, requiring the court to say, as matter of law, that Stevens had then so endangered forfeiture as to justify Mundy & Oo. resuming the plant under the contract.”
But we think it would have been plain error had the court so instructed the jury. The contract of February 2, 1892, whereby Stevens agreed to perform the work which Mundy & Oo. had undertaken to do by their contract with the United States government, expressly provided that Stevens was to do the work “within the times fixed by said'contract and the extensions thereof, granted or to be granted.” It is, then, very clear that Stevens was entitled to the benefit of the extension of the time of performance until January 1, 1893, which the government had granted in the first week-of August, 1892. Hence Mundy & Co. had no right to oust Stevens at the very beginning of the extended time without good reason shown. The case, therefore, was not one for peremptory instructions. ■Whether Mundy & Co. had justifiable cause for taking possession of the plant and work on August 16th was submitted to the jury for their determination, the question being presented to them in two aspects. First, however, the jury were instructed that if, prior to that date, there had been an absolute or substantial failure by Stevens to comply with his contract, he was not entitled to recover anything, and whether he had so failed was referred to the jury. Then the charge proceeded thus:
“The defendants further assert [and thus we approach the real subject of controversy between these parties, in the judgment of the court] that the plaintiff absolutely abandoned the work, voluntarily, in August; and that, even if he did not, he was then so far behind in its performance that he could not have completed it by the end of the year, when the government re*83 quired it to be completed, or, at least, tliai they were justified by past and ex-: is ting circumstances in believing that be would not so complete it within the time. Herein is embraced the substance of the defense.”
Now it is to be observed that the defendants below took no specific exception to this portion of the charge as misstating the real subject-matter of controversy or unduly narrowing the issues.
The court next proceeded to submit to the jury the question whether Stevens, the plaintiff, had abandoned the work when die defendants .Mundy & Co. took possession, with instructions that, if they so found, the plaintiff could not recover. Finally, the court submitted to the jury the question whether the plaintiff was so far behind in his work on August Kith that Mundy & Co. were justified in believing that he would not complete the work by the end of the year. Here the court said:
"The only serious source of danger to the contract at the time referred to was from failure to complete the work by the end of the year. The efforts of the engineer in charge were intended principally, as it would seem from past experience, to hasten the work. I repeat that the only real source of danger- was involved in the question whether the plaintiff would complete the work within the period named. If you find from the evidence that Mundy & Oo. were justified in believing, from all the circumstances, that the plaintiff would not complete it within the year, then they were justified in turning- him out, and resuming the work themselves; otherwise, they were not.”
And the jury were further instructed that all the circumstances existing at the time the plant was seized by the defendants, and all past experience respecting the work,—the plaintiff’s prior failures and Ms conduct,—were to be taken into account in determining the question whether or not the defendants were justified in believing that the plaintiff would not finish the work by the last of the year, and that if they so believed, or were justified in so believing, they were justified in turning the plaintiff out, and he could not recover. We are not convinced that the defendants below had any right to complain of the manner in which the case was submitted to the jury. From our examination of the evidence, we do not discover that on August 16, 1892, there was any real danger of the forfeiture of Mundy & Oo.’s contract with the government other than from the possible failure to complete the work within the extended time. By the extension in August, presumably, the government had waived past delinquencies. Moreover, the unconfradicted testimony is that the extension was unconditional,—not dependent upon an increase of the plant. Our conclusion, then, is that the seventh assignment of error is without substantial merit, and, accordingly, it is overruled.
All the other assignments of error relate to the liability of the sureties in the bond of February 2, 1892, and they will be considered together. The bond was conditioned for the payment to Stevens by Mundy & Co. of all moneys received by them for work done under the contract with the government, “as provided in the agreement of even date herewith” between Mundy & Co. and Stevens. Turning to that agreement, we find that, by the fourth paragraph thereof, Mundy & Oo. (parties of the second part) bound themselves to pay to Stevens (party of the first part) the contract price for all work done-
“The parties of the second part shall be paid monthly, until the payment of all money becoming due to them under the provisions of this section, the sum of three cents per yard for all material dredged during the month, and if subsequent to June 30, 1892, any such monthly payment shall not amount to at least nine thousand dollars ($9,000), the parties of the second part may deduct from the next payment falling due the party of the first part thereafter, under the provisions of the fourth section hereof, such sum as shall bring the payment for such preceding month up to the said sum of $9,000. The unpaid part of such $9,000 shall draw interest at six (6) per cent, from the date on which it should have been paid until paid or deducted as aforesaid; but no action shall be brought by the parties of the second part against the party of the first part for any such deficit below $9,000 in a monthly payment, unless said party of the first part shall fail to perform the work under this contract, and the parties of the second part shall be thereby compelled to complete the work. Said sum of $179,000 shall be paid within eighteen (18) months from this date; $150,000 thereof shall, if practicable, be paid within one year from this date, and in case any part of said sum of $150,000 shall then remain unpaid, such unpaid part shall draw interest at six (6) per cent, from thát date till payment.”
In the month of June, 1892, Stevens and Mnndy & Oo. entered into a supplementary agreement, whereby the sixth paragraph of the agreement of February 2, 1892, was canceled and revoked, and the following section was substituted therefor:
“(0) The party of the first part, in consideration of the premises, hereby agrees to pay to the parties of the second part the sum of one hundred and seventy-nine thousand dollars ($179,000) as follows: The parties of the second part shall be paid monthly, until the payment of'all money becoming due> to them under the provision of this section, the sum of two and one-half cents per cubic yard for all material dredged during the month.”
Was this change material to the sureties? We are constrained to hold that it was. True, the bond is not conditioned for the performance generally by Mundy & Oo. of their stipulations. Yet the payments to Stevens, for which the bond is conditioned, were to be made “as provided in the agreement,” and the fourth and sixth paragraphs thereof are so related to each other that, with reference to the obligation which the sureties assumed, they must be read together. Now, the latter paragraph secured to Mundy & Oo., after the month of July, 1892, the right to a monthly deduction of not less than $9,000 from the payments to be made by them to Stevens under the fourth paragraph. The benefit of this provision undoubtedly inured to the sureties, and without their concurrence they could not be deprived of this right of defalcation. Navigation Co. v. Rolt, 6 C. B. (N. S.) 550; Calvert v. Dock Co., 2 Keen, 638, 639; Bragg v. Shain, 49 Cal. 131; Dundas v. Sterling, 4 Pa. St. 73. The June agreement, however, did not merely reduce the rate of payment to Mundy & Co., but altogether canceled the provision securing a minimum monthly deduction of $9,000 from the payments to Stevens. That the position of the sureties was thus altered to their prejudice seems to us an unavoidable conclusion. Indeed, it materially affected their liability with respect to the identical fund (the August payment by the government), which is the subject-matter of this suit.
The point made by the defendant in error that the sureties could not in the court below raise (he defense based on the change of the contract without previous notice thereof is not sustainable. Ho rule of court requiring such notice has been brought to our attention, and by the Pennsylvania procedure act of May 25, 1887 (P. L. 271), the defense was permissible under the plea of the general issue, and, indeed, a special plea setting it up was not allowable. Hor can we assent to the proposition that the burden of proof was upon the sureties to show that the alteration of the agreement of February 2, 1892, was without their consent. The case's cited in support of this position are inapplicable, for the sureties here were not the actors. The plaintiff set forth the supplementary agreement of June, 1892, in his statement of claim,—made' it part of his case, and introduced it in evidence. The burden, of proof, therefore, was upon him. Whart. Ev. § 357. We are unable to And in this record any evidence; tending to show that John M. Sharp assented to, or e;ve-n had knowledge of, the alteration of the agreement. This defense, then, avails him. But as re;spee*,ts the other surety, Clarence M. Busch, the case is different. It appears that he signed the supplementary agreement of June, 1892,—acting, it is true, as attorney in fact of one of the principals,- -thus, “Joseph Busch, per C. M. Busch, Attorney.” That he had full knowledge of the alteration is indisputable;. Is he in any position f.o say that the alteration was without his assent, and, hence, that he is equitably absolved from his liability as surety upon the bone! in suit? There is no evidence that he personally objected to the change. This, indeed, is not pretended. He gave no sign of dissatisfaction. The case, however, is not eerie; of simple acquiescence. Clarence M. Busch was not merely passive. He took an active part in making the change in the contract. Without Ms co-operation the paper' of June, 1892, weiuld have been ineffective. He gave it validity. Barely, then, complaint in his mouth is out of place. Can he, under all the circumstance's, fairly claim the; beneAt of the principle that an alteration of a contract without the; surety’s concurrence discharges hirn? In Edwards v. Coleman, 6 T. B. Mon. 567, cited by the plaintiffs in error, the surety signed asa mere witness. Moreover, at: the time he was told that he was discharged, and with that understanding he attested the instrument. This case is essentially elifferent. Here the surety joined in bringing about the change of which he now seeks to take advantage. His defense is absolutely devoid of merit. In Woodcock v. Railway Co., 1 Drew. 521, it was held that sureties were not released by an alteration, in the
The situation, then, is this: One of the two sureties assented to the alteration of the contract; the other did not. In this state of affairs, the nonassenting surety is discharged, but the other remains bound as before. Wolf v. Fink, 1 Pa. St. 435; Crosby v. Wyatt, 10 N. H. 318. The assenting surety, in such case, in effect agrees that he will stand as surety for the whole liability, and that his cosurety shall be released. Id. Where one of the several defendants sued upon a joint contract sets up a defense personal to himself, the approved practice is to allow a nolle prosequi as to that particular defendant, and to proceed against the others by verdict or judgment after the verdict, as the case may be. Minor v. Bank, 1 Pet. 46; Kurtz v. Becker, 5 Cranch, C. C. 671, Fed. Cas. No. 7,951; Commonwealth v. Nesbitt, 2 Pa. St. 16; Freedly v. Mitchell, Id. 100; Woodward v. Newhall, 1 Pick. 500; Burke v. Noble, 48 Pa. St. 168. In the court below the question of the discharge of the defendant Sharp was raised by prayers for instructions for a verdict in Ms favor. ' The court reserved the question of law involved, and a verdict against all the defendants was rendered. After verdict, Sharp moved for judgment in his favor, non obstante veredicto, which motion was dismissed, and judgment on the verdict entered against the defendants generally. In this state of the record the proper-course, it seems to us, to pursue is to reverse the judgment, and remand the cause for further proceedings in conformity with the views expressed in tMs opinion. Accordingly, the judgment is reversed, and the cause is remanded to the circuit court, with directions to allow the plaintiff to enter a nolle prosequi as to the defendant John M. Sharp, and thereupon to enter judgment .on the verdict against the Other defendants.
Sur Motions to Amend the Reversing and Remanding Order.
1. The motion made by the plaintiff in error to amend our remanding order is denied, for reasons appearing in the opinion of the court heretofore filed.
2. Without meaning to intimate a doubt as to the right of the court, in the exercise of a sound discretion, to enter the judgment which the defendant in error now moves for, we must deny the application, for we are not satisfied that it would be proper for us to enter such a judgment, under all the circumstances of the case. We therefore adhere to our order reversing the joint judgment and remanding the cause for, further proceedings in conformity with our, conclusions.
