National Surety Co. v. City of Atlanta

24 Ga. App. 732 | Ga. Ct. App. | 1920

Stephens, J.

(After stating the foregoing facts.)

Was there a contract between the parties as set out in either count of the petition? If there was no contract, there was no breach of the bond given to guarantee the performance of the contract.

1. The alleged contract which was attached to the petition contained promises and obligations on the part of the coal company, but did not contain any executed consideration or promise or undertaking on the part of the city. It purported to be a bilateral contract, i. e. a contract executory on both sides. The city not being obligated to the performance of any promise, and there being no mutual promises as a consideration for each other, the alleged contract is lacking in mutuality and therefore void. After reciting that the City of Atlanta had accepted a bid pf the coal company to furnish coal to the city, which bid was attached to the instrument as an exhibit, and contained promises by the coal company only and the terms upon which the coal company would for a period of one year furnish coal to the City of Atlanta, the instrument provided: “that for and in consideration of the premises and the acceptance of the bid of said contractor by said city, as above set out, and in consideration of the promise on the part of the said city to pay said contractor the sum of $2.50 per ton, said Tennessee & Southeastern Coal Company, contractor aforesaid, hereby agrees as follows.” There is then set out the promises of the Tennessee & Southeastern Coal Company and the terms and conditions under ■ which it will furnish coal to the City of Atlanta, subject to certain directions as to quantities and times of delivery by the city. Nowhere therein does the city obligate itself to take the coal or any part thereof. The past acceptance of the bid by the city, and the promise on the part of the city to pay for the coal at so much per ton, recited as a consideration for the promise of the coal company, cannot be regarded as a consideration. A past consideration or existing contractual obligation between the parties generally does not support a promise. The stipulation that the city agrees to pay so much per ton for the coal which it orders does not obligate the city to take any coal or to pay for any coal except that which it does order. The city not being bound to order or accept any coal, both parties were not bound, and there was no contract as set out in the first count of the petition.

2. The promises and undertakings of the coal company must therefore be considered as amounting only to an offer by the coal company to contract with the city, which promises and undertakings would become binding as a contract between the parties only upon acceptance by the city. There being, as a part and condition of the offer, a provision allowing the city to suspend deliveries of coal, the action of the city in ordering coal under the terms of the offer in installments from time to time, without at once in the beginning obligating itself to make further orders, amounted to an acceptance of the offer of the coal company, which action by the city created a binding contract with the coal company respecting the coal actually ordered by the city. The "right of the city to suspend deliveries of coal did not apply to any order for coal made by the city when delivered by the coal company before the expiration of 48 hours from the date of notice by the city to the coal company to suspend deliveries. The city therefore became bound for all coal which it actually ordered under the terms of the offer, and could not relieve itself of such obligation by any notice to the coal company to suspend the delivery of the coal so ordered unless the coal company delayed the delivery until after 48 hours from the date of notice to it by the city to suspend the delivery. Both parties therefore became bound as respects orders actually made by the city, the coal company being bound to make, and the city being bound to accept, deliveries. There was therefore a contract as set out in the second count of the petition, and it follows that the failure of the coal company to make deliveries of coal actually ordered by the city constituted a breach of this contract, for which the coal company was liable to the city in damages.

.3. Properly construed, the bond executed by the coal company with the defendant, the National Surety Company, as surety, guaranteeing to the city the faithful performance of the so-called "contract” by the coal company, also guaranteed the performance of whatever contract arose out of the instrument executed between the coal company and the city. This is true whether such contract arose immediately upon the instant of the execution of the instrument by both parties, or upon an acceptance afterwards by the city of the promises and undertakings of the coal company, considered as an offer. There was no necessity for any notice to the guarantor of acceptance by the city of the offer of the coal company, or of the failure of the coal company to perform. See Peck v. Precision Machine Co., 20 Ga. App. 429 (93 S. E. 106); Sheffield v. Whitfield, 6 Ga. App. 762 (65 S. E. 807); Sanders v. Etcherson, 36 Ga. 405, 409.

4. This being a suit by a municipal corporation to recover for the breach of a bond guaranteeing the performance by a third party of a contract with the municipality, and not being a suit against a county or municipal corporation to recover for an indebtedness due by a county or municipal corporation, it is not necessary for the petition to allege a compliance by the city with the constitutional provisions governing the creation of an indebtedness by counties and municipalities, contained in article 7, section 7, paragraph 1 of the constitution of Georgia (Civil Code (1910), § 6563).

5. A cause of action for a breach of the bond was set out in the second count of the petition. The trial judge therefore properly overruled defendant's demurrer.

Judgment affirmed.

Smith, J., concurs. Jenkins, P. J., concurs in the judgment.