108 Mich. 339 | Mich. | 1896
The defendant Powers was a paving contractor, and the other defendants are his sureties upon a bond given in compliance with the statute (2 How. Stat. §§ 84115, 8411c, and 3 How. Stat. § 8411a) to secure payment by the contractor and subcontractors for all labor, performed and materials furnished upon a contract let to him by the city of Grand Rapids for the improvement of Valley avenue. Hirth & Son were dealers in stone, and furnished the curbstone, and perhaps some stone for crossings, for this job, upon an agreement made by them with Powers soon after the contract was let by the city. Previous to the time such agreement was made, Powers was indebted to Hirth in the sum of $300, for which Hirth had signed a note with Powers at bank, thereby receiving pay from the proceeds of the note. This note had been renewed from time to time, and a renewal note was then outstanding. It was paid by Powers giving Hirth an order for $300 upon his second estimate of work done under the Valley avenue contract, which Hirth presented to, the city treasurer, whereby he obtained the money, and paid the note at bank.
Three questions are presented by counsel for the de-. fendants, who have appealed from an adverse judgment:
1. That Hirth & Son were subcontractors, and therefore not within the protection of the bond.
2. That, if found to be within the provisions of the statute, the sureties were released from liability upon the Hirth claim by the application of $300 to an existing debt by the procurement of Hirth & Son.
3. That, if not released, the $300 should be applied in reduction of their claim.
The jury determined that Hirth & Son were material men, and not subcontractors, and the first question arises on the rulings of the court relating to the introduction of testimony upon the subject. The defendants’ counsel claim that they should have been permitted to show that the bargain for the stone was for a given quantity, and
The defendants’ counsel cite a number of cases in support of the contention that the receipt by Hirth of $300 upon an antecedent debt was inequitable, and contend that the sum so received should be applied in reduction of the liability of the sureties, if it be not held to release them altogether as to the Hirth claim. These cases, for the most part, involve bonds given to the landowner as a protection against liens, and the sureties are held to be dischai’ged by reason of payments advanced before they became due according to the terms of the respective contracts, upon the ground that such payments tended to remove inducements to perform the contract, which the withholding of such payments was calculated to offer. Counsel insist that there is an analogy between such cases and the present, because this bond is given for the benefit of the laborers and material men, as in those cases the bonds were given for the benefit of the landowners, and in this case the acceptance of the sum of $300, on an earlier debt, lessened the inducement to perform the condition of the bond, as in those cases the receipt and use of the money was likely to do. There seems to be, however, one difference. In the cases cited there was privity of contract between the sureties and the obligee, and the bond upon its face undertook that the contract should be performed. By accepting it, the obligee was in duty bound not to vary the contract in such way as to increase the liability of the sureties, whether by making new contracts, extending time of performance, or otherwise. In this case there is no actual privity of contract between
The judgment is affirmed.