37 Wash. 515 | Wash. | 1905
On the 18th day of April, 1902, the respondent entered into a contract with N. H. Beer, by the terms of which contract said Beer was to furnish all the materials, and erect a church building in the city of
“The condition of the foregoing obligation is such that, if the said principal shall well, truly, and faithfully comply with all .the terms, covenants, and conditions of said contract on his part to be kept and performed, according to its tenor, then this application shall be void; otherwise to remain in full force and effect: Provided, that the said surety shall be notified in writing of any act on the part of said principal, or his agent or employees, which may involve a loss for which the said surety is responsible hereunder, immediately after the occurrence of such act shall have come to- the knowledge of the fully authorized representative, ... of the Trinity Parish, .... Provided, that if the said principal shall fail to comply with all the terms of said contract to such an extent that*519 the same shall he forfeited, then the said surety shall have the right and privilege to assume said contract and to sub-let or complete the same, . . . Provided further, that in the event of any breach of the conditions of this bond said surety shall be subrogated to all the rights and properties of said principal arising out of said contract, and all payments deferred, and any and all moneys and property at that time due said principal under and hy virtue of said contract shall be credited upon claim which said Trinity Parish of Seattle will make upon said surety, . . Provided further, that any suits at law or proceedings in equity brought against this bond to recover any claim hereunder must be instituted within six months after the first breach of said contract.”
After the execution of the contract and bond, the contractor proceeded with the work. The building was not completed at the time designated, because, during the progress of the work, certain extras were furnished which had the effect to extend the time for the completion of the building. On January 3, 1903, respondent gave the appellant written notice of its intention to make the last partial payment, under the contract between respondent and said contractor, and the payment was subsequently made. The work was substantially completed on or about January 20, 1903, when the contractor quit the work and left the state. The respondent thereupon took possession of the building, and corrected some defective work at a cost of about $150. At the time said Beer quit the work, he left a number of bills for materials unpaid. On January 30, 1903, soon after respondent learned of these unpaid bills, notice was given to appellant that the contractor had failed to pay for said materials and labor. At the time this action was begun, liens had been filed on the building for claims amounting to some $1,500, but liens had not been filed for other claims amounting to about $4,000. The action was brought in the nature of specific performance, and all the lien and other claimants were made par
Appellant insists that neither the complaint» nor the evidence is sufficient to establish a cause of action, because, at the time the action was begun, the respondent had paid no claims against the building and had, therefore, suffered no damages by the default of the contractor. The argument is based upon the contention that the bond given by the appellant was one of indemnity merely. Many authorities are cited to the effect that, when the undertaking is one of indemnity, there is no liability until the respondent has been damaged by reason of having actually paid out money, or become obligated by a judgment to do so. Conceding, without deciding, that this is the general rule, where the undertaking is indemnity, merely, to. save the respondent harmless from loss of damages which he may sustain, we cannot agree to the contention that this bond is one to save the respondent harmless from loss of damages which he may sustain. It does that, to be sure, but it does more. It provides:
“If the said principal shall well, truly and faithfully comply with all the terms, covenants and conditions of said contract on his part to be kept and performed according to its tenor, then this obligation shall be void] otherwise to remain in full force and effect.”
This, and other provisions quoted, clearly show that the bond is a guaranty that the contractor will perform his contract. When the contractor failed to perform his contract, the guarantor became immediately liable for the faithful performance of all its terms. This point was. decided by this court in Friend v. Ralston, 35 Wash. 422, 77 Pac. 794. It is true that, in the Friend case, liens had been foreclosed and judgment rendered, but the failure
“The covenant in the building contract on the part of 1b-' contractor with Mrs. Friend is as between them equivalent to a direct promise to pay for materials used in the construction of the building, and a breach of the contract occurred when the contractor suffered the obligation to become a charge on her property; at least, she was entitled to treat it as a breach. It may he true that she was not obliged to do so; that she could have waited until the lien had become fixed and determined by judgment against her property, and treated that as the breach of the bond, thus escaping the onus of establishing at the trial the validity of such lien and the amount of the indebtedness, but she was not obliged to delay action in that behalf. She could treat the failure of the contractors to keep her property free from such, incumbrance as a breach of the contract.”
In this case the respondent, for the same reason, could treat the failure of the contractor to pay for the labor and materials as a breach of the contract, as in fact it was, because such failure was a failure of the contractor to well, truly, and faithfully comply with all the terms, covenants, and conditions of said contract on. his part to- be kept and performed. We think, therefore-, that the complaint stated a cause of action, and was not prematurely brought.
It is next claimed that the provision in the bond, to the effect that immediate written notice, of any act on the part of the principal which may involve loss, shall he given to the surety, is the essence of the bond, and that, since notice was not given until January 30, 1903, five months after the failure to complete the building in time, no recovery can now be had upon the bond. The court below held that the failure to notify the bonding company of the default in completing the building within the prescribed time was
In this case the contract provided for damages at the rate of $5 per day, if the buildings had not been completed on the 1st day of September, 1902. The contract also provided for an extension of the time, upon certain contingencies. The court found at the trial that the time was extended some forty-one days, and gave no damages for this time. The failure to immediately notify the surety company of the non-completion of the building by the contractor on time was, at most, a waiver of the claim for damages in that respect, but was not a waiver of the entire .contract. Ovington v. Aetna Indemnity Co., supra; Heffeernan v. United States Fidelity etc. Co., ante p. 477, 79 Pac. 1095.
The record discloses that Beer, the contractor, was actively engaged in the work until about the 20th of January, 1903. On that date, after drawing all the money due him upon the contract, except what was coming on final payment not then due, he suddenly left the state, and thereupon it was discovered that claims for labor and materials had not been paid. Within ten days after this time, the appellant was notified in writing of this defalcation. This was a sufficient notice within the meaning of the provision of the bond. Remington v. Fidelity & Dep. Co., 27 Wash. 429, 67 Pac. 989.
There is no error in the record. The judgment is affirmed.
Fullerton, Hadley, and Dunbar, JJ., concur.
Rudkin, Root, and Crow, JJ., took no part.