201 P. 1072 | Or. | 1921
At the commencement of the trial counsel for plaintiff moved the court for an order requiring defendants to elect whether they relied upon the bond given by Cornwall with Suetter as surety
By the execution of the bond by Suetter as surety he became liable for a breach of the contract on the part of Cornwall. This condition was maintained up to the time that Cornwall abandoned the contract. By the breach of the contract by Cornwall, Suetter was rendered liable for whatever damages E. E. Cummins was caused to suffer thereby. Cornwall’s contract called for the payment of 46 cents per cubic yard for excavating earth, and no more, except under the circumstances stipulated in the contract. The contract stipulated that Cummins would pay laborers and blacksmith bills every two weeks, which payments were to be treated as advancements on the payments to Cornwall. In order to perform this condition of the contract Cummins had to pay more than Cornwall earned, or more than Cornwall agreed to do the work for. Cummins was thereby damaged to that extent. Suetter, as Cornwall’s surety upon the bond, was liable for such damages. If Suetter had not attempted to complete the contract, and Cummins had then been forced to complete it, the damage Cummins would have suffered would have been the difference in the contract price for doing the work provided for in
It appears from the testimony that Suetter and Cornwall each signed the contract of assignment of the subcontract to Suetter; that by the terms of this contract Suetter wás to take over the contract, release Cornwall, finish the work, and pay all bills and expenses incurred by Cornwall in the prosecution of the work up to about'September 6, 1919, the time of the execution of the contract of assignment, and in consideration of that, Suetter was to receive what might be due Cornwall for the work he had performed. “While the liability of Suetter upon the assignment would be in part the same as his responsibility as surety upon the bond, such liability as assignee would not be limited to the sum of $4,000 as provided in the bond. Such additional obligation assumed by Suetter as assignee was practically in the nature of a supplemental or additional agreement. The undertaking assumed by Suetter by virtue of the assignment was not inconsistent with his obligation as surety. Therefore the defendants could not properly be required to elect as requested by plalntifF, but were entitled to claim under both the bond and the assignment contract. There was no error in the ruling of the court.
The question of the nonliability of Suetter as claimed is asserted or raised by the demurrer to defendants’ answer, by the motion for a directed verdict in favor of plaintiff, and by an instruction to the jury requested by plaintiff to the effect that Suetter was not liable as surety upon the bond which was refused.
The contract and bond plainly provide that Cornwall would perform the work of construction within a certain time, and that if he failed to do so the obligation should remain in full force and effect: Ausplund v. Aetna Indemnity Co., 47 Or. 10 (81 Pac. 574, 82 Pac. 12). According to the testimony Suetter well understood the nature of his obligation as surety, and he is bound by the instrument. The jury so found. It is unnecessary to discuss the conflicting testimony. That matter is settled by the verdict. Any payments made by Cummins for labor and blacksmithing, pursuant to the Cornwall contract, were legitimate expenses in the construction of the highway for which Cornwall and his surety were responsible. The claim that Cornwall should receive the benefit of all of the contract price of the work in excess of the cost, if there were such an excess, without being liable for
Where a contractor assigns the contract to one of his sureties with the consent of the obligee, the assignee assumes the character and responsibilities of the principal: 32 Cyc. 38; 5 C. J., p. 874, §44; Ausplund v. Aetna Indemnity Co., 47 Or. 10 (81 Pac. 574, 82 Pac. 12); Gray v. McDonald, 19 Wis. 213, 229. Such surety, upon the default of the principal and with the consent of the creditor obligee, may complete the contract, and in such case he will be subrogated to all the rights of the principal as well as subjected to the liabilities of the principal under the contract: 32 Cyc. 233; Derby v. United States Fidelity & Guaranty Co., 87 Or. 34 (169 Pac. 500); American Bond Co. v. Regents, University of Idaho, 11 Idaho, 163 (81 Pac. 604); Rohde v. Biggs, 108 Mich. 446 (66 N. W. 331); First Nat. Bank v. School Dist., 77 Neb. 570 (110 N. W. 349). It was therefore appropriate for Suetter to take an assignment of the contract.
In Ausplund v. Aetna Indemnity Co., 47 Or. 10 (81 Pac. 577), Mr. Justice Moore said:
“If such private surety, however, becomes subrogated to the rights of his principal in the undertaking, to which he is a party, because of the latter’s failure to keep his agreement, he ought to be sub*232 jeeted to all the liabilities assumed by his principal, regardless of the original contractual relation. In other words, a corporation becoming a surety may, like a private surety, by permitting its principal to make such default as he pleases, insist upon its strict legal right, and in an action to enforce its liability legally interpose any defense that a private surety may invoke under the same circumstances: But when a surety, either corporate or individual, in pursuance of the terms of an undertaking, ‘assumes’ the performance of the principal’s contract, such' surety, by being" subrogated to the rights of the principal thereunder, must necessarily become subject to all his liabilities.”
Mr. Cummins testified, in part, to the purport that, while Cornwall was at work he was there every few days and kept a memorandum of how many men were working every day. Cornwall gave him “the time every two weeks from his time-book,” and he “checked it up.” During the first part of the work Cummins and Cornwall would compare the amount of labor, and Cummins would give Cornwall a check for the amount. Later Cummins issued checks direct to the laborers and kept an account of the payments for labor and materials. Over the objection and exception of counsel for plaintiff, Cummins was permitted
Paid for Cornwall for labor and board of men and blacksmith bills and materials up to September 6, 1919____.■. $5,821.75
Paid for Suetter from the time he took contract from Cornwall until he quit work for the same purposes........$1,201.95
Expended toward the completion of the contract work to January 29, 1920 ..............................$5,248.92
The statement furnished to plaintiff contains the names of various persons to whom the several amounts were paid and the amount paid to each. Cummins testified plainly that the various amounts were paid for the construction of the highway embraced in the Cummins-Cornwall contract. The proof does not depend upon the itemized account or schedule as primary evidence, but upon the sworn testimony of the witness. Our attention is not directed to any evidence of double payments, or any prejudice to the rights of the surety by reason of the manner in which Cummins conducted the business, and we find none. Some of the payments.for labor and materials for the construction while Cornwall was on the job were paid by Cummins after Cornwall assigned the contract to Suetter. It does not appear that Suetter was in any way injured by reason of this. The testimony indicates, and the jury was warranted in finding, that all of the payments made by Cummins on account of Cornwall were applied for labor, blacksmith bills, and materials for the construction of the highway, in accordance with the terms of the subcontract and bond.
It was proper for the witness to refresh his memory from a memorandum or summary prepared under
The facts in this case, owing to the provisions of Cornwall’s contract, differ from those in the case of Dobbins v. Higgins, 78 Ill. 440, and in similar cases cited by plaintiff. In the Illinois case the obligee withheld money with which to pay certain labor claims and claims for material, instead of paying the contractor as required by the contract bond. In -the present case the testimony tended to show, and the jury evidently found, that Cummins performed his part of the contract. In short, the testimony tended to sustain the allegations of the answer and to support the verdict.
The damages recoverable for a breach of contract are such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract, as a probable result of a breach of it: Blagen v. Thompson, 23 Or. 239 (31 Pac. 647, 18 L. R. A. 315; 8 R. C. L. 455).
In addition to general damages, the injured party is entitled to recover special damages which arise from circumstances peculiar to the particular case, where those circumstances were communicated to or known by the other party at the time the contract was made: Blagen v. Thompson, supra.
“Q. * * I will ask you how you paid, whether you paid the contract and ordinary price of labor, or whether you paid more than the workmen asked, how did you pay in that respect?
“A. I paid the rate — the prevailing price for wages. What I could secure men for.
“Q. In reference to materials, state whether you paid the market price or a price in excess to the market price.
“A. I paid the market price.
‘ ‘ Q. On all these materials.
“A. All these materials.”
The jury had a right to believe the testimony of Cummins. The testimony in the case does not warrant the objection made by plaintiff.
In the case at bar it appears Suetter, the surety by virtue of a contract executed by him with Cornwall in consideration of the benefits of the subcontract accruing to Cornwall at the date of the assignment, stepped into Cornwall’s shoes, so to speak, and for all practical purposes became the principal in the contract, with the assent of Cummins. Suetter placed a foreman in charge of the work on the highway and proceeded to carry out the contract. He is not in a position to assert that the contract of assignment with Cornwall has been annulled. The requested
Exceptions were saved to instructions of the court to the jury, as to the measure of damages. The court fully explained the issues and charged the jury in plain language in accordance with the law as above stated, and which in substance is contained in plaintiff’s brief. The case was fairly submitted to the jury. We have carefully examined all of the instructions to the jury and find no error therein. It appears that Mr. Suetter, unfortunately for him, signed Cornwall’s bond. There is some conflict in the testimony in regard to the conditions of the assignment. This controversy was thoroughly presented to the jury by the court’s charge, and determined by the verdict.
We find no error in the record. The judgment of the trial court is affirmed. Aeeirmed.