Barton v. Title Guaranty & Surety Co.

• Decision Date: 06 March 1916
• Docket Number: No. 11843.,11843.
• Citation: 192 Mo. App. 561,183 S.W. 694
• Parties: BARTON v. TITLE GUARANTY & SURETY CO. et al.
• Court: Missouri Court of Appeals

183 S.W. 694

192 Mo. App. 561

BARTON v. TITLE GUARANTY & SURETY CO. et al.

No. 11843.

Kansas City Court of Appeals. Missouri.

March 6, 1916.

Appeal from Circuit Court, Jackson County; Thos. J. Seehorn, Judge.

Action by Pearl Lee Barton against the Title Guaranty & Surety Company and others. From a judgment for plaintiff, defendant named appealed to the Supreme Court. Cause transferred to the Kansas City Court of Appeals on respondent's motion. Affirmed.

Wendell H. Cloud and Sam R. Halstead. both of Kansas City, for appellant. McCune, Harding, Brown & Murphy and R. B. Caldwell, all of Kansas City, for respondent.

JOHNSON, J.

This is a suit on a building contractor's bond on which the appealing defendant, the Title Guaranty & Surety Company, was a surety for hire. The referee to whom the circuit court referred the case filed his report consisting of findings of fact and conclusions of law in which he found that plaintiff was entitled to recover against the surety her demand for disbursements she had made to protect her property from mechanic's liens for materials, etc., used by the contractors in the construction of the building, but was not entitled to recover attorneys' fees she had incurred in that behalf. The court overruled defendant's exceptions, and rendered judgment for plaintiff accordingly. Defendant was allowed an appeal to the Supreme Court, but on motion of respondent the cause was transferred to this court.

There is a serious question urged by plaintiff of the sufficiency of the exceptions filed to the report of the referee to raise any issue, either of fact or law, but, since we are satisfied that the case was properly decided on the merits, we shall pass the decision of that question, which otherwise could not be ignored.

In November, 1910, plaintiff entered into a contract in writing with Morris & Kemp, contractors, for the construction of a building in Kansas City according to designated plans and specifications, at a cost of $17,862, subject to additions and deductions for extra work. Progress payments on the contract price were to be made from time to time on certificates of the architect, the basis of such payments to be 85 per cent. of the estimated value of the work the certificates stated had been done. The final payment was to be made in 15 days after the completion of the work. The bond in suit was given by the contractors to secure the performance of this contract, which, of course, required the contractors to pay for the labor and materials that were employed and used in the construction of the building. The referee found and the finding is not disputed that the total contract price, including extras, was $19,147; that from time to time plaintiff paid the contractors on certificates of the architect the total sum of $16,700, which was $425.05 in excess of 85 per cent. of the entire contract price; that the contractors failed to pay for certain materials used in the building amounting to $8,857.47; that neither the architect nor plaintiff had knowledge of such breach of the contract until after the certificates were issued by the architect and paid by plaintiff; and that, when such knowledge came to them, plaintiff withheld the final payment of $2,447, and used that sum to discharge claims for materials. The architect testified that he inspected the work during its progress, issued the certificates on the basis of what he considered to be 85 per cent. of the value of work done at the time, and that, when he questioned them about the payment of materials, the contractors informed and satisfied him that the materials were being paid for.

The contract provided:

"Such sum shall be paid by the owner to the contractors, in current funds, and only upon certificates of the architect, as follows: From time to time, as the work progresses, on the certificate of the architect, eighty-five per cent. (85%) of the value of the work done. The final payment shall be made within fifteen days after the completion of the work included in this contract, and all payments shall be due when certificates for the same are issued. If at any time there shall be evidence of any lien or claim for which, if established, the owner of the said premises might become liable, and which is chargeable to the contractors, the owners shall have the right to retain out of any payment then due or thereafter to become due an amount sufficient to completely indemnify her against such lien or claim. Should there prove to be any such claim after all payments are made, the contractors shall refund to the owner all moneys that the latter may be compelled to pay in discharging any lien on said premises made obligatory in consequence of the contractor's default.

The principal contention of defendant is that it was released from the obligation of the bond by the acts of the architect in issuing, and of plaintiff in paying, to the contractors certificates in excess of 85 per cent. of the actual value of the work done when such respective certificates were issued.

The Supreme Court, in Lackland v. Surety Co., 256 Mo. 133, 165 S. W. 314, and this court in Rule v. Anderson, 160 Mo. App. 347, 142 S. W. 358, and Boppart v. Surety Co., 140 Mo. App. 683, 126 S. W. 768, hold that the doctrine that a surety is a favorite of the law and entitled to the benefit of strictissimi juris does not apply where the bond is executed for a consideration by a corporation engaged in such business for profit. Counsel for defendant point, in their brief, to section 1209, R. S. 1909, which provides:

"Such surety company may be released from its liability, on the same terms and conditions as are by law prescribed for the release of individuals, it being the true intent and meaning of sections 1209 to 1211...