C. A. Burton Machinery Co. v. National Surety Co.
| Decision Date | 07 February 1916 |
| Docket Number | No. 11820.,11820. |
| Citation | 182 S.W. 801 |
| Parties | C. A. BURTON MACHINERY CO. v. NATIONAL SURETY CO. |
| Court | Missouri Court of Appeals |
Appeal from Circuit Court, Jackson County; Thomas J. Seehorn, Judge.
"Not to be officially published."
Action by the C. A. Burton Machinery Company against the National Surety Company. Judgment for plaintiff, and defendant appeals. Affirmed.
Frank Hagerman, Clyde Taylor, and Samuel R. Freet, all of Kansas City, for appellant. Griffin & Orr, of Kansas City, for respondent.
The firm of Lewis & Kitchen, of Kansas City, was the contractor for the heating and ventilating apparatus to be furnished and installed in the reconstructed and enlarged high school building of Ft. Smith, Ark., at the contract price of $41,720. The contract was made by the board of education, as party of the first part, with the contractor, as party of the second part, and the defendant herein signed said contract, as party of the third part. In addition to the various stipulations relative to the furnishing and installing of said plant, the contractor agreed with the school board to pay all parties furnishing labor or materials used in the work. And for the faithful performance of all the terms, agreements, stipulations, conditions, and covenants in said contract the contractor, as principal, and the defendant, as surety, in consideration of all the premises, jointly and severally bound themselves in the sum of $10,430. The instrument contained a further provision that this bond feature of the contract should inure to the benefit of those who had supplied material for, or performed labor on, said work, whether by subcontract or otherwise.
Plaintiffs, with knowledge of said contract and bond, sold to the contractor material which was used on and went into the plant contracted for, to the amount of $3,328.38, after all proper credits had been given. The contractor failed to pay for said material, and in December, 1913, went into bankruptcy before the completion of their job. Within the time provided in the contract and bond the plaintiff brought this suit on same to recover for said material so furnished.
The answer was: First, a general denial; second, that the contractor had fully paid plaintiff for said material; and, third, that plaintiff did not keep a separate account of material sold to the contractor for said school building, but commingled said account with other accounts for materials sold the contractor and furnished other buildings to which the contract and bond in suit had no application, that plaintiff took notes from the contractor aggregating the grand total of all said accounts, and that the contractor made indiscriminate payments thereon, and gave renewal notes for the balance due, so that it was impossible to tell on which of said accounts the payments made should be applied. These two affirmative defenses were denied by the reply.
A jury being waived, the case was tried by the court, and special findings of fact were made. The judgment was for plaintiff in the full amount sued for. The court found that defendant signed the contract and bond in consideration of certain premiums paid to it, and that it was a surety for hire. The court also found that the materials described and sued for in plaintiff's petition were furnished to the contractor for, and they actually went into, the said high school heating and ventilating system, and that they had not been paid for. The evidence unquestionably established these facts, and there was nothing to the contrary as the defendant introduced no evidence; so that, if the defendant can escape liability, it can do so only upon one of the defenses raised in its answer.
Defendant cannot escape liability because the plaintiff did not file with the circuit clerk of the county in which the high school building is located a "just and true account" of its indebtedness and "a correct description of the property to be charged with said lien." Section 4981 of article 2 of chapter 101, Arkansas Statutes 1904, demands this requirement of one who seeks to obtain a lien upon the property improved. But in this case plaintiff is not seeking to secure a lien. The act of 1911 of the Arkansas Legislature (Session Acts Ark. 1911, p. 462) adding three sections to said article 2 which provide for a bond in favor of those furnishing labor or materials upon a public building (to which no lien can attach) does not require the account to be filed with the clerk. And, even if the addition to said article in 1911 does become such a part of the laws of 1904 as to make the whole the same as if it had been originally enacted that way, still the requirement that a true account and a description of the property shall be filed in the circuit clerk's office has reference to those who would avail themselves of the lien given by said article, and not to those suing on a bond given in lieu of a lien where the improvement is a public building on which no lien can be had. Besides, the contract and bond in this case does not have to depend upon any statute to give either validity to defendant's engagement or a right of action thereunder to the plaintiff. The contract and bond itself is sufficient for that purpose as a common-law contractual obligation. And it would seem that this is what the instrument sued on herein really is, since it differs from the bond prescribed in the statute in a number of particulars as to amount and otherwise.
The mere fact that plaintiff took notes from the contractor will not discharge the defendant from liability. The court found that the notes were merely unsecured collateral, and were not accepted as payment of said account. And, unless they were, the mere taking of the notes would not discharge the defendant. First Nat. Bank v. Leavitt, 65 Mo. 562, loc. cit. 566; United States ex rel. v. Axman (C. C.) 153 Fed. 982. Even in a case where a materialman's lien is sought, the taking of a note merely as security does not of itself release the lien. Kauffman Lumber Co. v. Christophel, 62 Mo. App. 98. The slight extension of time impliedly involved in the taking of the notes and the renewal thereof would not release the defendant in this case, where the defendant is jointly and severally bound with the principal. Yates v. Donaldson, 5 Md. 389, 61 Am. Dec. 283; Guaranty Co. v. Pressed Brick Co., 191 U. S. 416, 24 Sup. Ct. 142, 48 L. Ed. 242; Doll v. Crume, 41 Neb. 655, 59 N. W. 806; Shaw v. McFarlane, 23 N. C. 216; Baglin v. Title Guaranty & Surety Co. (C. C.) 166 Fed. 356. The reason an extension of time granted a principal without the consent of the surety releases the latter is because the surety is bound only by the terms of his written contract, and, if those are varied without his consent, it is no longer his contract. 1 Brandt on Suretyship & Guaranty, § 376, p. 720. But in the case at bar the contract specified no time when the contractor should pay the bills. As to the school board and as to the plaintiff, the contractor and defendant agreed that they would pay the bills unconditionally; that is, without any stipulation or condition therein that the defendant would do so if the contractor did not pay them when they became due. It cannot be said that this would be implied, because the implication is the other way, since all through the contract and...
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