City Council of Greenville v. Ormand
| Decision Date | 10 November 1897 |
| Parties | CITY COUNCIL OF GREENVILLE v. ORMAND et al. |
| Court | South Carolina Supreme Court |
Appeal from common pleas circuit court of York county; Ernest Gary Judge.
Action by the city council of Greenville against G. C. Ormand and others on a bond of suretyship. From judgment in favor of plaintiff, certain defendants appeal. Reversed.
Hart & Hart, Finley & Brice, and C. E. Spencer, for appellants.
J. A McCullough and Wilson & Wilson, for respondent.
This is a case involving the right of sureties. On the 19th day of March, 1892, G. C. Ormand and W. L. Goforth entered into a contract with the city council of Greenville to perform certain work for said city in digging trenches for sewerage and on same day Ormand & Goforth, with appellants as sureties, entered into a bond for faithful performance. Among other things, it was stipulated in the contract that In the specifications made a part of the contract it was provided that "the engineer, on the last day of each month, will estimate the amount of work completed according to the specification, and ninety per cent. of the amount due will be paid the contractor on or before the 5th day of the following month." Before the completion of the work, Goforth died, and on the 12th day of August, 1892, the surviving member of the firm, Ormand, entered into another agreement with the city council of Greenville changing in some respects the original contract. In this last agreement, which also provided for an increase of the price to be paid for certain work, it was stipulated On the 30th day of August, 1892, the sureties, in writing under seal, consented to the change in the original contract, and agreed that said bond should also cover "any amount that Ormand or Goforth or G. C. Ormand, surviving partner, may be due the city of Greenville upon final settlement with the same for money advanced in the purchase of tools and dynamite used or to be used in the work named in the original contract," etc. The final estimate showed that the amount done by the contractors was $33,948.94, of which $15,000 of work was done before the amended contract and $18,948.94 after. The amount paid out by the city of Greenville for tools and dynamite was $2,158.02, and this suit is to recover this sum. The city of Greenville paid the contractors the full amount of the estimate, with out regard to the 10 per cent. reserve, without deducting the amount due for tools and dynamite, and this was done without the consent of the sureties. The sole question presented here is whether, under these circumstances, the sureties ought to be held discharged. We think the sureties are discharged.
1. The disregard by the creditor of the provision for the reservation of 10 per cent. of the amount due on the engineer's estimate was a material variation of, or departure from, the contract. The surety is bound, and only bound, "to the extent and in the manner and under the circumstances pointed out in his obligation," as stated by Mr. Justice Story in Miller v. Stewart, 9 Wheat. 703. This principle is recognized by all the authorities. Nor is it essential that the alteration of the contract should be injurious to the surety. The surety is bound by the contract which he makes, not by some contract which he did not make, even though the latter may be more favorable than the former. Jackson v. Patrick, 10 S.C. 197; Gardner v. Gardner, 23 S.C. 592. The contract made by the sureties expressly provided for the 10 per cent. reserve. It is a mistake to suppose that this provision was inserted for the benefit of the city of Greenville alone, and that the city might waive it. It was designed to secure the satisfactory completion of the work according to the specifications of the contract, for which the sureties were liable, and was for their benefit as well as for the benefit of the city. The principals dealt with each other as if there was nothing whatever in the agreement in reference to the 10 per cent. reserve, in effect striking that provision from the contract. This the principals could do, so far as they were concerned, but not so far as the sureties are concerned. The good motive which actuated the city council in disregarding this provision, viz. to enable the contractor to continue the work, cannot help the city in this contention, since it failed to do what was essential to bind the sureties,--procure their consent. It may be that the payment to the contractor in full without regard to the stipulated reserve kept the work going to completion, and in this way was beneficial to the sureties; but, as shown above, the surety's liability on a contract materially altered by the principal is not to be determined by ascertaining whether he was injured or benefited by the alteration, but by the fact of alteration. It is quite easy to understand why the sureties in this case might not have signed the contract except for the provision as to the 10 per cent. reserve. If by reason of the death or insolvency of the contractor the work should stop, and it should become the duty of...
To continue reading
Request your trial