City of Milbank v. Western Surety Co.

• Decision Date: 02 April 1907
• Citation: 111 N.W. 561,21 S.D. 261
• Parties: CITY OF MILBANK v. WESTERN SURETY CO.
• Court: South Dakota Supreme Court

111 N.W. 561

21 S.D. 261

CITY OF MILBANK v. WESTERN SURETY CO.

Supreme Court of South Dakota

April 2, 1907

Appeal from Circuit Court, Grant County.

Action by the city of Milbank against the Western Surety Company. From a judgment for plaintiff, defendant appeals. Affirmed.

Joe Kirby, for appellant.

Geo. S Rix, Thad L. Fuller, and Thos. L. Bouck for respondent.

CORSON J.

The plaintiff, the city of Milbank, instituted this action against the defendants to recover on the bond executed by them the amount of loss sustained by the plaintiff by reason of the defendant McDonald's failure to carry out his contract to construct a system of sewerage in that city. A directed verdict and judgment being in favor of the plaintiff, the defendant, the Western Surety Company, has appealed.

A large number of errors are assigned on the part of appellant, but the grounds upon which a reversal is claimed are grouped and summarized by counsel for appellant in his brief, and thus stated by him: (1) The bond declared on was given to secure the performance of a contract made by a corporation, namely the Sioux Falls Construction Company, whereas plaintiff is endeavoring to hold us for the default of one A. D. McDonald (2) the complaint failed to allege that the form of the contract for constructing the sewer was approved by the city attorney; (3) there is no allegation in the complaint that any preliminary measures such as are required by statute before installing a sewerage system were complied with; (4) because neither A. D. McDonald, nor the Sioux Falls Construction Company, although principals, was served with summons nor made parties to this action, nor is any reason shown for such failure; (5) because the city records fail to disclose that an affirmative vote was taken by the city council upon letting the contract for the performance of which, the bond in suit was executed; (6) because the evidence affirmatively shows that, without readvertising for bids, the city council let the contract in question for $1,000 more than the bid made by McDonald, and that the same was therefore illegal and void; and (7) the testimony fails to sustain the complaint in its entire scope and meaning.

It is disclosed by the record that the city of Milbank, in the summer of 1904, undertook the construction of a sewerage system, and that the contract for the same was let to one A. D. McDonald. To secure the performance of the contract of the said McDonald the appellant executed a bond with the Sioux Falls Construction Company in the sum of $7,000 for the faithful execution of such contract. The contract was let to McDonald, as the lowest bidder, for the sum of $11,276.35; but before the said contract was executed McDonald, claiming that he had made a mistake in his bid was awarded a further sum of $1,000, without any new advertisement for bids having been made. McDonald entered upon the performance of the contract and, after completing about 500 feet of the main sewer, he abandoned the same, giving the city notice that he would proceed no further. Thereupon the city notified the appellant company of such default within the time specified in the bond, and thereafter proceeded to construct the sewerage system without making any new contract and completing the same at the extra expense of about $1,700, over and above the contract price agreed upon with McDonald. Demand having been made by the plaintiff upon the appellant for the extra amount so expended, over and above the amount specified in the McDonald contract, and the appellant failing to pay such sum, this action was instituted to recover the same. On the trial of the action the defendant objected to the introduction of any evidence on the part of the plaintiff on the ground that the complaint did not state facts sufficient to constitute a cause of action. The objection was overruled by the court, and plaintiff's evidence admitted to which ruling the appellant duly excepted.

It is contended by the appellant that the complaint is insufficient, for the reason that it is sought to hold the appellant responsible for the acts of A. D. McDonald, whereas in the bond it became surety only for the Sioux Falls Construction Company; but it is alleged in the complaint "that at the times hereinafter mentioned the defendant A. D. McDonald, was doing business, and executed the contract hereinafter mentioned under the name and style of the Sioux Falls Construction Company." This we think was clearly sufficient as showing...