Cowles v. U.S. Fidelity & Guar. Co.

• Decision Date: 26 June 1903
• Citation: 32 Wash. 120,72 P. 1032
• Court: Washington Supreme Court
• Parties: COWLES v. UNITED STATES FIDELITY & GUARANTY CO. et al.

72 P. 1032

32 Wash. 120

COWLES v. UNITED STATES FIDELITY & GUARANTY CO. et al.

Supreme Court of Washington

June 26, 1903

Appeal from Superior Court, Spokane County; William E. Richardson Judge.

Action by W. H. Cowles against the United States Fidelity & Guaranty Company and another. From a judgment for defendants plaintiff appeals. Reversed.

Stephens & Bunn, for appellant.

Dauson & Huneke, for respondent.

DUNBAR, J.

The defendant Creutzer entered into a contract in writing with appellant, whereby Creutzer agreed to construct a dwelling for appellant. The contract provided that Creutzer should give a surety bond in the sum of $3,000 to secure the performance of all the terms of the contract. Respondent became surety on the bond so required. Creutzer failed to comply with the contract. Appellant completed the work and brought this action to recover $3,000, which amount he alleges he paid, to complete the dwelling, in excess of the contract price. At the close of the evidence on the part of appellant (plaintiff below), the respondent surety company challenged the sufficiency of the evidence, and moved the court to discharge the jury from further consideration of the case, and direct what judgment should be entered, upon the following grounds: (1) That the evidence for the plaintiff shows that there are numerous alterations made in the contract and in the work, other than upon the written order of the architect; (2) that the value of these changes and alterations is not computed by the architects, as required by the contract, and the value thereof either added to or deducted from the contract price; (3) that the evidence shows that plaintiff and the contractor, Creutzer, entered into a distinct and separate agreement as to his compensation for all alterations other and distinct from the provisions of the contract; (4) that the evidence of the plaintiff shows that plaintiff released the contractor, Creutzer, from all liability on this bond; (5) that the evidence shows that, contrary to the provisions of the bond, plaintiff and the contractor made an agreement whereby certain grading was included and work provided in the contract, and it was not provided for therein; (6) that the evidence of plaintiff shows that a payment, to wit, that of $35, on account of the bond in this case, was made by the plaintiff, and certified by the architect as a proper charge under the contract. The court sustained the motion, on the ground that the changes were not ordered in writing, holding that as against the surety company the parties could not waive the provision of the contract which provided that all changes should be ordered by the architect in writing, and that the provision was manifestly made for the benefit of the surety company. Appellant excepted to the ruling of the court granting the motion and making the order in accordance therewith. The contract is too long to be set forth in detail, but it is the ordinary building contract in its general scope, and the bond is in form the ordinary surety bond given in such cases. The section of the contract which is the subject upon which the main controversy in this case arises is as follows: 'No alterations shall be made in the work shown or described by the drawings and specifications, except upon a written order of the architects, and, when so made, the value of the work added or omitted shall be computed by the architects, and the amount so ascertained shall be added to or deducted from the contract price. In case of dissent from such award by either party hereto, the valuation of the work added or omitted shall be referred to three disinterested arbitrators, one to be appointed by each of the parties to this contract, and the third by the two thus chosen, the decision of any two of whom shall be final and binding, and each of the parties hereto shall pay one-half of the expense of such reference.' This provision of the contract was waived by the contractor and the owner and the architect. Subsequently, however, the architect audited and certified the amount which should be paid for changes, extras, and alterations, and it is the contention of the appellant that such an act on the part of the contractor and principal in the bond was binding upon the respondent surety company, and a neglect or a default of any of the requirements of the written order of the architect cannot be taken advantage of by the respondent surety company; that the contractor was the general agent and representative of the surety, to act for it, and to waive, if he saw proper, on behalf of the surety company, anything within the purview of his agency.

There are no material contested questions of fact so far in this case, and its proper determination hinges upon the legal proposition announced above. It is contended by the appellant that a distinction exists between the liability of a noncompensated surety and that of a compensated surety; that the doctrine of strictissimi juris, which has been invoked successfully by accommodation bondsmen, should not apply to parties who furnish bonds for compensation. We have not been able to obtain any light from the cases cited from this court, any further than that they discountenance the old rule that there should be a difference in construction between bonds and other contracts, even in cases where the bonds were given purely as a matter of accommodation. We think, however on general authority, that,...