Drumheller v. American Sur. Co.

• Decision Date: 29 December 1902
• Citation: Drumheller v. American Sur. Co., 71 P. 25, 30 Wash. 530 (Wash. 1902)
• Court: Washington Supreme Court
• Parties: DRUMHELLER et al. v. AMERICAN SURETY CO. OF NEW YORK et al.

71 P. 25

30 Wash. 530

DRUMHELLER et al. v. AMERICAN SURETY CO. OF NEW YORK et al.

Supreme Court of Washington

December 29, 1902

Appeal from superior court, Spokane county; William E. Richardson Judge.

Action by J. L. Drumheller and A. A. Barnett against A. Rief, Frank Schiefer, and the American Surety Company of New York.Judgment for plaintiffs against all the defendants, and the surety company appeals.Affirmed.

C. S. Voorhees and Reese H. Voorhees, for appellant.

Crow &amp Williams, for respondents.

Article 8 of the contract referred to in the opinion reads as follows: 'The owner agrees to provide all labor and materials not included in this contract in such manner as not to delay the material progress of the work, and, in the event of failure so to do, thereby causing loss to the contractor agrees that he will reimburse the contractor for such loss and the contractor agrees that, if he shall delay the material progress of the work so as to cause any damage, the amount of such loss or damage to either party shall, in every case, be fixed and determined by the architect, or by arbitration, as provided in article three of this contract.'

ANDERS J.

This was an action instituted by the respondents against the defendants Rief and Schiefer, as principals, and the American Surety Company of New York, as surety, on a bond executed by said principals and said surety for the faithful performance of a contract which the said principals had entered into with the respondents for the construction of a certain building in the city of Spokane.The bond in question is in the sum of $4,000, and the respondents(plaintiffs below) by this action seek to recover the damages alleged to have been sustained by them by reason of the failure of the said contractors, Rief and Schiefer, to perform their said contract according to its terms and conditions.The contract involved herein is in writing, and the execution of the bond and agreement by the respective parties designated therein is admitted.It appears that the said Rief and Schiefer (hereinafter called the 'contractors') undertook and agreed, under the direction and to the satisfaction of John K. Dow, architect, acting as agent for the owners (respondents), to provide all the materials and perform all the work mentioned in the specifications and shown on the drawings prepared by the said architects for the four-story and basement brick and stone building situated at the corner of Front and Howard streets, Spokane, Wash., including everything necessary to complete the building, except the heating and plumbing, for the sum of $14,900, which sum the respondents agreed to pay at the times and upon the conditions set forth in the written agreement.The specifications of the architect called for the construction of an asphalt sidewalk around designated portions of the building, and it seems to have been understood by all parties that such sidewalk was included in the building contract, though not expressly mentioned therein.This contract was entered into in July, 1899, and article 6 thereof provides that 'the contractor shall complete the whole of the work comprehended in this agreement on or before the 1st day of December, 1899, provided that possession of the premises be given him on or before the 26th day of July, 1899,' and that 'time is made the essence of this contract, and for every day that said contractor fails after the time herein limited to complete said work herein mentioned he shall pay to the owner, as liquidated damages for such delay, the sum of ten dollars per day until the work is completed.'And in article 3 it is stipulated that: 'Alterations may be made in the work herein provided for, but no alterations shall be made in the work shown or described by the drawings and specifications, except on a written order of the architect, and, when so made, the value of the work added or omitted shall be computed by the architect, and the amount so ascertained shall be added to or deducted from the contract price.In the case of dissent from such award by either party hereto, the valuation of the work added or deducted 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.'The contract also provided that if, at any time, there shall be evidence of any lien or claim for which, if established, the owner of the premises might become liable, and which is chargeable to the contractor or subcontractor, the owner shall have the right to retain out of any payment then due or thereafter to become due an amount sufficient to completely indemnify him against such lien or claim; and that, if there be any such claim after all payments are made, the contractor 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.'It is further stipulated in the contract (article 7), in effect, that, should the contractor be delayed in the prosecution or completion of his work by any act, neglect, delay, or default of the owner or the architect, or any other contractor employed by the owner, or any damage which might happen by fire, lightning, earthquake, or cyclone, then the time fixed for the completion of the work should be extended for a period equivalent to the time lost by reason of any or all of said causes; but no such allowance should be made unless a claim therefor should be presented to the architect in writing within 24 hours after the occurrence of such delay, and that the duration of such extension should be certified to by the architect; but the right was reserved by the parties to appeal from his decision to arbitration, as provided in article 3 of the contract.

The respondents alleged in their complaint, in substance, among other things: That they were the owners of certain land in the city of Spokane, which they specifically described.That on July 27, 1899, they entered into a contract in writing with the defendants Rief and Schiefer, whereby the said defendants agreed to erect and construct a four-story building upon said real estate for the plaintiffs, which contract was attached to and made a part of the complaint.That on the 29th day of July, 1899, the said defendant the American Surety Company of New York, for the purpose of guarantying the performance of said contract by the said Rief and Schiefer, executed and delivered to the plaintiffs its bond of indemnity, which bond is set out in extenso in the complaint, and contains the following recitals: 'The condition of this obligation is such that whereas, a contract and agreement has been made and entered into between the above-bounden principals and J. L. Drumheller and A. A Barnett for the construction of a four-story and basement brick and stone building situated on part of lots one (1) and two (2), block two (2), Resurvey and Addition to Spokane, Washington, including everything to complete the building, except the heating and plumbing, a true copy of which said agreement is hereto annexed and made a part hereof: Now, therefore, if the said above-bounden principals shall and will fully and competely perform all the conditions of said contract hereto annexed faithfully in every respect, and shall pay for all materials furnished and labor performed in the execution of said contract, to the parties entitled thereto, and all damages, expenses, and charges due to J. L. Drumheller and A. A. Barnett under said contract by reason of the nonperformance thereof strictly and literally as in said contract provided, then this obligation to be void; otherwise to be and remain in full force and effect.'That defendants, Rief and Schiefer, duly entered upon the performance of said contract, and completed the building, but failed to complete the same within the time required by said contract, and did not complete it until the 1st day of March, 1900.'That by the terms of said building contract these plaintiffs were to pay said Rief and Schiefer for the construction of said building, including the laying of an asphalt sidewalk around said building in accordance with the plans and specifications prepared by J. K. Dow, architect, the total sum of $14,900.That afterwards these plaintiffs determined to construct a cement sidewalk around said building, instead of said asphalt sidewalk, and by agreement then entered into between these plaintiffs and the said A. Rief and Frank Schiefer, with the consent of said American Surety Company of New York, it was agreed that these plaintiffs should construct said cement sidewalk themselves at their own expense, and that said Rief and Schiefer, by reason of being relieved from constructing said asphalt sidewalk, should allow plaintiffs the sum of $375 on said contract price for said building.'That during the progress of the construction of the said building the plaintiffs from time to time made payments to said Rief and Schiefer upon estimates made by J. K. Dow, architect, aggregating the sum of $12,464.That when said building was completed the plaintiffs learned that the contractors, Rief and Schiefer, had incurred large bills and liabilities for labor performed upon and materials used in the construction of said building, which plaintiffs requested the said Rief and Schiefer and the said American Surety Company to fully pay and settle, but all of said defendants have neglected and refused to pay the same.That by reason of the nonpayment of said bills the various parties who had furnished said labor and material in the construction of said building...