Erickson v. Brandt
| Decision Date | 07 April 1893 |
| Citation | 55 N.W. 62,53 Minn. 10 |
| Parties | Iver L. Erickson v. John Brandt et al |
| Court | Minnesota Supreme Court |
Argued October 28, 1892.
Appeal by plaintiff, Iver L. Erickson, from an order of the District Court of Hennepin County, Smith, J., made March 18, 1892 denying his motion for a new trial.
Defendant John Brandt contracted with plaintiff August 30, 1890, to make certain alterations and repairs upon plaintiff's house, No. 815 Sixteenth Avenue South, in Minneapolis, and was to receive therefor $ 1,050, and a conveyance of two lots in Minnetonka worth $ 1,000. Defendants John F. Peterson and Andrew Bergstrom on October 29, 1890, signed a bond as sureties with Brandt in the penal sum of $ 1,500, referring to the contract, and conditioned that if Brandt paid all bills for labor and materials, and held plaintiff's house free from liens, the obligation should be void, otherwise of force.
During the progress of the work upon the house, Brandt and plaintiff modified and departed from the contract without the knowledge or consent of the sureties, and Brandt furnished at plaintiff's request, extra materials and did extra work not provided for in the original contract, amounting in value to at least $ 150. The floors were changed from pine to hardwood, an arch was built under the front stairs, a woodshed built onto the rear of the house, new window and door casings put on in the second story, a larger and more expensive furnace put in, and other modifications were made and carried out.
Brandt failed to pay the mechanics and material men, and liens were filed and foreclosed, to the amount of $ 1,411.31, which plaintiff paid. He notified the obligors when the action to foreclose was commenced, and requested them to defend. They neglected to do so, and he defended, and incurred expenses and attorney's fees in so doing. He refused to convey the lots until repaid these liens and expenses. He brought this action upon the bond to recover the sums so paid. The Judge directed a verdict for the defendants Peterson and Bergstrom and charged that attorney's fees incurred in the lien suit should not be allowed. The jury found for the plaintiff against Brandt for $ 355.65, and that plaintiff should retain his lots.
Order denying new trial affirmed as to the defendants Peterson and Bergstrom, and reversed as to the defendant Brandt.
Hahn & Hawley, for appellant.
Where a creditor holds an obligation of sureties for the payment of a debt, and at the same time has other security which may be applied to the same purpose, it is the duty of the creditor to hold on to such security and not deliver it to the debtor for the reason that the sureties are, on payment of the debt entitled to be subrogated. Erickson could not safely convey these lots to Brandt until these liens were satisfied. If Peterson and Bergstrom were compelled to pay them, they were entitled to have the lots conveyed to them. Plaintiff was therefore correct in refusing to deed to Brandt, and the direction to return a verdict for the sureties cannot be justified on that ground. Lucas Co. v. Roberts, 49 Iowa 159; Weik v. Pugh, 92 Ind. 382.
Nor can it be justified on the ground that plaintiff paid Brandt the $ 400 before it was due. At most it was but a discharge pro tanto. Kiessig v. Allspaugh, 91 Cal. 231; Law v East India Co., 4 Ves. 829; Taylor v. Jeter, 23 Mo. 251; Cummings v. Little, 45 Me. 189; Wharton v. Duncan, 83 Pa. St. 40; Barrow v. Shields, 13 La. Ann. 57; Holland v. Johnson, 51 Ind. 346; New Hampshire Savings Bank v. Colcord, 15 N.H. 119; Hurd v. Spencer, 40 Vt. 581; Grow v. Carlock, 97 N.Y. 81; Guild v. Butler, 127 Mass. 386.
It is claimed that the contract with Brandt was modified and altered, and that the sureties are discharged for that reason. The trial court so held. But we beg leave to say that the evidence does not clearly show any such thing, and the jury, by the amount of their verdict, most emphatically deny it. The contract was not changed, but only certain minor details of the work, to which Brandt consented, without binding himself to conform to such changes, and without modifying the original contract. We submit this did not release sureties. Henricus v. Englert, 63 Hun 625. Whatever may be the conclusion as to Peterson and Bergstrom, a new trial must be granted as to Brandt, for the reason that Erickson was entitled to his reasonable expenses, including reasonable counsel fees, incurred in the defense of the lien suits; and it was error in the court to refuse to submit that matter to the jury. 1 Sutherland, Dam. 43; Inhabitants of Westfield v. Mayo, 122 Mass. 100; New Haven & N. Co. v. Hayden, 117 Mass. 433; Dubois v. Hermance, 56 N.Y. 673; Ryerson v. Chapman, 66 Me. 557; Call v. Hagar, 69 Me. 521; Allis v. Nininger, 25 Minn. 525.
C. C. Joslyn, for respondents.
The sureties in the bond knew of a certain definite contract between plaintiff and Brandt, and they obligated themselves to protect plaintiff against all liens arising from the work under that contract. It is absurd to contend, as plaintiff does, that this bond was to indemnify him against liens for the building of any house which Brandt might thereafter agree to build for plaintiff. After the execution of the bond, plaintiff and Brandt by agreement altered the original contract so as to require the house to be differently constructed, and so as to require extras not provided for in the original contract, costing $ 234.75 according to Brandt's testimony, and $ 150 according to plaintiff's testimony. This is a substantial amount, where the contract price for the house was only $ 2,050, and the alteration constitutes a departure from, and a modification of, the original contract. The sureties are in law thereby discharged. The sureties in such case have a right to say that they are not bound by the old contract, for that has been abrogated by the new; neither are they bound by the new contract, because they are not parties to it; neither can the contract be split into parts so as to be their contract to a certain extent, and not as to the residue. They are either bound in toto, or not at all. Tomlinson v. Simpson, 33 Minn. 443; Simonson v. Grant, 36 Minn. 439; Wager v. Brooks, 37 Minn. 392; Wheaton v. Wheeler, 27 Minn. 464; Allis v. Ware, 28 Minn. 166; Campion v. Whitney, 30 Minn. 177; Bragg v. Shain, 49 Cal. 131; Carson Opera House Ass'n v. Miller, 16 Nev. 327; Judah v. Zimmerman, 22 Ind. 388; Portage Co. Branch Bank v. Lane, 8 Ohio St. 405.
The cases cited by plaintiff all belong to the class in which the creditor has released some collateral security, by which release the surety has been injured, in which case the pro tanto doctrine was properly applied. But among them there is not a single case in which the contract has been modified or departed from by the creditor, and the courts have held that the sureties were not thereby absolutely discharged; or that they were only discharged pro tanto. Plaintiff paid $ 400 several months before the completion of the building, and thereby violated the contract, and took it out of the power of the sureties to control the application of the money to the payment of the liens. The plaintiff also neglected and refused to convey the real estate upon the completion of the building, and thereby violated his contract, and deprived defendant Brandt and his sureties of the means of applying the proceeds...
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