Martin v. Whites

• Decision Date: 17 December 1907
• Citation: 106 S.W. 608,128 Mo. App. 117
• Parties: MARTIN et al. v. WHITES et al.
• Court: Missouri Court of Appeals

106 S.W. 608

128 Mo. A. 117

MARTIN et al. v. WHITES et al.

St. Louis Court of Appeals. Missouri.

December 17, 1907.

1. PRINCIPAL AND SURETY — DISCHARGE OF SURETY—ALTERATION OF CONTRACT.

Though liability of a surety may not be extended beyond the strict terms of his contract, and any alteration in the terms by the principal parties thereto, without his consent, will discharge him, where, at the contractor's surety's request, the owner extended the time for the completion of the work, the surety was not discharged because the written contract was altered to show such extension, though he did not consent to the interlineation.

2. ALTERATION OF INSTRUMENTS—CONTRACTS— NECESSITY FOR CONSENT.

When parties agree upon a change in the terms of a contract, the contract is not invalidated because one of them, without the knowledge of the other, notes the alteration on the instrument.

3. PRINCIPAL AND SURETY—SURETY'S OBLIGATION—RULE FOR CONSTRUING.

Contract of suretyship must be construed reasonably, in the light of the parties' intent, and by the surrounding facts and circumstances.

4. APPEAL—REVIEW—REFEREE'S FINDINGS— CONCLUSIVENESS.

A referee's finding, if supported by substantial testimony, is conclusive on appeal.

5. PRINCIPAL AND SURETY — DISCHARGE OF SURETY—IMMATERIAL DEVIATIONS.

Though an obligee's act, which increases a surety's risk, discharges the surety, and though security held by the obligee to assure the discharge of the obligation, or any rights given the owner by a contractor in a building contract to secure its faithful performance inure to the contractor's surety, and he is discharged from liability to the extent of which the owner surrenders such securities otherwise than according to the contract or without the surety's consent, where a building contract provided that the contractor should be paid as the work progressed 80 per cent. of the price of the work done, upon the architect's certificates, the contractor's surety was not discharged because payments were made without such certificate where no payment was made in excess of such percentage; the surety not being prejudiced by the deviation from the contract.

Appeal from Circuit Court, Phelps County; Robt. Lamar, Special Judge.

Action by Herman Martin and others, trustees of the German Lutheran Congregation, etc., against W. Vas Whites and another. From a judgment for plaintiffs, the defendant surety appeals. Affirmed.

Watson & Holmes, for appellants. J. B. Harrison, for respondents.

NORTONI, J.

The suit is on a builder's bond. Plaintiffs recovered, and the defendant surety appeals. On the 1st day of June, 1904, the plaintiffs, trustees of the German Lutheran Congregation of St. James, Mo., entered into a contract in writing with one W. Vas Whites, a builder, whereby said Whites bound himself to furnish all of the materials, labor, etc., and erect for plaintiffs a certain house of worship situate at St. James, Mo. In conjunction with this contract, and of even date therewith, Whites executed to plaintiffs a bond conditioned that he would faithfully perform the contract, etc. The defendant Cox is surety on the bond. The contractor, Whites, breached the obligation of the building contract by failing to pay certain material bills, for which liens were filed against the building, and plaintiffs instituted this suit on the bond against Whites, the contractor, and Cox, his surety. The matter was referred to Hon. Chas. H. Shubert, a member of the bar, who, after hearing the testimony, found the issues for the plaintiffs, and recommended judgment against both defendants. The circuit court overruled defendants' exceptions, and entered judgment in accordance with the recommendations of the referee, and, from this judgment, the defendant surety only appeals.

The facts and arguments thereon as to whether or not this defendant is a principal or surety in the bond are precisely the same as those in another case now under submission. In this respect, the two cases being identical, it is unnecessary to restate the facts and reasoning thereon which have impelled us to adjudge the defendant Cox to be a surety, and not a principal, in the bond. The reasoning of the law, which essentially enforced this conclusion, is set forth in the opinion given in the case of Reissaus v. Whites (decided at this term of court, but not yet officially reported) 106 S. W. 603.

There are two propositions advanced on behalf of the defendant surety, either of which, it is argued, operated his discharge from the obligation assumed in the bond. It is first insisted that the defendant is discharged for the reason plaintiffs' agent, without his consent, made certain interlineations in the building contract, whereby its provisions were changed to conform to a new agreement made with the builder regarding the time in which the building should be completed, and thereby destroyed the identity of the contract. The rule is well established to the effect that a surety is a favorite of the law, and his liability is not to be extended or varied beyond the strict terms of his contract. "To the extent, and in the manner, and under the circumstances pointed out in his obligation he is bound, and no further." Therefore any alteration in the terms of the contract by the principal parties thereto, without the consent of the surety, will operate to discharge him therefrom, and, of course, the rule applies to the contract of suretyship evinced by a building bond the same as to any other surety. Miller v. Stewart, 9 Wheat. (U. S.) 681, 6 L. Ed. 189, s. c. 4 Wash. C. C. 26, Fed. Cas. No. 9,591; Ryan v. Morton, 65 Tex. 258; State ex rel. v. Tittmann, 134 Mo. 162, 35 S. W. 579; Evans v. Graden, 125 Mo. 72, 28 S. W. 439; Beers v. Wolf, 116 Mo. 179, 22 S. W. 620; Nofsinger v. Hartnett, 84 Mo. 549; Taylor v. Jeter, 23 Mo. 244; Warden v. Ryan, 37 Mo. App. 466; Killoren v. Meehan, 55 Mo. App. 427; Heim Brew. Co. v. Hazen, 55 Mo. App. 277; Mallory v. Brent, 75 Mo. App. 473; Chapman v. Eneberg, 95 Mo. App. 127, 68 S. W. 974; Swasey v. Doyle, 88 Mo. App. 536; Burnes' Estate v. Fidelity, etc., Co., 96 Mo. App. 467, 70 S. W. 518; Eldridge v. Fuhr, 59 Mo. App. 44; Fullerton Lumber Co. v. Gates, 89 Mo. App. 201; Ashenbroedel Club v. Finlay, 53 Mo. App. 256; Bowman v. Globe Heating Co., 80 Mo. App. 628; Lloyd on Building, § 69; 27 Amer. & Eng. Ency. Law (2d Ed.) 494-495; Brandt on Suretyship (3d Ed.) § 460. The contract, which is parcel of the bond, of course, required the building to be completed by August 15, 1904. It appearing that this stipulation could not be complied with, Whites, the contractor, called upon plaintiffs' agent and requested one week more time. Plaintiffs' agent suggested an extension of two weeks instead. The suggestion of two weeks was discussed, and, although not then agreed upon, was found to be satisfactory to both parties. On the following day Mr. Cox, the surety, requested the plaintiffs' agent to grant Whites such additional time as he required, which request was assented to, and in conformity therewith plaintiffs' agent, without either the contractor or surety being present, and without their knowledge, interlined in the written contract next after the provision requiring the building to be completed August 15th, as follows: "(Altered to August 29th, 1904.)" The argument advanced is that even though the surety requested the plaintiffs' agent to grant Whites such additional time as he might desire, and even though the additional time desired by Whites would expire on August 29th, these facts did not authorize plaintiffs' agent to write into the contract the words: "(Altered to August 29th, 1904.)" It is said, admitting the proper construction to be that the surety requested an extension of time to the contractor, expiring August 29, 1904, he is nevertheless discharged by the act of plaintiffs' agent in altering the contract when he neither requested nor consented to the act of interlineation, for the reason such interlineation destroyed the identity of his contract. The whole argument proceeds upon the idea that defendant should have consented to the alteration in the writing rather than to the extension of time which was the change in the contract. In view of the fact that defendant requested the extension of time, and thus voluntarily consented to the modification of his original undertaking to that extent, we are not impressed with the argument that his consent—or, in other words, the contract as modified with his consent—is to be defeated for the reason that plaintiffs, without express authority from defendant, noted the substance of the modification upon the writing. It is true the alteration changed the terms as expressed by the original writing, but it only changed them in conformity to the modified contract as made by the principal parties and consented to by the surety; and, while it destroyed the identity of the surety's original contract, it indicated the truth with respect to the identity of the modified contract to which the surety had given his consent. It is the law that when the parties have agreed upon a change in the terms of a contract, as in this case, the contract will not be invalidated by one of the parties, without the knowledge of the other, noting the alteration on the instrument. See Phillips v. Crips, 108 Iowa, 605, 79 N. W. 373; Wardlow v. List, 41 Ohio St. 414; Kane v. Herman, 109 Wis. 33, 85 N. W. 140; 2 Cyc. 156.

2. The second proposition advanced by defendant for a reversal of the judgment predicates upon the fact that the owner paid to the builder certain of the funds due him without certificates of the architect, when the contract provided for payment only upon such certificates. It is argued because of this the defendant is discharged, for the reason that such payments were made in violation of the terms of the contract. In other words, the payment of these moneys to the contractor by the owner without the certificates of the architect...