McConnell v. Poor

• Decision Date: 24 January 1901
• Citation: 113 Iowa 133,84 N.W. 968
• Parties: MCCONNELL v. POOR.
• Court: Iowa Supreme Court

113 Iowa 133

84 N.W. 968

MCCONNELL

v.POOR.

Supreme Court of Iowa.

Jan. 24, 1901.

Appeal from district court, Des Moines county; James D. Smyth, Judge.

Evans entered into a contract with plaintiff, July 14, 1891, to construct a dwelling house for him, and on the same day executed a bond, with defendant as surety, conditioned “that, if the said Evan F. Evans shall duly perform said contract, then this obligation is to be void, but, if otherwise, the same to be and remain in full force and virtue.” The house was built, and in 1892 Evans began an action against the plaintiff for a balance due. McConnell filed a cross petition, in which he averred several breaches of the contract, and prayed for damages. The result was a judgment against Evans for $943, to recover which this action was brought against the defendant as surety on the bond. By way of defense, he pleaded alterations in the contract in four particulars: (1) That the work was done under the direction of McConnell, instead of Sunderland, the architect, as agreed; (2) the broken ashlar work was constructed with close joints, instead of being tuck pointed, as stipulated; (3) the increased cost occasioned by this change was not estimated at the rate at which the work was taken, and added to the amount to be paid, as exacted by the terms of the contract; and (4) other changes were made without estimating the increased cost, as required in the agreement. To these defenses the plaintiff pleaded adjudication in Evans against McConnell as an estoppel. The defendant also answered that he had advanced, in payment of labor and material, with McConnell's knowledge and consent, a large amount of money, and was released from liability on the bond to that extent. Trial to jury, and from judgment on a verdict against him the plaintiff appeals. Affirmed.Kelley & Cooper and Blake & Blake, for appellant.

Seerley & Clark and A. M. Antrobus, for appellee.

LADD, J.

How far will a surety on a bond be bound by a judgment against his principal alone? There is no little confusion in the language of the courts on this subject, and entire harmony does not prevail in the decisions. This has resulted sometimes in treating such a judgment as res adjudicata in an action against the surety, rather than passing on the character of the contract, and simply holding him to its performance. It is a fundamental principle in jurisprudence that every man shall have his day in court, and shall be heard in his own defense, and of this right he may not, under the constitution and laws of this state, be deprived. For this reason, judgment against the principal may never foreclose investigation of the surety's liability, unless, by virtue of the latter's undertaking, he has obligated himself directly or by implication to be bound thereby. Where, by the terms of the bond, the surety is to be bound by the litigation to which he is not a party, the courts decide, not that the judgment is an adjudication, because of the connection, but that he must perform the contract as it is written. Bank v. Read, 86 Iowa, 136, 53 N. W. 96. The only ground on which sureties on official bonds generally may be regarded as bound by the judgments against their principals is that the sureties by the terms of the bond agree, expressly or impliedly, to abide the result of litigation against their principals. This principle is well stated in Stephens v. Shafer, 48 Wis. 45, 2 N. W. 835: “The nature of the contract in official bonds is that of a bond of indemnity to those who may suffer damages by reason of the neglect, fraud, or misconduct of the officer. The bond is made with full knowledge and understanding that in many cases such damages must be ascertained and liquidated by an action against the officer, for whose acts the sureties make themselves liable, and the fair construction of the contract of the sureties is that they will pay all damages so ascertained and liquidated in an action against their principal.” See, also, Masser v. Strickland, 17 Am. Dec. 668. This court held in Charles v. Hoskins, 14 Iowa, 471, that judgment against a sheriff might be received in evidence as fixing, prima facie, the liability of the surety. True, other reasons for so holding than here suggested were assigned. But the doctrine of stare decisis has no application to the reasons given for reaching the conclusion; it is limited to the very point decided. The fallacy in the reasoning of that case, as well as City of Lowell v. Parker, 10 Metc. (Mass.) 309, 43 Am. Dec. 436, on which it was based, lies in supposing that, because the surety may claim the benefit of a judgment in favor of his principal, it follows that he is concluded by one against him. But the surety is discharged by a finding for his principal, not owing to the creditor being estopped, but for that it establishes the absence of liability of the principal; and, if he is not liable, the surety cannot be, as his obligation is merely incidental to that of the principal. Besides, the discharge of the principal does not always release the surety. If the former be an infant when executing an instrument, and is discharged on that ground, the surety may yet be held. Bank v. Hall, 106 Iowa, 540, 76 N. W. 832. To the point is this language, found in Jackson v. Griswold, 4 Hill, 528: “No doubt * * * a decision against the debt would discharge him [the surety]. That view is not on the ground that he is a party, but because the judgment or decree extinguished the debt; and, the principal thing being destroyed, the incident--the obligation of the surety--is destroyed with it. The effect is the same as a release by the creditor or a payment by the debtor.”

It is sometimes urged that, as the surety has become responsible for the debt or good conduct of the principal, judgment establishes the fact on which the surety's liability rests. A complete answer to this is that the fact has not been...