Norwegian Evangelical Lutheran Bethlehem Congregation v. United States Fidelity & Guaranty Company

• Decision Date: 24 May 1901
• Docket Number: 12,493 - (90)
• Citation: Norwegian Evangelical Lutheran Bethlehem Congregation v. United States Fidelity & Guaranty Company, 86 N.W. 330, 83 Minn. 269 (Minn. 1901)
• Parties: NORWEGIAN EVANGELICAL LUTHERAN BETHLEHEM CONGREGATION v. UNITED STATES FIDELITY & GUARANTY COMPANY and Another
• Court: Minnesota Supreme Court

86 N.W. 330

83 Minn. 269

NORWEGIAN EVANGELICAL LUTHERAN BETHLEHEM CONGREGATION v. UNITED STATES FIDELITY & GUARANTY COMPANY and Another

Nos. 12,493 - (90)

Supreme Court of Minnesota

May 24, 1901

Action in the district court for Hennepin county to recover $2,500 and interest, from defendantWilliam Siegmann, as principal and defendant company, as surety, upon an indemnity bond.The case was tried before Brooks, J., who directed a verdict in favor of plaintiff against both defendants for the sum demanded.From a judgment entered pursuant to the verdict defendant company appealed.Affirmed.

SYLLABUS

Surety Bond -- Increase of Cost of Building.

A provision in a surety bond to secure fulfilment of a contract to erect a church that alterations increasing its cost $300 are allowed restricted permissible changes in the plans to that amount, and, if such changes increased the cost to a larger sum, such changes would constitute a departure from the contract, and would release the surety company; following previous decision of this case in 81 Minn. 32.

Additional Stone Work.

Held, further, that, under the evidence in this case, certain resurfacing of the stone work on the walls of the church did not constitute a change or alteration in the contract or plans, for the reason that it was not demanded as a change by the owner of the building, but was required as a duty, under a proper construction of the contract, and was acquiesced in by the contractor as his own interpretation of the meaning of the plans and specifications.

Release of Surety.

In the construction of the church building, certain additional cost to the amount of $300 was incurred, which was not demanded by the owner of the building, and, under the facts disclosed, did not constitute such a change or alteration as relieved the surety company from the obligations of its bond.

Cobb & Wheelwright, for appellant.

A surety has the right to stand upon the literal and strict terms of his contract and to assume that such contract shall not be extended by implication nor as a consequence of what others may do in matters of which he has no notice.Cushing v. Cable,48 Minn. 3;Simonson v. Grant,36 Minn. 439;Pioneer Sav. & L. Co. v. Freeburg,59 Minn. 230;U.S. v. American B. & T. Co.,32 C.C.A. 420;U.S. v. Freel,92 F. 299, 301.It must be assumed that the building committee had knowledge of the refacing, which was not called for in the contract, because it was being done under the very eyes of the members of the committee.Scott v. Middletown,86 N.Y. 200.If the condition of the brownstone was such that under the terms of the contract it could not have been used without changing its face, then surely what Siegmann did to the face would constitute a "change."When the contract provides that the agreement for changes must be in writing, alterations made pursuant to verbal directions, without the surety's consent, release him.Stillman v. Wickham,106 Iowa 597;Beers v. Wolf,116 Mo. 179;Killoren v. Meehan,55 Mo.App. 427;Eldridge v. Fuhr,59 Mo.App. 44;Northern v. Kennedy, 7 N.D. 146.

John Lind and A. Ueland, for respondent.

OPINION

LOVELY, J.

This case has been in this court once before (81 Minn. 32, 83 N.W. 487), and comes here at this time upon appeal from a judgment in plaintiff's favor.Plaintiff is a religious corporation organized under G.S. 1894, § 3022, et seq.Defendant is engaged in the business of issuing surety bonds.One Siegmann is a contractor who entered into a written agreement with plaintiff by the terms of which he was to erect for plaintiff a church building in Minneapolis according to plans and specifications.The contract price was $9,042.Siegmann was required to furnish a bond for $2,500, conditioned for his faithful performance of the contract.Such a bond was executed by defendant corporation as surety.The condition of this bond provides,

"That if the said principal shall well, truly, and faithfully comply with all the terms, covenants, and conditions of said contract on his part to be kept and performed according to its tenor, and shall well and truly pay and discharge any and all liens for material furnished or labor performed in the building of said church whenever and as soon as any such lien is filed, then this obligation shall be void; otherwise, of full force and effect."

Siegmann having failed to perform his contract, mechanics' liens to the extent of $2,541.25 for unpaid materials were filed against the church building, which amount in excess of the contract price plaintiff was compelled to pay; and it is to recover this amount, with other damages, that this action is maintained.The surety company, as a defense, claim a departure from the terms of the building contract.

By a provision in the surety bond, as construed on the former appeal (81 Minn. 32, 83 N.W. 487) changes in the plans and specifications did not discharge the surety, unless the cost of the building was thereby increased more than $300.Upon the second trial changes were shown, some of which plaintiff admitted, but such admitted changes were less than $300.The real controversy here arises over two items of alleged changes.One was for resurfacing the brownstone on the exterior of the building, and the other was for building the front wall two feet higher than called for by the plans.Evidence as to the cost of the resurfacing, which defendant offered to show was $850, was excluded.The trial court took from the jury the question of the higher elevation of the front wall, which it is claimed increased the cost of the building $300, and directed a finding for plaintiff on that issue.After verdict for the plaintiff, judgment was entered thereon, from which the surety company appeals to this court.

Among the provisions of the building contract and specifications under which Siegmann constructed the church are the following...