Prescott Nat. Bank v. Head

• Decision Date: 25 March 1907
• Docket Number: Civil 992
• Citation: 11 Ariz. 213,90 P. 328
• Parties: PRESCOTT NATIONAL BANK, Defendant and Appellant, v. A. J. HEAD, Plaintiff and Appellee
• Court: Arizona Supreme Court

90 P. 328

11 Ariz. 213

PRESCOTT NATIONAL BANK, Defendant and Appellant, v. A. J. HEAD, Plaintiff and Appellee

Civil No. 992

Supreme Court of Arizona

March 25, 1907

APPEAL from a judgment of the District Court of the Fourth Judicial District, in and for the County of Yavapai. Richard E. Sloan Judge.

The facts are stated in the opinion.

Norris & Ross, for Appellant.

The plaintiff, by reason of his being a surety on the bond of the contractor for the faithful performance of the contract, is estopped from enforcing his liens. The surety guarantees the faithful performance of the contract and is precluded from enforcing his lien. McHenry v. Knickerbacker et al., 128 Ind. 77, 27 N.E. 430; Scheid v. Rapp, 121 Pa 593, 15 A. 652; Spears v. Lawrence, 10 Wash. 368, 45 Am. St. Rep. 789, 38 P. 1049; Aikens v. Frank, 21 Mont. 192, 53 P. 538; Rynd v. Pittsburg Natatorium et al., 173 Pa. 237, 33 A. 1041; Gannon v. Central Presbyterian Church, 173 Pa. 242, 33 A. 1043. A contract of indemnity is for the purpose of protecting the obligee against liability arising from the failure of the contractor to perform his contract according to his agreement. 20 Am. &amp Eng. Ency. of Law, 2d ed., 490, 491, and cases; Hartman v. Berry, 56 Mo. 487; Zarrs v. Keck, 40 Neb 456, 58 N.W. 934; Ganahl v. Weir, 130 Cal. 237, 62 P. 512; Blyth v. Robinson, 104 Cal. 239, 37 P. 904; McRae v. University of the South (Tenn. Ch.), 52 S.W. 463; Gamble v. Cuneo, 162 N.Y. 634, 57 N.E. 1110; Smith v. Molleson, 148 N.Y. 241, 42 N.E. 670; Mayes v. Lane, 116 Ky. 566, 76 S.W. 399. The contract of suretyship and the principal contract will be reasonably construed, and the surety will not ordinarily be released from liability, except by reason of some fact which would directly affect or change his status, either with reference to his principal or with reference to his liability. Substantial compliance with the principal will be sufficient. Benjamin v. Hillard, 23 How. (U.S.) 149, 16 L.Ed. 518; Roach v. Summers, 20 Wall. (87 U.S.) 165, 22 L.Ed. 252; United States v. Freel, 92 F. 299, 186 U.S. 317, 22 S.Ct. 875, 46 L.Ed. 1177; Ryan v. Morton, 65 Tex. 258; Barclay v. Deckerhoof, 151 Pa. 374, 24 A. 1067; Snoqualmi Realty Co. v. Moyniham, 179 Mo. 629, 78 S.W. 1014; Chaffee v. United States Fidelity & Guaranty Co., 128 F. 918, 63 C.C.A. 644; Schreiber v. Worm, 164 Ind. 7, 72 N.E. 852; Hohn v. Shideler, 164 Ind. 242, 72 N.E. 575; Cowles v. United States Fidelity & Guaranty Co., 32 Wash. 120, 98 Am. St. Rep. 838, 72 P. 1032; Grafton v. Hinkley, 111 Wis. 46, 86 N.W. 859; Guaranty Co. v. Pressed Brick Co., 191 U.S. 416, 24 S.Ct. 142, 48 L.Ed. 242; Risse v. Hopkins Planing-mill Co., 55 Kan. 518, 40 P. 904; McLennan v. Wellington, 48 Kan. 756, 30 P. 183. Mere immaterial alterations or departures from original contract, which do not change the legal effect, do not operate to discharge the sureties. Starr v. Blatner, 76 Iowa 356, 41 N.W. 41; McConnell v. Poor, 113 Iowa 133, 84 N.W. 968, 52 L.R.A. 312; Robinson v. Hagenkamp, 52 Minn. 101, 53 N.W. 813; Moore v. The School Commissioners (Miss.), 8 So. 509; Kretschmar v. Bruss, 108 Wis. 396, 84 N.W. 429. Surety was not discharged by reason of giving notice to sue on bond under sections 3551 and 3552, Revised Statutes of Arizona of 1901. Notice so given was defective and insufficient in form. 27 Am. & Eng. Ency. of Law, 2d ed., 513, and cases cited; Cope v. Smith, 8 Serg. & R. 110, 11 Am. Dec. 582; Greenawalt v. Kreider, 3 Pa. 264, 45 Am. Dec. 639; Scales v. Cox, 106 Ind. 261, 6 N.E. 622; Kauffman v. Commonwealth, 8 A. 600.

Where the lien is claimed for a sum in excess of the contract price, and the full contract price has been paid in good faith, the lien cannot be enforced against the property of the owner. Renton v. Conley, 49 Cal. 185; McAlpin v. Duncan, 16 Cal. 127; Bowen v. Aubrey, 22 Cal. 571; Wells v. Cahn, 51 Cal. 423; Shields v. Morrow, 51 Tex. 399.

Andrews & Pattee, and Robt. E. Morrison, for Appellee.

Head was not estopped from enforcing his lien by reason of being a surety upon the bond. Any change in the contract made without the consent of the surety releases him from liability, and this regardless of whether he is prejudiced by the alteration. Miller v. Stewart, 9 Wheat. 680, 6 L.Ed. 189; Simonson v. Grant, 36 Minn. 439, 31 N.W. 861; Gato v. Warrington, 37 Fla. 542, 19 So. 883; Northern Light Lodge v. Kennedy, 7 N.D. 146, 73 N.W. 524; Burns' Estate v. Fidelity & Deposit Co., 96 Mo.App. 467, 70 S.W. 518; Chapman v. Enenberg, 95 Mo.App. 127, 68 S.W. 974; Evans v. Graden, 125 Mo. 72, 28 S.W. 439; Erickson v. Brandt, 53 Minn. 10, 55 N.W. 62. Subsequent approval of the bills did not estop appellee from taking advantage of his release from liability. Erfurth v. Stevenson, 71 Ark. 199, 72 S.W. 49. Appellee was released from liability by giving notice to bring suit and the failure of the appellant to do so. Technical accuracy is not necessary in a notice of this kind. 2 Brandt on Suretyship and Guaranty, 2d ed., p. 867, sec. 605; Meriden Silver Plate Co. v. Flory, 44 Ohio St. 430, 7 N.E. 753.

OPINION

NAVE, J.

-- Prior to the hearing of this case upon its merits, a motion filed by appellee to strike from the record the transcript of the reporter's notes was denied; as was also a motion by appellee to dismiss the appeal. These motions raised a question of practice which has not heretofore been the subject of a formal expression of our opinion. The judgment of the district court in this cause was rendered during the May term of the year 1905. Within that term a motion for a new trial was filed by appellant. By formal order, action upon this motion was continued for the term. Again at the November term there was a formal continuance of the motion. It was denied at the May term, 1906; whereupon appellant gave notice of appeal, and during that term caused to be made and filed a transcript of the reporter's notes of the oral testimony.

Paragraph 1486 of the Civil Code permits the oral testimony given in a case to be made a part of the record by filing a transcript of the court reporter's notes. The statute does not expressly prescribe the time within which such transcript shall be filed. By the rules of this court, it is provided that the transcript, in order to become a part of the record, must be filed during the term in which the judgment was rendered, or within such reasonable time thereafter as shall be allowed by the court or the judge thereof. No extension of time was allowed. It was contended by the appellee that the reporter's transcript should be stricken from the record by reason of the fact that it was not filed within the term at which judgment in the cause was rendered. By paragraph 1496 of the Civil Code it is provided that an appeal may be taken "during the term of the court at which final judgment or order is rendered" by the giving of notice of appeal in open court. The notice of appeal, as above stated, was given after the overruling of the motion for new trial at a term subsequent to that at which judgment was rendered. Upon this the appellee based his motion to dismiss the appeal. Our construction of our rule in regard to filing the reporter's transcript and of paragraph 1496 is that for these purposes the term at which the judgment is rendered is the term at which the judgment becomes final by the overruling of a motion for a new trial. A different construction would lead to a palpable absurdity.

Appellant has made thirty-five assignments of error. Of these assignments the second to sixth, inclusive, the twelfth, and the twenty-first to thirty-fifth, inclusive, are too general for consideration. They are of the same character as those which were refused consideration in Ward v. Sherman, 7 Ariz. 277, 64 P. 434; Charouleau v. Shields, 9 Ariz. 73, 76 P. 821, and Daniel v. Gallagher, ante, p. 151, 89 P. 412. By the remaining assignments of error several matters are raised which we may properly consider.

The facts in the case are as follows: One Grant contracted to construct a building for the Prescott National Bank, the appellant in this case. A. J. Head, the appellee was one of two sureties upon a joint and several indemnity bond given by the contractor to the bank. Head sold material to the contractor for the construction of the building. The material not having been paid for in full, Head perfected a lien upon the property for the unpaid balance. This is a suit by Head against the bank to foreclose this lien, and also the lien of another materialman which had been assigned to him. The bank answered setting forth the indemnity bond given to it by the contractor, and pleaded that Head, by reason of his obligation as surety thereon, is estopped from maintaining the action to foreclose these liens. Furthermore, the bank filed a counterclaim, setting up the indemnity bond, and demanding from Head the payment of the amounts of liens paid by the bank to other persons, and of an amount expended by the bank to complete the building after abandonment of the work by the contractor. The trial court made findings of fact, which need not here be set forth, except to note a finding that certain alterations had been made in the work shown by the specifications without written orders of the supervising architect; the contract providing that no alteration shall be made except upon the written "order of the architect." Upon these findings the trial court predicated, among others, the following conclusions of law: "(1) That the written contract made between said Grant and the Prescott National Bank is sufficiently referred to in said bond, and that a breach of said contract by failure to pay lien claims is a breach of said bond, and is covered by the conditions of said bond. (2) That primarily the plaintiff, being a surety on said bond,...