State ex rel. Interstate Pub. Serv. Co. v. Lund

• Decision Date: 29 May 1923
• Docket Number: No. 11482.,11482.
• Parties: STATE ex rel. INTERSTATE PUBLIC SERVICE CO. v. LUND et al.
• Court: Indiana Appellate Court

80 Ind.App. 349

139 N.E. 466

STATE ex rel. INTERSTATE PUBLIC SERVICE CO.

v.LUND et al.^*

No. 11482.

Appellate Court of Indiana, Division No. 1.

May 29, 1923.

Appeal from Circuit Court, Lake County; Virgil S. Reiter, Special Judge.

Action by the State of Indiana, on the relation of the Interstate Public Service Company, against Erick Lund and others. From a judgment against defendant Lund only, plaintiff appeals. Reversed as to all defendants except Lund, and as to him affirmed, with instructions.

Ibach, Gavit, Stinson & Gavit, of Hammond, and George Voigt, of Jeffersonville, for appellant.

Fred C. Crumpacker, Wm. J. McAlear, Edwin H. Friedrich, and Frank L. Greenwald, all of Hammond, for appellees.

BATMAN, J.

This is an action by appellant on a bond, executed by appellee Lund as principal, and appellees Eder, Thompson, Schneider, Friedrich, and one Peter Crumpaker, as sureties, to the state of Indiana, to recover for labor and material used in the construction of a poor asylum in Lake county, Ind. Subsequent to the filing of the complaint, and prior to the rendition of the judgment, the said Peter Crumpaker died, and William C. Paxton, as executor of his last will, was substituted as a party defendant. After the formation of issues the cause was submitted to a jury for trial, resulting in a directed verdict in favor of the sureties on the bond, and a separate verdict against the principal therein. After judgment on the verdicts, appellant filed a motion for a new trial, which was overruled, and this appeal followed.

The only alleged error which we need consider, in making a disposition of this appeal, is the action of the court in overruling appellant's motion for a new trial. The undisputed evidence establishes the following facts pertinent to the questions submitted for our determination: The bond in suit, after formal recitals, reads as follows:

“The conditions of the above obligation are such that whereas, the board of commissioners of Lake county, Indiana, is about to let a contract for the erection of a poor asylum, *** and the above-named Erick Lund has filed a bid for said work with the auditor of the county: Now, therefore, if the said board of commissioners shall award him the contract for said work, and the said Erick Lund shall promptly enter into a contract with said board of commissioners for said work, and shall well and faithfully do and perform the same in all respects according to the plans and specifications adopted by the board of commissioners and according to the time, terms and conditions specified in said contract to be entered into, and shall promptly pay all debts incurred by him in the prosecution of said work, including labor, materials furnished, and for boarding the laborers thereon, then this obligation shall be void; otherwise to remain in full force, virtue and effect.”

The bid of said Lund for the erection of said poor asylum was accepted, and thereafter he entered into a contract with the board of commissioners of said county, whereby he agreed to furnish all the labor and material necessary for the construction of said building, and to construct the same according to certain plans and specifications, and under certain supervision, for the sum of $141,275. The following appears as the fourth paragraph of said contract:

“Should the party of the first part at any time during the progress of the work require any additions or omissions from this contract, or to make any change in the plan or style of work or material to be used, the work will be done and performed and the material furnished by the said party of the second part, the value of said changes being first agreed upon in writing, and a subsidiary contract indorsed on or attached to this contract, so that the amount may be added to or deducted from the aggregate amount of this contract according as it may increase or diminish the total cost of said work and materials.”

There is due appellant from said Lund a substantial sum for labor and material used in constructing said poor asylum, as finally completed. After the execution of said contract and bond, changes were made in the electrical specifications, whereby certain equipment, intended for the generation of electrical current on the premises, was omitted, and provision was made for other equipment to be used in receiving and distributing such current from an outside source. This equipment was installed in accordance with the changed specifications at an additional cost approximating $2,500. The cost of such changes was not first agreed upon in writing, and a subsidiary contract therefor indorsed on said original contract, or attached thereto, as provided in said paragraph 4 thereof, as quoted above. The cost of such changes, however, was determined by the architects in charge of the construction of said poor asylum, and the amount thereof certified by them to the board of commissioners in writing. Such cost was thereupon duly allowed and paid to appellee, Lund, the general contractor.

Appellant contends that the court erred in directing a verdict in favor of appellees, who were sureties on the bond in suit. It is apparent that this contention must be sustained, unless such sureties are released from the bond, as they contend. The claim of such release is based on two grounds, viz.: (1) That a material change was made in the building constructed under said contract, without the consent of the sureties on the bond; (2) that said change was made without complying with the formalities specified in the contract.

[1] Directing our attention to the first ground stated, we find the general rule to be that, in the absence of a stipulation permitting the parties to the contract to make changes in the work to be done, a material alteration made without the consent of the surety on the contractor's bond will discharge such surety, but if the contract under which the work is to be done provides that changes therein may be made, the surety on the contractor's bond will not be discharged by reason of material changes made without his consent, where such changes are within the stipulation of the contract in that regard. 9 C. J. 858; Young v. Young (1898) 21 Ind. App. 509, 52 N. E. 776;American Surety Co. v. Lauber (1898) 22 Ind. App. 326, 53 N. E. 793;Higgins v. Quigley (1899) 23 Ind. App. 348, 54 N. E. 136;Hedrick v. Robbins (1902) 30 Ind. App. 595, 66 N. E. 704;Woodruff v. Schultz, 155 Mich. 11, 118 N. W. 579, 16 Ann. Cas. 346 and note; Hustace v. Davis, 23 Hawaii, 606.

[2][3] In the instant case it will be observed that the contract, while providing that changes in the work may be made, does not limit the nature, cost or extent thereof. In view of this fact we are compelled to hold that the parties intended that any reasonable change in the work might be made. Such change, however, could not be of such a character as to substitute a substantially different structure from the one shown by the plans and specifications. Whether or not a change in the work in a given case is one contemplated by the parties as a rule, constitutes a question of fact for the jury, under proper instructions, where one is called for the trial of the cause, although the evidence may be such as to permit the court to determine the fact as a matter of law. 9 C. J. 861; Hustace v. Davis, supra; Hinton v. Stanton, 112 Ark. 207, 165 S. W. 299. We therefore hold that the first ground stated by appellees, in support of their claim of release from the bond in suit, did not warrant a directed verdict in their favor.

[4] Directing our attention to the second ground on which appellees base their claim stated above, we note the following statutory provisions relating to the duties of county commissioners:

“No bid for the building or repairing of any courthouse, jail, poor asylum, bridge or other county building or work or...