United States Fidelity & Guar. Co. v. Rice

• Decision Date: 04 October 1906
• Citation: United States Fidelity & Guar. Co. v. Rice, 148 F. 206 (8th Cir. 1906)
• Parties: UNITED STATES FIDELITY & GUARANTY CO. v. RICE.
• Court: U.S. Court of Appeals — Eighth Circuit

148 F. 206

UNITED STATES FIDELITY & GUARANTY CO. v. RICE.

United States Court of Appeals, Eighth Circuit.

October 4, 1906

C. A Ballreich (W. L. Hartman, on the brief), for plaintiff in error.

M. G Saunders (E. E. Hubbell, on the brief), for defendant in error.

Before SANBORN, HOOK, and ADAMS, Circuit Judges.

ADAMS Circuit Judge.

On June 15, 1901, Rice the defendant in error, employed one Davis to furnish material and construct in the city of Pueblo a certain brick and frame building, and a contract was entered into between them to that end. The contract, among other things, required the contractor, Davis to complete the building on or before December 1, 1901, and provided that the owner should pay him for his work and materials used the total sum of $14,465, of which 85 per cent. was payable as the work progressed and the remaining 15 per cent. within 10 days after the building should be completed and accepted by the owner. Simultaneously with the execution of the contract the contractor, as principal, and the United States Fidelity & Guaranty Company, the plaintiff in error, as surety executed and delivered to Rice the owner, a bond, in the penal sum of $5,000, indemnifying him against loss or damage which might result from any breach of the contract by the contractor. The obligation of the bond, however, was subject to the following conditions and provisions:

'First. That no liability shall attach to the surety hereunder unless, in the event of any default on the part of the principal in the performance of any of the terms, covenants or conditions of the said contract, the obligee shall promptly upon knowledge thereof, and in any event not later than thirty days after the occurrence of such default deliver to the surety at its office in the city of Baltimore, written notice thereof with a statement of the principal facts showing such default and the date thereof. * * * Second. That in case of such default on the part of the principal, the surety shall have the right, if it so desires, to assume and complete or procure the completion of said contract, and in case of such default, the surety shall be subrogated and entitled to all the rights and properties of the principal arising out of the said contract and otherwise, including all securities and indemnities theretofore received by the obligee, and all deferred payments, retained percentages and credits, due to the principal at the time of such default, or to become due thereafter by the terms and dates of the contract.'

The contractor failed to perform his contract, and suit was brought against the surety on the bond. One of the defenses interposed by the surety company was that the contractor failed to complete the building on or before December 1 1901, as...