United States, to Use of Fidelity Nat Bank v. Rundle

Decision Date04 February 1901
Docket Number611.
PartiesUNITED STATES, to Use of FIDELITY NAT. BANK, v. RUNDLE et al.
CourtU.S. Court of Appeals — Ninth Circuit

On July 1, 1897, N. B. Rundle entered into a contract with the United States to erect certain buildings near Spokane in the state of Washington, and in pursuance of an act of congress approved August 13, 1894, executed and delivered a bond to the United States in the penal sum of $10,000, conditioned that the said N. B. Rundle should well and truly and in all respects duly and fully observe and perform the contract, and 'promptly make full payments to all persons supplying him labor or materials in the prosecution of the work provided for in said contract. ' The sureties upon the bond were D. W. Henley and F. E. Snodgrass, the defendants in error. The Fidelity National Bank, the plaintiff in error, brought the present action against the defendants in error and N. B Rundle upon their bond, alleging that during the progress of the work upon the contract numerous persons performed work upon the buildings called for by the contract and furnished materials used therein, and that the said laborers and material men, prior to August 13, 1898, assigned their claims to said bank, the claims amounting to $6,868.71 for materials and $2,603.79 for labor. Rundle made no appearance, and default and judgment were taken against him. The defendants in error answered, denying that the claims had been assigned to the plaintiff in error, and alleging as an affirmative defense that the plaintiff in error, without the knowledge of the defendants in error, entered into an agreement with Rundle whereby it was to wait for the pay on said claims 30 days, or from estimate to estimate as made by the officer representing the government in said contract, and that by such extension of credit the defendants in error had become released from liability upon the bond. Upon the issues so made, the case was tried before a jury, and a verdict was rendered for the plaintiff in error for the sum of $3,115.21 and interest. In the verdict it was specified that the amount so found was upon three certain claims for materials that had been assigned to the plaintiff in error, and $339.45, with interest thereon, for labor which had been paid upon time checks approved and authorized by D. W. Henley, one of the defendants in error. See 100 F. 400.

Happy &amp Hindman, for plaintiff in error.

Henley Kellam & Lindley and A. G. Avery, for defendants in error.

Before GILBERT, ROSS, and MORROW, Circuit Judges.

GILBERT Circuit Judge, after stating the case as above, .

Upon the writ of error it is now contended that the trial court erroneously charged the jury concerning the effect of the extension of time which was given to N. B. Rundle by the Fidelity National Bank. It is urged that the agreement which was made between Rundle and the bank to extend the time of payment from estimate to estimate as made upon the work was an extension for no definite period, and that therefore it did not operate to release the sureties, and that the agreement to extend was without consideration, and was not binding upon the bank. The transaction between Rundle and the bank is fully set forth in the bill of exceptions. It appears that when Rundle found that the contract was to be awarded to him he went to the president of the bank to make arrangements for a loan of money to help him carry it out. An arrangement was made whereby the bank was to furnish him from five to ten thousand dollars, as might be required, to pay for labor, and to pay what dollars, as might be required, to pay for labor and to might be needed to carry the work along during the time between each estimate, for which the bank was to receive an assignment of the total amount due upon the contract, so that the money might be paid to the bank, and not pass through the contractor's hands. It was arranged that the labor debts should be paid by time checks, and that the bank should receive its compensation by discounting the time checks 3 per centum. This was the understanding as testified to by all the witnesses. Nothing was said in any of the conversations concerning an assignment of the claims of laborers and material men to the bank, and none of such claims were in fact assigned to...

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