Hay v. Hassett
| Citation | 156 N.W. 734,174 Iowa 601 |
| Decision Date | 11 March 1916 |
| Docket Number | No. 30267.,30267. |
| Parties | HAY v. HASSETT ET AL. |
| Court | United States State Supreme Court of Iowa |
OPINION TEXT STARTS HERE
Appeal from District Court, Dubuque County; Robert Bonson, Judge.
Action at law upon a surety bond. At the close of plaintiff's evidence, the defendant stating that it had no evidence, there was a directed verdict for plaintiff. The defendant the Fidelity & Deposit Company appeals. Affirmed.Kenline & Roedell, of Dubuque, for appellant.
William Graham, of Dubuque, for appellee.
One Hassett entered into a contract with the city of Dubuque for the construction of a sewer, and to furnish all the materials and do all the work and labor for its construction. To secure the full performance of the contract on his part, he gave to the city a bond, with the appellant as surety, conditioned:
“That if the said Hassett shall faithfully and fully perform said contract, and all its covenants, for the price and consideration therein named, and meet all obligations as to the full payment of wages and money due subcontractors, workmen, and employés, and for all materials used, to the satisfaction of the city of Dubuque, then this obligation to be void, otherwise to be in full force and virtue.”
The appellee furnished the sewer pipe and cement used in the construction of the sewer, no part of which has been paid, and on July 10, 1913, brought this action against Hassett, the appellant, upon his account for materials furnished for said sewer, and on November 14, 1913, obtained a judgment against Hassett for $1,234.60 and costs; but, service not having been had on the surety company, the action against it was not tried until May 7, 1914. On the trial the execution of the contract with the city, and the giving of the surety bond by the defendant corporation, having been admitted in the pleadings, the plaintiff proved the furnishing of the materials by him to Hassett, and that they were actually used in the construction of the sewer, and that the materials so furnished had not been paid for, and rested.
Thereupon appellant moved for a directed verdict in its favor, and the plaintiff also moved the court to direct a verdict in his favor. The court overruled the defendant's motion and called on the defendant to produce its evidence, when defendant's counsel stated that:
Thereupon the court directed a verdict in favor of the plaintiff for $1,263, and judgment was entered for that amount, with interest and costs.
[1] Complaint is made by appellant as to rulings by the trial court on minor matters which will be referred to later. The principal point relied upon by appellant is, as they state it, that under the terms of the contract and bond, and the facts in evidence, the bond as executed was intended solely for the benefit of said city of Dubuque, and none other, no breach of the bond has occurred, and defendant's motion to direct a verdict should have been sustained. They cite a number of authorities in support of their proposition. It is true, of course, that the liability of surety is to be determined by the specified conditions of the bond, and their liability cannot be enlarged beyond such specified conditions. Kuhl v. Chamberlain, 140 Iowa, 552, 118 N. W. 776, 21 L. R. A. (N. S.) 766.
[2] The intent of the parties is to be gathered from the nature of the instrument fairly read in the light of all the circumstances attending its making and the apparent purpose it was intended to serve. Van Buren Co. v. Surety Co., 137 Iowa, 490-495, 115 N. W. 24, 126 Am. St. Rep. 290;Lumber Co. v. Peterson, 124 Iowa, 599, 100 N. W. 550;U. S. Fidelity & Casualty Co. v. Iowa Telephone Co., 156 N. W. 727, decided at present sitting.
[3] It is said by appellant that the general rule is that where contracts are to be performed “to the satisfaction” of adverse party, the party to be satisfied is the judge of his own satisfaction. Manufacturing Company v. Cereal Co., 124 Iowa, 737, 100 N. W. 860, and cases cited. But the party must have acted in good faith and be honestly dissatisfied. See cases above.
Upon appellant's main proposition, as before stated, the following may be cited as illustrative of their cases: Hunt v. King, 97 Iowa, 88, 66 N. W. 71;Hutchinson v. Krueger, 34 Okl. 23, 124 Pac. 591, 41 L. R. A. (N. S.) 315, Ann. Cas. 1914C, 98, 102. In the last case the condition of the bond was “to pay all claims for labor and material contracted in the erection of said county jail building to each and all persons entitled thereto, and which claims might be the basis of liens on said lots and buildings,” etc. Held, that the obligation of the bond extended only to such claims as “might become liens,” and that the sureties were not liable on account of claims that are not and could not become liens. So also in the Hunt Case, where the contract provided:
“Provided, further, that a satisfactory certificate shall be obtained to the effect that no mechanic's liens or other claims are chargeable to the party of the second part.”
Because of this language, plaintiff argued that the bond required payment to all parties who did work upon the building or furnished material. The court said that the contract does not so provide, and that the provisions are against liens or claims chargeable to it, and that a reason for such a provision in its own behalf is found in the provision of the law by which a laborer or material furnisher has a claim against a public corporation for labor or material furnished for the construction of a public building. But there is no such provision in the bond in the instant case. The language is:
“That if the said Hassett shall * * * meet all obligations as to the full payment of wages and money due subcontractors, workmen, and employés, and for all materials used,” etc.
[4] Appellant places stress upon the words in the bond, “to the satisfaction of the city of Dubuque,” and they say that if that phrase was not in the condition of the bond, they would be ready to...
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