D. H. & M. A. Edwards Co. v. Barry

RICHARDS, J.

This is an appeal from a judgment in favor of the plaintiff and against the defendant and appellant United Surety Company, a corporation.

The facts, which are mainly undisputed, are briefly these: One W. P. Barry entered into a contract with plaintiff to construct a certain building in the city and county of San Francisco, for which he was to be paid the sum of eight thousand four hundred dollars in installments as the work proeeeded according to the terms of his contract. Barry began the work of constructing the building, but after he had proceeded with such work for some time, and had received payments in accordance with the contract aggregating the sum of four thousand five hundred dollars, he abandoned the construction of the building, and formally notified the plaintiff thereof by letter. Thereupon the plaintiff and the representative of the surety company held several conferences, as the result of which the latter wrote the plaintiff a letter reciting the fact of Barry’s abandonment of his contract, waiving its right under its bond to assume said contract and complete said building, and consenting and agreeing that the plaintiff might proceed to complete the structure, and in so doing expend such reasonable sums as were necessary according to the plans and specifications, and no more. The United Surety Company also in this letter agreed to allow the plaintiff the sum of five hundred dollars for its services in completing the building, and for the services of its attorney in connection therewith and in the settlement of claims against

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it, and further agreed to co-operate with plaintiff and its attorney in the settlement of all such claims for labor and material then filed or thereafter to be filed against the building, on the lowest possible reasonable basis, stipulating that all settlements must be presented to and passed upon and approved by Mr. Nuckolls, the attorney of plaintiff, and Mr. Robinson, the representative of the surety company, it being expressly understood and agreed that in the settlement of such claims for labor and material the surety company should not be held responsible for a sum exceeding one thousand six hundred dollars. Acting upon this letter plaintiff undertook the completion of the building, and, with its said attorney, entered upon the endeavor to adjust the claims of a considerable number of mechanics and materialmen who had filed their claims of lien against the structure. When the time arrived for the adjustment of these claims Mr. Nuckolls, acting as the attorney for the plaintiff, notified Mr. Robinson, the representative of the surety company, that he was ready to adjust said claims, and requested his co-operation, but Mr. Robinson refused to co-operate with Mr. Nuckolls in the adjustment and settlement of said claims, and expressly instructed him “to take any action he might deem proper.” Thereupon the plaintiff and Mr. Nuckolls proceeded to adjust, compromise, and settle said claims, expending therefor the sum of two thousand five hundred