Koenig v. American Surety Co. of N.Y.

[38]

FINLAYSON, P. J.

This is an action by the owner of a building upon a building contractor’s bond. The action is against the contractor and his surety. The Surety Company answered, and, after a trial, obtained a judgment from which plaintiff, the owner, appeals.

The building contract whereby the defendant Myers contracted to construct a building for plaintiff contains a provision to the effect that the contractor, on or before thirty-five days after the acceptance of the building, shall “cancel and release the said building and premises from all claims that may have accrued against the said building by reason of the aforesaid erection.” Contemporaneously with the execution of the contract, the contractor, as principal, and the Surety Company, as surety, executed and delivered to plaintiff a bond in the penal sum of $6,600, conditioned that “should said M. A. Myers (said contractor) faithfully keep and strictly perform all the covenants of said agreement [the building contract], and well and truly pay, or cause to be paid, all just claims against him for such aforementioned labor or materials, or both, so performed or furnished, as the case may be, then this obligation to be null and void, and otherwise to be and remain in full force and effect.” Though the bond is a statutory undertaking, given pursuant to the requirements of section 1183 of the Code of Civil Procedure, it also is a valid, express contract between the owner and the surety, and, as between those two, is a good common-law bond. Both contract and bond were duly filed in the office of the county recorder before the commencement of any work, and, therefore, according to the express declaration of the code, the owner’s liability to lien claimants was limited to the measure of the contract price, and any recovery by such lien claimants under their liens would be restricted “to an aggregate amount equal to the amount found due from the owner to the contractor.” (Sec. 1183, Code Civ. Proc.) But there was no amount due from the owner to the contractor; for, at various times between the execution of the contract and the recording of the notice of completion, the owner had paid to the contractor, under the terms of their contract, sums of money that aggregated the full amount of the contract price. The result is that no lien claimant was entitled to a foreclosure of any lien upon the building, though he might be entitled