Alcatraz Masonic Hall Ass'n v. United States Fidelity & Guaranty Co.
Before: Harrison
Synopsis
Building Contract—Bond of Contractor—Change of Obligation— Discharge of Surety.—A surety on the bond of a contractor in the amount of the last payment on a building contract at an agreed price, to secure its performance and the delivery of the building to the owner free from all liens, etc., is exonerated and discharged, under section 2819 of the Civil Code, by a subsequent change, without the consent of the surety, in the terms of the contract increasing the price to the extent of $315, and requiring a greater length of time to complete the building, and greater expense incident thereto, than that for which the surety had agreed to indemnify the -owner.
Id.—Construction of Bond and Contract—Enforceable Liens.— The terms of the bond and contract for the delivery of the building to the owner free from liens, claim and demands are to be construed as limited to such liens as are enforceable against the building, and not to include any unauthorized or invalid or excessive liens or claims.
Id.—Owner Undamaged—Untenable Action for Expense.—An owner not compelled' to pay a greater amount than was agreed to be reserved from the contract price for the payment of enforceable liens has suffered no damage, and cannot maintain an action on the bond to recover expenses paid and attorney’s fees voluntarily and needlessly incurred in defending liens which are not enforceable against the building.
HARRISON, P. J. The plaintiff entered into a contract -with one L. U. Grant, October 19, 1899, for the construction by the latter of a building upon its land at the agreed price ■of $16,300, and at the same time the said Grant as principal and the defendant as surety executed to the plaintiff a bond if indemnity in the sum of $4,075, conditioned that Grant .should faithfully perform the said contract and deliver the building to the plaintiff within the contract time for its completion, free from all liens, demands and claims, and should pay to the persons performing labor or furnishing materials for the construction of the building the value thereof. The ■contract provided that the building should be completed with[340]in one hundred arid fifty working days from the date thereof, and that the payment of the contract price should he made in installments as the work progressed, in sums equal to seventy-five per cent of the value of the work done and materials furnished, as estimated on the first and fifteenth days of each month, and the balance,-to wit, twenty-five per cent of the contract price of $16,300 ($4,075) thirty-five days after the completion and acceptance of the work. After the execution and recording of the contract the plaintiff and Grant made certain alterations and changes therein, by which the cost of the building was increased in the sum of $315, and agreed that the said additional cost should be paid at the same times and in the same manner as payments under the original contract. During the progress of the work payments were made to Grant upon certificates of the architect on account of installments due on the contract, amounting to $12,138.85. Before the building was completed Grant abandoned the contract, and the plaintiff completed the construction of the building and expended therefor $641.23. After its completion certain parties, who had furnished materials and performed labor for Grant in its construction, filed claims of lien therefor, amounting to about $7,500, and subsequently brought actions in the superior court for their enforcement. These actions were, by an order of court, consolidated, and the plaintiff filed its answer thereto, alleging that the building was not subject to liens exceeding in the aggregate $3,834.92, and offering to deposit that sum in court for their satisfaction. Upon the trial of the cause the court found that that was the amount due from the plaintiff to Grant upon the contract at the commencement of the action; and upon its order the sum was deposited in court for the said claimants, and the court thereupon rendered its judgment that the said liens were thereby fully satisfied. In this litigation the plaintiff employed certain attorneys, for whose services he paid $500, and incurred certain costs, amounting to $27. The present action is brought to recover these amounts from the defendant. A demurrer to the complaint was sustained, and from the judgment entered thereon the plaintiff has appealed.
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