Cortright Metal Roofing Co. v. Merten

145 N.W. 261, 95 Neb. 164, 1914 Neb. LEXIS 171
CourtNebraska Supreme Court
DecidedJanuary 30, 1914
DocketNo. 17,366
StatusPublished

This text of 145 N.W. 261 (Cortright Metal Roofing Co. v. Merten) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cortright Metal Roofing Co. v. Merten, 145 N.W. 261, 95 Neb. 164, 1914 Neb. LEXIS 171 (Neb. 1914).

Opinions

Rose, J.

This is an action on the bond of a public contractor who had agreed for the consideration of $77,872 to construct for the state of Nebraska at the asylum for the insane at Norfolk a new fireproof wing, a cottage, and a ^on-fireproof storehouse. William G. Merten was the contractor. According to specific terms of the building contract, it obligated the contractor, under the penalty expressed in a bond thereto attached, “to furnish all labor, materials, machinery, appliances or things necessary to construct, equip and fully build, and complete ready for use,” the buildings mentioned. The improvements were to conform to plans and specifications attached to and made a part of the building contract, in which the state was described as “party of the first part.” In the penal sum of $25,000, with the state of Nebraska named as obligee, the bond on which the action is based, if enforceable, bound the contractor as principal and the United Surety Company of Baltimore as surety, as MIoavs: “Noav if the said William G. Merten shall faithfully keep and perform each and eArery one of the stipulations and agreements contained in said contract, at the times and in the manner therein specified, and pay off and settle in full with the person or persons entitled thereto all accounts and claims that may become due by reason of laborers’ or mechanics’ wages, or for materials furnished, or services rendered to said party of the first part in executing or performing the obligations of said contract so that each of such persons may receive his jufet dues in that behalf, then this obligation is to be void, otherwise to be and remain in full force and effect in law.” Due execution of. the building contract on the part of the state and the contractor is conceded. The contractor executed the bond, and it was signed and sealed by a duly authorized agent of the surety. Plaintiff furnished materials for the buildinss. and the [166]*166.contractor violated his agreement to pay for them. This is a suit on the bond for the price of the materials so furnished. The contractor, though named in the petition as one of the defendants, was not summoned, and the case proceeded against the surety alone. Two defenses were interposed: (1) The bond was never mutually executed by the state and the surety. (2) Plaintiff was not entitled to the protection of the bond. Upon a trial of the issues in the district court, without the intervention of a jury, plaintiff recovered a judgment for the full amount of its claim, amounting to $1,319.40, April 26, 1911. The surety has appealed.

1. Was the plea that the bond never became a binding-contract between the state and the surety established? This defense is based on a departure from the terms of the building contract as originally drawn. The contractor and the state, acting through its board of public lands and buildings, made the change in the unexecuted, original draft of the building contract after the bond had been signed by the surety and before it had been delivered. The bond was signed in Omaha, December 3, 1907, by Edward E. Howell, agent of the surety. The building contract was executed at the capitol in Lincoln, December 4, 1907, and the change was made earlier the same day. The nature of the defense, as understood by the surety, is definitely stated by counsel as follows: “The position of the surety company in this case is that Merten and the surety company made an offer to the state of Nebraska to enter into a contract, and the state never accepted the offer in the terms in which it was made, and therefore never accepted it at all. So far as Merten is concerned, he consented to the modified acceptance, and there was no doubt a valid contract between him and the state, but the United Surety Company was not a party to it. It is not a question of the alteration of an existing contract. It is purely a question as to whether the minds of the parties have ever met upon a common ground— whether the offer made was ever accepted in the terms in which it was made; and there is lacking in this case the [167]*167elementary requisite of the meeting of tbe minds upon a common subject.”

Tbe departure from tbe original draft of tbe building contract is as follows:

“Lincoln, Nebraska, Dec. 4, 1907.
“To tbe Board of Public Lands & Buildings of tbe State of Nebraska: I agree to substitute stone instead of pressed brick on both tbe new wing and cottage tbrougb 1st and 2d stories as originally shown on all of tbe plans and specifications prepared by George A. Berlingbof, Architect, in exchange for tbe fireproof construction of cottage, substituting tbe slow-burning construction as called for under item 2 of page 19 on original bidding sheet. Very truly yours, W. G. Merten.”

Tbe evidence is undisputed that this change reduced tbe cost of construction. Before tbe building contract bad been made or tbe surety bond signed, tbe contractor procured from tbe architect copies of tbe original draft with plans and specifications attached. At that time tbe copies correctly showed tbe transactions as far as they bad progressed. They were in no sense contracts. Neither party was bound by them. Tbe contractor gave one copy to O. W. Palm, an insurance broker of Lincoln, and orally applied to him for a surety bond. Palm forwarded tbe copy to tbe Brennan-Love Company, general insurance agents at Omaha, and tbe latter turned it over to Edward E. Howell, who signed tbe name of tbe United Surety Company to tbe bond in controversy, December 8, 1907, without tbe written application usually exacted of tbe principal, and entrusted tbe bond to tbe Brennan-Love Company for delivery. Tbe latter sent it to Palm, who delivered it to tbe board of public lands and buildings, December 4, 1907', knowing tbe building contract as originally drawn had been changed in the manner described. Tbe bond was accepted, approved, and filed in tbe office of tbe secretary of state. Palm afterward received from tbe contractor tbe premium, deducted his commission, and sent tbe balance to tbe Brennan-Love Company. After tbe several agents, tbrougb whom tbe surety business passed, [168]*168had received compensation for services, the balance of the premium reached the surety at Baltimore, and was retained until- after this suit was brought. When the bond was signed by Howell, it was accompanied by the copy of the original draft of the building contract with the plans and specifications attached, and thus reached Palm, who, after delivering the bond, returned the copy unchanged to the Brennan-Love Company, and it finally reached the United Surety Company in that- form. The latter asserts that it never offered to become surety on a bond to secure the performance of the building contract as changed, that Palm had no authority to consent to a change, and that it had no knowledge of the change until after the action-had been instituted.

The fundamental fallacy in the defense is the assumption that the surety limited its offer of suretyship to the building contract in the hands of its-agent, when the bond was signed. That was not a contract. It was not a copy of a contract. It had not been signed by either party. It was not then authenticated or certified by any public officer. It showed on its face that it was unexecuted and subject to change. The change in fact decreased the burden of the contractor. There was no public record showing its adoption by the board of public lands and buildings. There had been no act of any public officer to mislead or deceive any one.

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Bluebook (online)
145 N.W. 261, 95 Neb. 164, 1914 Neb. LEXIS 171, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cortright-metal-roofing-co-v-merten-neb-1914.