Ind. Dist. v. Reichard

50 Iowa 98

• Court: Supreme Court of Iowa
• Decided: December 9, 1878
• Status: Published

Opinion

Day, J.

i. surety: tS®eiuieiise. The original contract was entered into on the-29th day of April, 1872, and provides for the delivery to-Jacob Reichard, in payment for the work stipulated to be performed by him, of twenty thousand dollars in bonds of the school district at par, upon his executing and delivering a bond conditioned for the building of the school-house according to plans and specifications referred to. The bond was executed upon the same day, and for the conditions to be performed by Jacob Reichard refers to this agreement.

On the 11th day of May, 1872, the following agreement, was entered into:

“It is hereby further agreed between the school board and said Reichard that the school board shall negotiate said bonds for said Reichard at an expense of not more than one thousand dollars, which expense shall be paid by said Reichard, and the board shall make payment as follows to said Reichard: Twelve thousand dollars within twenty days from this date; six thousand dollars when the walls of said building are completed and ready for the joists, and one thousand dollars when the building is completed and accepted by the board.”

This contract was signed by Jacob Reichard and by the board •of directors of plaintiff, and attested by their secretary. There is no proof that the sureties upon the bond assented to this •contract, and it is not claimed that they ever did assent thereto. ' The changes made by this agreement are material. By the original contract defendant Jacob Reichard was to have twenty thousand dollars in bonds as soon as he gave bond, with sureties, for the proper performance of his contract. Under this supplemental agreement no payment was to be made until twenty days after the agreement was signed, and then only twelve thousand dollars was ■ to be paid. Of the balance, the payment of six thousand dollars was to be postponed until the walls of the building were completed and ready for the joists; one thousand dollars was not to be paid until the building was accepted; and the remaining one thousand dollars was to be allowed to the school board for negotiating the bonds. We think it is very clear that these changes operated to discharge the sureties upon the bond.

“Any alteration, however bona ficle, by the creditor and the principal, without the assent of the surety, of the terms of the original agreement, so far as they relate to the subject-matter in respect of which the surety became responsible for the principal, will exonerate the surety.” Chitty on Contracts (ll'th Ed.), 776. “And this doctrine seems to bold, although the new terms thus substituted vary only in a slight degree from those of the original agreement.” Id., 777. In regard to this principle, in Miller v. Stewart, 9 Wheat., 680, it is said: “It is not sufficient that he” (a surety) “may sustain no injury by a change in the contract, or that it may even be for his benefit. He has a right to stand upon the very terms of his contract, and if he does not assent to any variation of it, and a variation is made, it is fatal.” See, also, Grant v. Smith, 46 N. Y., 93; Cunningham v. Wren, 23 Ill., 69; Rowan v. Sharp & Co., 33 Conn., 1.

2__. con_ tur^in’official capacity. II. Appellant claims that the contract of May 11, 1872, was entered into between Jacob Reichard and the directors of plaintiff as individuals, and not between Jacob Reichard and plaintiff. This position, we think, jg no¿ ¿enable. The agreement is signed by all the directors in an official capacity, and attested by their secretary. It does not bind the directors as individuals, and is binding upon the district. See Baker v. Chambles, 4 G. Greene, 428; Lyon v. Adamson et al., 7 Iowa, 509.

3_. sch00l distnct. III. It is claimed that the school district had no authority to release the sureties from liability upon their bond. It cannot, however, be denied that the school dis-¿Hot }ia(j authority to change its original contract with Reichard. When such change is made the legal consequences are the same as if the change were made between individuals.

IV. It is further urged that the board had carried out its contract with Reichard by a delivery to him of the bonds as agreed before the contrae* of May 11,1872, was entered into, and that Reichard, having the bonds pursuant to the original contract, might make any agreement respecting them he saw fit, without discharging the sureties. The evidence does not sustain this position. The only testimony upon the subject is that of A. B. Tuttle, a member of the board, who says: “The bonds were made out and signed, but whether they were then delivered to him I can’t say. Some of them, I think, were delivered. The question came up before the board, and Reichard, as he stated the matter, could not negotiate the bonds very well, and Lytle, one of the members of the board, knew where they could be negotiated, and the bonds were returned to the board, and the board acted as his agent in negotiating the bonds.” The most that can be claimed for this evidence is that it establishes that some of the bonds were delivered. But Eeichard, under his contract, was entitled to all of them. Even if appellant’s position on this branch of the case be correct, yet a change in the contract which prevented Eeichard from receiving some of the bondsf would be material, and would discharge the sureties.

A further change in the contract was made July 16, 1872, changing the time for the completion of the building to January 1, 1873. The plaintiff claims that the sureties assented to this change. The sureties deny that they so assented. This question involves a construction of writing executed by the sureties on the 12th of August, 1872.

As the changes above considered operated to discharge the sureties from liability, we deem it unnecessary to consider the effect of the subsequent contract of July 16th, or of the instrument executed by the sureties, August 12th. The view above presented disposes of the material and vital questions in the case, without an effort to consider in detail the many errors assigned. It is our opinion that the plaintiff cannot recover against the sureties.*

Affirmed.

Seevers, J., having been of counsel, took no part in the decision of this ease.