Marquette Opera House Building Co. v. Wilson

67 N.W. 123, 109 Mich. 223, 1896 Mich. LEXIS 832

• Court: Michigan Supreme Court
• Decided: May 12, 1896
• Status: Published

Opinion

Montgomery, J.

(after stating the facts). We think the defendants were entitled to show, under a plea of the general issue, that the plaintiff had money in its hands, due to Wilson & Moore under the contract, which was equal to the amount which it was required to pay to Bice, Pendill & Co. Indeed, the circuit judge so held, and applied a balance which was admittedly due under the claim, but held that the amount due Wilson & Moore for extra work could not be so applied, for the reason that the obligation to pay for these extras arose only after the architect had given an estimate therefor, and that this was not shown; that the defendants’ cause of' complaint, if any, was the failure of the architect to give estimates; and that this breach of contract, if any such existed, should have been set up in the pleadings. We think there was no error in this ruling. Had Wilson & Moore brought suit on the contract, it would have been necessary to aver this breach, and we think on this issue the plaintiff should have had notice of it. No offer was made to amend. Had there been, there is no doubt an amendment would have been permitted. •

The second question raised depends upon the construction placed upon the bond. On the part of the plaintiff it is contended that the bond should be construed as an absolute engagement to pay for labor and material, and that it follows that, on a failure of Wilson & Moore to do so, the plaintiff had the right to make payment and charge it to Wilson & Moore, and recover of the sureties on the bond. The defendants, on the other hand, while apparently conceding that, as to any claim which had become a lien upon the property, the plaintiff might take this course, contend that as to such demands not constituting liens, and particularly as to demands which, because of the lapse of time, had ceased to be liens, and were beyond the possibility of becoming liens, the plaintiff had no such right; that the condition of the bond as limited by the recital was not' so broad as to obligate the sureties to the actual payment of all claims for material and labor, but only to payment for such as were or might become liens. The plaintiff relies upon Knapp v. Swaney, 56 Mich. 345. That case was mandamus to compel the allowance by the building committee of the board of supervisors of a claim for building a courthouse. The relator stood in the shoes of the contractor, and the contract under which they were operating provided that the payments were to be made on estimates, but that, as a condition to such payment, it should appear that there was no legal or lawful claim against the contractor in any manner from any source whatever. The cases cited from Nebraska have followed Knapp v. Siuaney, but do not give much aid in the construction, of the instrument under consideration. It is to be noted that, in the contract between plaintiff and Wilson & Moore, the latter only undertook to deliver the building clear of liens, not to pay their debts for which liens did not exist. Presumptively, the bond executed, as the declaration avers, “in consideration of the execution of the contract,” was intended to insure the performance of some duty imposed by the contract upon the principals, Wilson & Moore. The bond recites the execution of the contract, the obligation of Wilson & Moore to construct the building, and deliver the said building free from any liens or incumbrances for labor or material used in the construction of the same. The condition is to pay for all labor or material used in the erection of the said building, and hold the said Marquette Opera House Building Company free from any obligations therefor. Is not this obligation met by paying such of the demands for labor and material as the opera house company is subject to be made liable for, if not met by the builders, or was it the intention, as expressed in this condition, to enlarge the obligation of Wilson & Moore, as expressed in the contract, and as contained in the recital of the bond? We think the former the true construction. It is well settled that the general words in the condition of any bond may be restricted by a particular recital. As was said by Lord Ellenborough in Payler v. Homersham, 4 Maule & S. 423: “Common sense requires that it should be so, and, in order to construe any instrument truly, you must have regard to all its parts, and most especially to the particular words of it.” In Bell v. Bruen, 1 How. 184, it was said: “The general rule is well settled, in controversies arising on the construction of bonds with conditions for the performance of duties, preceded by recitals, that, where the undertaking is general, it shall be restrained, and its obligatory force limited within the recitals.” See Sanger v. Baumberger, 51 Wis. 592. Under this construction, the plaintiff had the right to protect itself by payment of any claims which were at the time liens, and upon which Wilson & Moore were in default, or to pay any claims which might mature into liens, and upon which they were in default. But we think it was not within the contemplation of the parties that the plaintiff would be at liberty to make payments upon debts of Wilson & Moore for labor and material after such demands had ceased to be liens upon the property, and charge the sureties thereon.

The parties are not agreed upon the question of fact as to whether the plaintiff failed to retain the 15 per cent, provided in the contract. If, in fact, the plaintiff failed to retain this much out of the estimates, and the payments made were voluntary,—that is, made upon claims which were not and could not become liens,—the obligation of the sureties would be reduced pro tanto. Warre v. Calvert, 7 Adol. & El. 143; Bragg v. Shain, 49 Cal. 131; St. Mary's College v. Meagher, (Ky.) 11 S. W. 608.

The judgment will be reversed, and a new trial ordered.

The other Justices concurred.