O'Neal v. Kelley

47 S.W. 409, 65 Ark. 550, 1898 Ark. LEXIS 111

• Court: Supreme Court of Arkansas
• Decided: October 1, 1898
• Status: Published

Opinion

Riddick, J.,

(after stating tlie facts). This is an action upon a bond given by O’Neal to Kelley for the performance of a building contract. The contract, for the full performance of which the bond was executed, required that, for the sum of $2,000 to be paid by Kelley, O’Neal should furnish materials and erect a brick building, the lower story of which should be 96 feet long and 14 feet high, and the upper story 75 feet long and 12 feet high. During the progress of the work, O’Neal contracted with Kelly that, for the additional sum of $25 paid him by Kelley, he would build the upper story 96 feet long instead of 75 feet¡ as required by the original contract. The appellant sureties contend that this alteration of the contact discharged them from further liability on the bond, and we are of the opinion that this contention must be sustained.

“The contract by which a surety becomes bound,” says the Supreme Court of Pennsylvania, “is voluntary on his part, without profit or advantage, and without having in view the prospect of gain. It is an act of benevolence to the obligor, and of convenience to the obligee; and of emphatic use to both. The obligations of social duty require, therefore, tint he should be dealt with in fairness, and in a spirit of tl:e utmost good faith. The obligor and the obligee are bound to know that if they find it convenient to change or vary thí terms of the original contract, they must seek the assent ol the surety, because it is his contract as well as theirs. And if they will not do so, they take upon themselves the hazard, and thus loosen the bonds of the surety.” Hibbs v. Rue, 4 Pa. St. 348.

Any material alteration in the terms of such a contract discharges the surety if he has not consented to the change, and this is so even if the alteration be for the benefit of the surety; for, although the principals may change their contract to suit their pleasure or convenience, they cannot thus bind the surety; and as the new contract abrogates the old, the surety is discharged from all liability uuless he has consented to the alteration. Warden v. Ryan, 37 Mo. App. 466; Judah v. Zimmerman, 22 Ind. 388; Simonson v. Grant, 36 Minn. 439; Bethune v. Dozier, 10 Ga. 235; 24 Am. & Eng. Enc. Law, 837; 2 Brandt, Suretyship, §§ 278, 288.

The alteration of the contract shown in this case was material, and there is nothing to show that the sureties con - sented thereto. It required that O’Neal should erect a building of dimensions different from that required by the original contract, and for which he was to receive a different consideration. It called for the erection of a more expensive building, but no extension was made in the time within which the building was to be completed. As the sureties had undertaken that O’Neal should complete the building within a limited time, an alteration of the contract, by which he was required to build a larger and more expensive building within the same time, was, in our opinion, not only material, but directly against the interest of the sureties; and, as the same was made without their consent, it clearly operated to discharge them.

The fact thát Kelley refused to agree to the alteration until O’Neal the contractor had assured him that it would not affect the original contract is a matter of no moment, for O’Neal did not represent the sureties, and they are^not bound by his opinion on a question of law. Nor does the fact that he afterwards failed to carry out the contract as altered affect the question. It is the execution of the new contract, and not the performance thereof that discharges the surety.

There is no dispute about the facts of this ease, and, after considering the same, we are of the opinion that the judgment of the circuit court against the sureties of O’Neal is not supported by the evidence. The judgment as to them is reversed, and the case is dismissed; but as to O’Neal it is affirmed.