Case ID: mo-app_80/html/0036-01.html
Source: Caselaw Access Project
Author: {"author": "BIGGS, -I.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Suburban Mutual Building and Loan Association, Respondent, v. J. D. Paulus et al., Defendants; John M. Sellers et al., Appellants.
    St. Louis Court of Appeals,
    April 18, 1899.
    1. Building Contract: indemnifying bond: evidence. There are two means of identifying the contract referred to in the bond, namely, the fact that the contract was of the same date as the bond, or proof that it was attached to the bond, at the time the latter was signed. Held, that if neither of the above facts should appear, yet if it be shown that the contract relied on was in fact in existence, that it had been signed and the sureties were so advised and that they contracted in reference to it, this would be sufficient to carry the question of the identity of the contract to the jury.
    2. Practice, Trial: form of judgment. The judgment of the trial court should have been for the penalty of the bond with execution for the damages assessed by the jury.
    
      Appeal from the St. Louis City Circuit Court. — Hon. Leroy B. Valliant, Judge.
    Reversed and remanded (with directions).
    Frederick A. Wind for respondent.
    The answer admits the execution and delivery of bond and contract sued on. It nowhere raises the issue made on the trial that no contract was annexed at the time of execution of the bond, or that the contract now annexed was subsequently made. The question of the identity of the contract was presented to the jury under instruction number 2 asked by plaintiff, and instructions 3 and 4 asked by defendants. The verdict is conclusive on that question of fact. Oberbeck v. Mayer, 59 Mo. App. 298; s. c., 67 Mo. App. 249. The building association does not claim any greater rights than Mrs. Tracy possessed. What it paid in discharge of lien judgments and for counsel fees was for her benefit and she so recognized it by-making formal assignment of the bond. If the bond were not assigned she could maintain an action for her own use, as payments made by the building association as mortgagee became an additional charge on her real estate. The bond was delivered to the building association as additional security to the mortgage or deed of trust. It was not necessary to offer expert testimony on the subject and the jury would not be bound by their opinion. Cosgrove v. Leonard, 134 Mo. 419. This was not an action by counsel for fees; it was an action upon a bond conditioned to keep “Laura E. Tracy harmless and indemnified from and against all and every claim, demands, judgments, liens and mechanic’s liens, costs and fees of every description incurred in suits or otherwise.” The amount paid isprimafaeie the damages. If the admission of Hayden’s testimony concerning reasonableness of fee was error, it is harmless and this court is prohibited by statute from reversing a cause except for “error materially affecting the merits.” R. S. 1889, sec. 2303. An error seems to have been made by the circuit clerk in entering the judgment, as it was entered for the amount of the damages, instead of for penalty of the bond with execution for damages as required by statute. R. S. 1889, sec. 869.
    Rassieur & Rassieur for appellants.
    When a bond recites that it is given for the performance of a contract of a stated date, and that it is annexed to suoh contract, bnt it is in fact subsequently annexed to a contract of a- subsequent date, tbe sureties in the bond can not be held for tbe performance of tbe latter contract, except upon proof that they authorized the annexation, or knew when they signed the bond that it related, or was to be annexed to, such latter contract. Overbeck v. Mayer, 59 Mo. App. 289. The assignee of a bond can have no greater rights against the sureties than the original obligee. Lie can only recover the amounts paid and damages sustained by the original obligee, and not damages which the assignee may have sustained. 4 Am. and Eng. Ency. of Law [2 Ed.], p. 648, note. If such value could be said to be a matter of common knowledge, then the question calling for the witness’ opinion was also improper. Benjamin v. Railway, 133 Mo. 274, 289; State v. Dusenberry, 112 Mo. 277, 292. A judgment upon a bond simply for damages, and not for the penalty, is erroneous. State to use v. Eitzpatrick, 64 Mo. 185; State ex rel. v. Cooper, 79 Mo. 464; R. S. 1889, sec. 869.
   BIGGS, -I.

This is an action on a builder’s bond. The breaches assigned are, that the contractor failed to pay for materials used in the construction of the building; that in consequence thereof mechanic’s liens were filed against the house to secure the amounts of the unpaid claims; that judgments were rendered on the claims and enforcing the liens, and that the plaintiff as the beneficiary in a deed of trust on the property and as the holder of the bond as additional security for its debt, was compelled to pay the amounts of the judgments and the costs of suit. The bond bears date May 25,1891, the penalty is $2,500, and it was signed by the Paulus & "Williamson Architectural Company (the contractor) as principal, and by John D. Paulus, D. C. "Williamson, John M. Sellers and T. E. Hayden as sureties. Laura B. Tracy ¿s named as obligee. The conditions of the bond are "that whereas the said Paulus & "Williamson Architeotural Company had upon the day of these presents executed and entered into a certain contract for the erection of certain buildings in said contract described: Now if the said Paulus & Williamson Architectural Co., shall well and truly perform and fulfill all and every covenants, conditions, stipulations and agreements in said contract mentioned to be performed and fulfilled, and shall keep the said Laura B. Tracy harmless and indemnified from and against all and every claim, dpmand, judgments, liens and mechanic’s liens, costs and fees of every description incurred in suits or otherwise, that may be had against her or against the buildings to be erected under said contract * * * then this obligation shall be void,” etc. Judgment was asked for the. amounts of the judgments and costs in the mechanic’s lien suits, and also $50 attorney fees expended by plaintiff in defending the suits.

The defendants Sellers and Hayden admitted in their separate answers that they signed the bond, and they averred that whatever work was done or materials furnished by the Paulus & Williamson Architectural Company in the construction of the house for Mrs. Tracy, “was done or were furnished under and in pursuance of the contract between said parties, which is recited and referred to in the bond.” The answer then set up various changes in the work without their knowledge and consent, and other special defenses which need not be set forth, as no assignments of error-are made concerning them.

At the trial it was undisputed that the plaintiff satisfied two judgments enforcing mechanic’s liens against the house, one for $213.35, and the other for $168.80, and that it also paid $50 attorney fees in defense of the suits. The plaintiff introduced testimony to the effect that at the time' it paid the judgments it held a deed of trust on the property to secure a debt due it from Mrs. Tracy; that it also held the bond in suit as additional security for its debt and that subsequently Mrs. Tracy made an absolute assignment of tbe bond to plaintiff in consideration of tbe amount so paid in satisfaction of tbe judgments. Tbe contract relied on and read in evidence by tbe plaintiff is dated on tbe eigbtb day of June, 1891, whereas tbe bond is dated on tbe twenty-fifth of May, 1891. Tbe contention of Hayden and Sellers was tbat tbis contract was not tbe one mentioned in tbe bond, tbat it is essentially different from tbe original contract, and tbat after tbe execution of tbe bond it was substituted for tbe original and tbe work thereunder was done without tbe knowledge of tbe sureties, wherefore they denied liability. Their evidence tended to prove tbis state of facts. On tb© other band tbe plaintiff’s evidence tended 'to prove that there was but one contract, namely, tbe one read in evidence, and tbat it was executed simultaneously with tbe bond in suit; tbat tbe obligors in tbe bond knew of its existence and contracted in reference to it. Tbe jury returned a verdict for $525 damages, and instead of tbe court entering tbe statutory judgment for tbe penalty of tbe bond and providing' for execution for tbe amount of damages assessed (R. S. 1889, sec. 869), it entered an ordinary judgment for $525. Tbe defendants Sellers and Hayden have appealed.

Tbe liability of Sellers and Hayden is stricUssvmi jwris, and to bold them on tbe bond it devolved on tbe plaintiff t© show by competent proof tbat tbe contract of date June 8, wag in existence at tbe time tbe bond was executed, to wit, May 25, and tbat it is tbe identical contract referred to in tbe bond, and tbat it was either attached to tbe bond at tbe time, or tbat tbe sureties were advised of its existence when they signed tbe bond and knew tbat it was tbe contract referred to in tbe bond. Tbis court in tbe case of Oberbeck v. Mayer, 59 Mo. App. 289, indicated two means of identifying tb© contract in such a case, namely tbe fact tbat tbe contract was of tbe same date of tbe bond, or proof tbat it was-attached to tbe bond at tbe time tbe latter was signed. While these means of identification are the most satisfactory, we do not think that they are exclusive. If neither of these facts should appear, yet if it be shown that the contract relied upon was in fact in existence, that it had been signed and the sureties were so advised, and that, they contracted in reference to it, this would be sufficient to carry the question of the identity of the contract to the jury. The plaintiffs evidence tended to make out such a case and the instructions on both sides submitted the issue upon that theory. The instruction of the defendant is as follows:

“The court further instructs the jury that it is incumbent upon plaintiff to prove that the contract under which said building was erected for Laura B. Tracy, was the same contract referred to in the bond signed by the defendants Sellers and Hayden, and unless you find it to be a fact that the contract dated June 8,1891, was the contract referred to in the bond of May 25, 1891, and that said contract was in existence and was executed by the parties at the time of or simultaneously with the execution of the bond by Sellers and Hayden, then you must find a verdict for defendants Sellers and Hayden.”

We therefore rule that the question of the identity of the contract was properly submitted to the jury and the finding being against the sureties, they aré bound by it.

It is urged that as Mrs. Tracy paid nothing on account of the defaults of the principal in the bond, and the plaintiff paid nothing subsequent to the absolute assignment of the bond to it, there-are no breaches of the bond for which plaintiff can sue. There are two answers to this: First, at the time the plaintiff paid the judgments it held a deed of trust on the land which was subordinate to the liens of the judgments, and it held the bond as additional security for its debt. Second, under the terms of the deed of trust the amounts so paid by plaintiff became a part of the mortgage debt. Hnder the first an independent right of action on the bond accrued to plaintiff upon tbe satisfaction by it of tbe judgments. Under tbe second state of facts, by redeeming tbe bond from the pledge Mrs. Tracy could bave main-tamed an action tbereon on account of tbe payments made by plaintiff, as sucb payments became additional charges against her real estate, and this right passed to tbe plaintiff by tbe assignment of tbe bond, thus giving plaintiff the two-fold right to sue tbereon. .

Tbe secretary of tbe plaintiff corporation testified that tbe plaintiff paid $50 to its attorney for defending tbe suits to enforce tbe mechanic liens. He also stated that tbe fee was reasonable. This last statement was objected to by the appellants, tbe contention being that tbe witness was not qualified to speak as to tbe reasonableness of tbe fee. Although tbe witness is not a lawyer, we are inclined to think that bis opinion was worth something. He testified that be personally managed tbe suits, and that be bad a great deal of experience in sucb litigation.

The judgment is erroneous and must be corrected either in this court or in tbe circuit court. As to tbe form of tbe judgment tbe statute is plain and mandatory. It should have been for tbe penalty of tbe bond with execution for tbe damages assessed by tbe jury. (State v. Fitzpatrick, 64 Mo. 185.) Tbe better practice is to bave tbe correction made in tbe circuit court. Tbe judgment will therefore be reversed and tbe cause remanded, with directions to tbe circuit court to enter tbe proper judgment. Notwithstanding tbe reversal tbe costs of tbe appeal will be taxed against tbe appellants. This court decided in McCord v. Railroad, 21 Mo. App. 317, that the appellant can only recover tbe costs of tbe appeal when be succeeds in having tbe judgment changed or modified to bis advantage.

All tbe judges concur.