Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1924-12-25


drawn for the same purpose. (See
stipulation in record page 275, Peter
Kildal testimony | am further salts
fled that the evidence shows that
there were architects certificates ion
hand sufficient to cover the payments
up to July 18th, 1923 After that date
payments, were made tel cover the ac-
tual cost of completing the building
In making the arrangement referred
to- the School District, am persuaded
acted in good faith and the moneys
so expended were used for materials
and labor that actually went into the
construction of the building.
Is the plaintiff, Surety Company, en-
titled to recover from the School Dis
trict on account of its failure to re-
tain the specified percentage, an
amount equivalent to such percen-
tage? Plaintiff contends it has such
right as matter of subrogation,
equitable assignment or upon the
theory that it acquired contractual
right to such fund measured by the
terms of the contract between the
School District and the contractor.
Plaintiffs right to recover, if it has
any, it seems to me, must be said to
be such as. is described in Pratt Lum-
Der Co. VS.. T. H. Gill Company, 27S
Fed, 1888, 1913, as "a contractuaI right
measured by the terms of the contract
between the owner of the property
and the contractor, which entities him
to the benefit of such provisions as
insure to the protection of the owner,
subject of course to his primary right
and reduces the liability of the surety
against loss of damage by the default
of the contractor"
The corresponding duty on the part
of the School District was to refrain
from SO using the reserved fund as to
injure the surety. An examination of
the cases, sustaining the claim of the
surety to the retained percentage, dis
closes that in the majority of them,
payments were made to persons hay-
ing no claim against the surety, gen
eral creditors of the contractor, for
example usually bank that had
made a loan to the contractor-or pay
ments, were made to the contractor
directly to be used by him as he
might see fit. The~payments made by
the School District from the reserved
fund in the instant case did not, in
my judgment, result in injury to the
surety, because made, in effect, to
those having claims, which, if not
paid, might be asserted against the
surety. The deviation was reason
able one, resorted to because of the
exigency of the situation and did not
result in damage to the plaintiff.
The failure to give notice of the de
fault of the contractor does not eff
feet the liabilities of the parties, there
being no provision in the contract re
quiring such notice. 1t is contended
by the surety that the provision of
the contract relating to modification
relates merely to plans and specifica-
lions. 1t would seem to me, however,
by it's terms to permit a reasonable
deviation from the contract itself
However, further discussion of that
subject is not necessary in view of
the Courts opinion with respect to the
of the School District as in
Dictated above.
Plaintiffs complaint against defen
dant, School District, must, therefore
be dismissed.
Defendant, School District, is EMIT
led to recover on its counterclaim
amount prayed for, to-wit: $1390.04
liability incurred for additional super
intendence; the sum of $4,000, liquid
ated damages up to the time the con-
tractor abandoned the work, and the
further sum of $214.48, paid by defen-
dant, School District, for replacing
motor and CRATES in heating apparatus
broken by the contractor.
Il Plaintiff is liable to the various
laborers and material men joined as
defendants herein in the following
amounts