Case Name: Kunz and another, Appellants, vs. Boll and others, Respondents; Same, Respondents, vs. Pitz and others, imp., Appellants
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1909-06-03
Citations: 140 Wis. 69
Docket Number: 
Parties: Kunz and another, Appellants, vs. Boll and others, Respondents. Same, Respondents, vs. Pitz and others, imp., Appellants.
Judges: KeewiN, J. I concur in the foregoing dissent of Mr. Justice TiMLiN.
Reporter: Wisconsin Reports
Volume: 140
Pages: 69–73

Head Matter:
Kunz and another, Appellants, vs. Boll and others, Respondents. Same, Respondents, vs. Pitz and others, imp., Appellants.
May 13
June 3, 1909.
Principal and surety: Building contracts: Discharge of surety by advance payments.
Where the date of the actual completion of a building was September 20, and, as early as June 9, payments had been made to the contractor aggregating upwards of $2,0Ó0 in excess of the amounts stipulated to be paid prior to the final completion of the building, the amount of the advanced payments and the length of time in which they antedated the time when they should have been paid are such material variances from the contract as absolutely discharge the contractor’s sureties. Timlin and Kbbwin, JJ., dissent.
Appeals from a judgment of the circuit court for Mani-towoc county: Michael KlrwaN, Circuit Judge.
Affirmed on plaintiffs’ appeal; reversed on that of defendants.
The plaintiffs had a contract with the nominal defendant, Boll, for the construction by the latter of a certain building and payment by the plaintiffs for the completed building of $18,360, “all payments to be on certificates of said architect as the work progresses, to wit: $4,000 on completion of foundation; $3,000 on completion of first story; $3,000 on completion of second story; $3,000 on completion of third story; $3,000 on completion of building; and balance sixty days thereafter, reserving fifteen per cent, of each estimate until final certificate is issued.” The defendants other than Boll were a copartnership engaged in business as a bonding company, and in that capacity, for a compensation of $50 paid by Boll, gave a bond in the penal sum of $5,000 to the plaintiffs conditioned that Boll “shall well and truly furnish all the material and labor to be used and employed in the erection of a certain brewery building” according to the aforesaid contract. Boll completed the building September 20, 1905, prior to wbicb time there had been paid him a total of $15,100, in various sums, much of it before any certificates were given by the architect, but whether, as to some early payments, before the work had progressed to the prescribed stage, does not appear. On that day the contractor and the plaintiffs, together with the architect, had an accounting, ascertained that extra work had been done to the amount of $979.27, and there was then issued a certificate for the balance of $1,239.27. Lienable claims for labor and materials existed, which plaintiffs were obliged to pay, to an amount in excess of this balance. This action was brought to recover an alleged excess of such claims of about $2,700. The court made certain deductions of about $2,000 and rendered judgment against the sureties for $768 and interest and costs. From the whole of this judgment the defendant sureties appeal, and from the disallowance of the $2,010.58 the plaintiffs appeal.
For the plaintiffs there were briefs by Nash & Nash, and oral argument by L. J. Nash.
For the defendants there were briefs by Hougen & Brady, and oral argument by A. L. Hougen.

Opinion:
Dodge, J.
Among the defenses interposed was that the owner and the principal contractor had modified the contract to the prejudice and consequent discharge of the sureties by paying large amounts of money thereon before the same was due according to its terms. This was supported by a showing that in the earlier stages of the work large amounts had been paid without any formal certificate of the architect, but the evidence is not so clear that they Were paid before the money was earned according to the provisions of the contract, and there might well be doubt whether they were effective to. release the sureties under the rule on the subject declared in Madison v. Am. S. E. Co. 118 Wis. 480, 95 N. W. 1097. It was made to appear conclusively, however, and indeed declared by the findings, that the building was not completed un til September 20th, and that as early as June 9th there had been paid to the contractor the sum of $15,100, while by the express terms of the contract only $13,000 was to be paid to him prior to the final completion of the contract. The efficacy of substantial advance payments upon contracts to discharge sureties is too well settled by the authorities in this state to warrant discussion. The prejudicial effect thereof to the surety has been found both in the removal of the incentive to the contractor to'diligently press his work and from the diminution of the fund which the contract contemplates to remain in the owner's hands and which may serve as a means of protecting the sureties from liability. Stephens v. Elver, 101 Wis. 392, 77 N. W. 737; Cowdery v. Hahn, 105 Wis. 455, 81 N. W. 882; Lowe v. Reddan, 123 Wis. 90, 93, 100 N. W. 1038. In the present ease it cannot be doubted that both the amount of the advanced payments and length of time in which they antedated the time when they should have been paid were material. In that respect they bear no resemblance whatever to the mere trifling variance from the contract presented in Stephens v. Elver, supra. For this reason we must hold that before the completion of the contract the sureties had been absolutely discharged from their liability, and no judgment can be had against them, which conclusion renders it unnecessary for us to consider the various other contentions.
By the Court. — Judgment reversed on defendants' appeal, and cause remanded with directions to dismiss the complaint; plaintiffs to take nothing on their appeal.