Opinion ID: 1403474
Heading Depth: 1
Heading Rank: 1

Heading: Rancho-Sahara Subcontract:

Text: As already indicated, Zuni sued the surety for $17,764.00 claimed to be due on this project. Of that amount $12,681.85 is admittedly for the default of White, the principal on the bond, in not paying for the cement he had purchased. The change in the subcontract between White and Zuni Construction which required White to buy the cement and pay for it was a material change which increased the contract price approximately 32% and accordingly increased the risk of the compensated surety to his prejudice in the sum of $12,681.85. To this extent the lower court ruled correctly that the surety was discharged. The court erred, however, in discharging the surety for the full amount of Zuni's claim and trial should occur as to the balance of its claim in the amount of $5,083. We apply the principal enunciated by Restatement of Security § 128(b) that when the contract change results in an easily measured damage to the compensated surety so that the penalty of a total discharge of the surety would be disproportionate to the blame attaching to the creditor for the modification, the surety is discharged only to the extent of its loss. See also Reliance Ins. Co. v. Colbert, 124 U.S.App.D.C. 339, 365 F.2d 530, 535 (1966).