Court Opinion

ID: 8194109
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:17:14.931094+00
Date Added: 2024-06-11T16:40:42.392248
License: Public Domain

Crownhart, J.
(dissenting). The surety contract was for pay, and the old rules of gratuitous surety do not apply. A surety for a consideration is held to be an insurer of the performance of the principal contract. Milwaukee B. S. Co. v. Illinois S. Co. 163 Wis. 48, 157 N. W. 545; Builders L. & S. Co. v. Chicago B. & S. Co. 167 Wis. 167, 166 N. W. 320.
The principal contract here called for the building of a school house according to specifications of the architect within a given time, payments to be made to the contractor or his assigns on the certificates of -the architect.
The building was not completed on time, but the contractor continued work on the building through its superintendent and subcontractors four and a half months from the date of the expiration of the contract, and then with the consent of the surety turned the building over to the school district for completion. On January 8, 1918, the contractor made a short-time loan of the First National Bank of Platteville to meet its payrolls and other bills incurred under its building contract. The money so borrowed was for the benefit of the surety as well as the school district plaintiff. On April 8th following, the contractor gave an order on the plaintiff to pay the bank out of any moneys due or to become due it under the contract. The plaintiff accepted the order and thereafter, upon certificates of the architect, it paid the bank just as provided under the terms of its contract. This court now holds that the plaintiff should have withheld that money for the benefit of the *216surety. Why? The contracts of the principal and surety did not so provide.
The plaintiff acted with patience and the utmost good faith with the contractor and the surety. Neither the contractor nor surety in good faith complied with their contracts after it became apparent that the contracts would be unprofitable. They laid down on the job and went begging to the plaintiff for charity amounting to from $7,000 to $10,000. The surety now insists that the plaintiff should stand the loss that it has assumed for pay. As I see it, the court relieves the surety from its contract without warrant of law, and places the burden of loss upon the plaintiff contrary to its contract with the surety. See 9 Corp. Jur. 861.
For these reasons I respectfully dissent.