Court Opinion

ID: 3948008
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:10:29.949933+00
Date Added: 2024-06-11T13:52:53.310478
License: Public Domain

It is insisted by the sureties on the bond of the Davis Construction Company that the court erred in not giving judgment in their favor, in that they are legally released from liability under their contract, for: (1) The installment payment by A. P. Baldwin of $2,102.85 was made, as found by the court, without the issuance of a certificate of the architect for the payments; and (2) the payments by A. P. Baldwin before the time of the certified default by the Davis Construction Company were more than 75 per cent. of the value of the labor done and material furnished. As found by the court:
"After January 8, 1916, and up to January 19, 1916, A. P. Baldwin paid to persons and firms who had furnished labor and material to the Davis Construction Company the following amounts (itemized), totaling $2,102.85. No certificate of the architect was issued for these payments."
And, as further found by the court, at the time the above installment payments were made there was labor and material satisfactorily in place in the building exceeding the value of $2,940.45, "and at no time did A. P. Baldwin pay to or for the Davis Construction Company more than 75 per cent. of the amount of the labor and material satisfactorily in place in the building." The contract has the stipulation:
That the contract price shall, as the work progresses, "be paid by the owner to the contractors in current funds, and only on the certificates of the architect, no certificate to exceed 75 per cent. of the cost of the labor and material satisfactorily in place in the building at the time of the issuance of such certificates, and the final certificates of payment to be made on completion of the building, and all payments shall be due when certificates for the same are issued and upon satisfactory evidence, such as receipted accounts or releases for all materials and labor that have been furnished and used in construction of said building."
In the case of Childress v. Smith et al., 90 Tex. 610, 38 S.W. 518,40 S.W. 389, it was held that the owner of the building cannot, in a suit on the contract, be compelled by the contractors or sureties to make partial payments agreed to be made in the absence of the architect's certificate or proof made that the architect fraudulently or willfully refuses same. And in the case of Ryan v. Morton, 65 Tex. 258, and other cases following the ruling therein, it is firmly held that the sureties on the contractor's bond are released of their obligation when without their assent the contractual partial payments are made by the owner to the contractor faster than the terms of the contract provide. Contractual terms regulating payments to be made depending upon the progress made in *Page 978 
the work are a part of the contract, not peculiarly for the benefit of the owner of the building, but are also for the interest of the sureties on the contractor's bond, for such regulations give "a guaranty to the sureties that the work will not be paid for by the owner until it was done" by the contractor. And the stipulation in the contract that the owner of the building shall not be required to make installment payments on the progress in the work without the certificate of the architect for the payments is intended for the benefit and protection of the owner of the building. For the term of contract entitles the owner to the proof and assurance that the work and material is in accordance with the plans and specifications under the superintendence of the architect, and that the proper amount of money is due. As in the findings of the court in the instant case there is not involved any question of acceleration of payments or overpayments, the principle involved in the case of Ryan v. Morton, supra, is not applicable here. And as the instant suit is by the owner of the building, it is believed that the case of Childress v. Smith et al., supra, is not applicable here. For the certificate of the architect is but evidence to the owner that the work and material in the building at the time are according to the plans and specifications, and that the correct amount therefor is properly due the contractor. The production of the certificate can accomplish nothing more. The interest of the sureties on the bond in this stipulation is only in the fact that the money be actually paid for the work and material in the building. And, the issuance of the certificate in the progress of the work being for the benefit of the owner of the building, the owner may waive it at his option and accept other proofs of the fact. Blethen  Terry v. Blake et al., 44 Cal. 117. And it may be presumed that the payment by the owner in this instant case was, as provided, "upon satisfactory evidence, such as receipted accounts or releases for all materials and labor that have been furnished and used in construction of said building," and that there was by the owner a waiver, as he had the option to do, only of the certificate of the architect. For it is evident in the findings of the court that the labor and material was satisfactorily in place in the building according to the plans and specifications, and that 75 per cent. of the amount of such labor and material was then due to be paid by the owner under the contract. And it is concluded that neither the principal nor the sureties on the bond may legally claim a violation of the terms of the contract operating as a release of their obligation because of the mere fact that the owner of the building made the particular payments without the issuance of the architect's certificate for such payments. The first and fourth assignments of error are overruled.
The points presented in the second and third assignments of error are not, as we conclude, involved in the case, since legal effect is herein given to the terms of the contract.
The fifth assignment of error, we think, should be overruled; for the court finds as a fact:
"That in the erection of said building there was no material change from the plans and specifications according to which the structure was to be erected, as per the contract between the Davis Construction Company and A. P. Baldwin of date September 29, 1915; that such changes as were made were trivial and not material changes in said plans and specifications."
The provision that final certificate be made on completion of the building has application only when the contractor completes the building.
As no exception was taken to the ruling of the court or the order made consolidating cause No. 7945 with cause No. 7920, the assignment of error No. 1 by the appellant R. W. Patterson may not be reviewed by this court.
The second assignment of error by appellant Patterson challenges the findings of the trial court. The finding is:
"(13) Upon the issues made by the pleadings in the claim of R. W. Patterson against A. P. Baldwin for $524.71 for lumber claimed to have been furnished to the Davis Construction Company under the promise by A. P. Baldwin to pay therefor, I find that said lumber was furnished by R. W. Patterson to the Davis Construction Company, and that Baldwin did not agree to pay therefor either before or after the said lumber was furnished by Patterson to the Davis Construction Company."
As the evidence is conflicting, the finding so made by the trial court will not be disturbed.
The judgment is affirmed.