Hurd v. Newbrook

I concur in the result reached by Titus, Ch. J., upon the ground that the guaranty, in this case, is to be construed as referring to the building contract to determine the time when payments fell due and for no other purpose. And, as it appears, the contract was finished to the extent of entitling Walty to two payments, it then became the right of plaintiffs, under the guaranty, to demand pay thereon, and that upon the proof here, without reference to the subsequent acts of Walty; for, if all the damage occasioned by Walty’s breach of contract be deducted, there still remained and was paid to him a sum sufficient and more than sufficient *42to discharge plaintiff’s debt. Under this construction, it is clear that a time came when Walty was entitled to demand a sum of money due upon the contract, exceeding the amount of plaintiffs’ bill. When that moment arrived, defendant’s guaranty attached and his contract then was to see plaintiffs paid. There is no hardship in this, for defendant then had it in his power to protect both himself and plaintiffs. He chose to permit payment to be made to Walty without seeing that it was properly applied and thereby assumed the risk of Walty’s default. This construction was overlooked by the court below, and in consequence the judgment must be reversed with costs.

Judgment reversed.

This action was brought in the Municipal Court to recover against the defendant for a bill of lumber furnished to one Abram Walty on a guaranty of payment. It appears that on the twenty-third day of July, 1891, William G-. Hewbrook, son of defendant George Hewhrook, contracted with Abram Walty to build him a house, according to certain plans and specifications contained in a contract, the work and material to he furnished by Walty. It was agreed that Walty should receive $1,450 for the job, $500 when one-third of the work' was done, and $500 more when two-thirds of the work was done, and $450 to be paid to said Walty when the house was completed and ready for occupancy. Some days after the date of this contract the plaintiffs made out a hill of lumber necessary to build the house and presented the same to *39George Uewbrook for Ms approval and guaranty. The defendant wrote upon the bill the following: “ I approve of the following bill amounting to $160 and agree to see it paid according to the terms of payment agreed to in the building contract. (Signed) George Eewbrook, July 29, 1891.” Thereupon the plaintiffs furnished to Walty the necessary materials for building the house. On. the nineteenth of October, and before Walty had completed his job according to his contract, he absconded, leaving the building unfinished and without having paid the plaintiffs the full amout of their bill. William G. Hewbrook, the owner, then proceeded to complete the house, at a cost of $275.12. There still remained, at the time of the commencement of this action, unpaid on the plaintiff’s bill $119.02. It is not quite clear from the evidence given on the trial how the account between Walty and William G. Kewbrook stands. He testifies that Walty abandoned his contract about the twentieth of October and that $1,080.60 was paid to him up to the nineteenth of October. Then, he says, the balance of the plaintiffs’ bill was $160 at that time; that he accepted the different liens and orders, and above that he had $212.10. The accepted orders were $65 for hardware and two liens for $53.58 and $75.20, respectively. Then, after completing the house for $275, he paid the plaintiffs $10.98 on their bill, which made the amount of the contract price, namely, $1,150. It is not stated anywhere in the case that the $1,080.60 paid to Walty includes the two payments to the plaintiff, but it probably does include the $300 paid them, as they received that amount before the date of his abandoning the contract, although they claim to have received it in checks from Hr. Hewbrook. On his cross-examination, the witness was asked by the defendant’s counsel: “ Leaving the liens out of the question, how much money has been paid out, first and last, on that house, all of it ? ” and the answer was, “$1,150.” This is exclusive of the two liens which amount to $128.83.

The validity of the liens and the amount unpaid to Walty, in the view which I have taken of this case, cannot be of *40much importance. The liens can only be enforced to the extent of any unpaid balance due the contractor, and it is apparent that at the time of filing the liens the contractor had been overpaid. It thus appears that William Gr. Rewbrook has paid the whole contract price for building his house, leaving the $119.02 of the plaintiffs’ claim unpaid. But I do not think the question is to be determined either from the fact that the contract price has been paid or of the failure of Walty to complete the work according to the terms of the contract. It is claimed that the guaranty was without consideration and cannot be enforced against the defendant. I think the delivery of the lumber was a sufficient considera^ tion for the guaranty. Before the plaintiffs would deliver the lumber they had a bill of it made out and submitted to the defendant for approval. On his approving and agreeing to see that it would be paid, the lumber was delivered to the contractor, on the faith of the guaranty. Under the authorities it was a sufficient consideration to uphold the undertaking of the defendant. Beakes v. Da Cunha, 126 N. Y. 293.

According to the contract of guaranty the defendant agreed to see the amount of the bill paid according to the terms of the contract, and it is necessary to examine the contract to determine how the payments were to be made. It appears that $500 was to be paid when the work was one-third completed and $500 more when two-thirds of the work was done and $450 was to be retained by Rewbrook until the work was finally completed, so that when the house was completed the whole amount became due. It is claimed that because the contractor, Walty, did not complete the work, but abandoned the same, and Rewbrook was obliged to complete it, that there was no compliance with the terms of the contract and hence nothing became due on the last payment. I do not think such a construction of the contract of guaranty is either just or tenable. The plaintiffs were not a party to the contract with Walty. It was no concern of theirs that the work was not well or completely done, and a failure of a contractor to carry out his contract cannot operate to deprive the plaintiffs of *41their remedy on the guaranty. We resort to the contract only to determine or to ascertain the terms of payment and they are to he construed as a part of the guaranty for that purpose. It does not create a condition precedent to the right of the plaintiff to maintain the action against the surety. It simply fixes the terms of payment and the time within which it is to be made, so that when the work was done, no matter who completes it, the surety becomes liable. Any other construction would put it in the power of the contracting parties to defeat any person who might furnish material relying upon a guaranty for payment. Evidently the defendant was interested in giving the contractor Walty credit with the plaintiffs that he might go on and build the house for his son.

The lumber was furnished by the plaintiffs, relying upon the assurance expressed in the writing of the defendant that Walty would pay, or in default thereof that he would pay the amount of their bill. The contract of guaranty construed With the undertaking of Walty is a complete and perfect contract, fidfilling all of the essential requirements of the cases cited by the counsel for the defendant. Since the amendment to the Revised Statutes in 1863 it is not necessary to express a consideration in the instrument guaranteeing against the default, of another, and the cases cited upon that question are not in point here.

The judgment should, therefore, be reversed with costs.