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Waton v. Detroit Fidelity and Surety Co.

Decided: May 16, 1932.

BORUS WATON, RESPONDENT,
v.
DETROIT FIDELITY AND SURETY COMPANY, A CORPORATION OF THE STATE OF MICHIGAN, APPELLANT



On appeal from the Supreme Court.

For the appellant, Zucker & Goldberg.

For the respondent, Philip J. Schotland.

Bodine

The opinion of the court was delivered by

BODINE, J. The plaintiff sued upon a bond to secure the performance of a contract for the erection of a dwelling house and three-car garage at Nos. 118-120 Weequahic avenue, Newark. The defendant appeals from a judgment in favor of the plaintiff. There is no merit in any of the grounds of appeal argued before us.

On September 27th, 1928, Abraham Ginsburg entered into a written contract to build for Borus Waton the house in question. The agreement excluded plumbing, tinning, heating and gas pipe work -- trades carried on by Waton. The

contract was recorded and called for the payment of $14,000 for the work. The building was to be constructed with the approval of Edgar F. Hauser, and in accordance with his plans and specifications.

The Weequahic avenue property was not completed by January 31st, 1929, and on that day the principals entered into a supplemental written agreement. It appears therefrom that Ginsburg, a contractor, was building an apartment house at Nos. 796-798 Broadway, Newark, and that Waton was doing the plumbing, tinning, heating and gas piping work therein. The accounts between the parties were in some confusion and were settled as the agreement recites in the following manner: "It is hereby agreed that if and when Waton completes the plumbing, heating, &c., contract * * * in connection with premises 796-798 Broadway, Newark, New Jersey, bearing date May 18th, 1928, including the materials still necessary for said completion, and in settlement of other matters of account between the parties hereto Abraham Ginsburg will owe to said Borus Waton the sum of $15,261.00/100 and that if and when Abraham Ginsburg completes the above-mentioned building agreement in connection with premises 118-120 Weequahic avenue, Newark, New Jersey, Waton will owe to Abraham Ginsburg the sum of $14,000, so that upon the completion of said respective building agreements, Ginsburg will owe Waton the difference of $1,261 in final settlement of the accounts and the parties hereto agree to liquidate these counter-obligations by charging one off against the other which is hereby agreed upon as the method for payment of same, except as hereinafter modified."

The provisions for the payment of money to Mr. Schotland were made necessary because Waton had about four weeks work to do on the Broadway premises and it would take Ginsburg three months to complete the Weequahic avenue house. The construction required cash payments for payroll. Ginsburg paid to Mr. Schotland only $3,000. This money was disbursed in accordance with the supplemental agreement. Ginsburg failed to perform his contract and

abandoned the work. After notice to the principal and the defendant surety company, the plaintiff caused the work to be completed and brought this suit on the bond.

The surety company, when the bond was written, had before it both contracts. The bond contains the following recital and condition: "Whereas, the above bounden principal has entered into a certain written contract with the above named obligee, dated September 27th, 1928, and amendment dated 31st day of January, 1929, for the construction of a dwelling and three-car garage at Nos. 118-120 Weequahic avenue, Newark, New Jersey, except the plumbing, tinning, heating and gas piping works as per the specifications made by Edgar F. Hauser, architect, which contract and amendment are hereby referred to and made a part hereof as fully and to the same extent as if copied at length herein. Now, therefore, the condition of this obligation is such that if the principal shall indemnify the ...


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