On appeal from the Atlantic County Circuit Court.
For the appellant, George A. Bourgeois.
For the respondent, Cole & Cole.
The opinion of the court was delivered by
PARKER, J. The suit is against a surety for the faithful performance of a subcontract relating to the construction of a building. The defense principally, if not solely, relied on, and now argued here, is that plaintiff paid to defendant Cobb, its subcontractor, for whom appellant Best was surety, "moneys in advance of the due dates and time provided in said agreement between the plaintiff and said Cobb, and without the knowledge and consent of this answering defendant [surety] and thereby released this defendant from liability on said bond." Only two grounds of appeal are argued, viz., No. 1, that the court refused to direct a verdict for defendant, and No. 6, which reads as follows:
"Because the court erred in charging the jury that plaintiff was entitled to recover $3,556.33, plus $1,419.76, in all $4,976.09, without allowing credit for $1,392.60, balance on the contract at the time the plaintiff took over the work."
In order to understand the points made, it is necessary to examine in part the text of the guaranty, and to discuss briefly the history of the case.
1. The guaranty is in form a bond, in the penal sum of $6,700 by Cobb as principal and Best as surety, reciting that Cobb has entered into a contract with Somers Lumber Company (hereafter called Somers), a copy whereof was annexed to the bond, and conditioned for the faithful performance by Cobb of that contract, and to reimburse and repay Somers for outlay incurred in making good any default, and to pay
all persons who have contracts directly with the principal for labor and materials. The bond also contains the following special clause: "and provided that any alterations which may be made in the terms of the contract, or any of the work to be done under it, or the giving by the said Somers Lumber Company of any extension of time for the performance of the contract, or any other forbearance on the part of either the Somers Lumber Company or the principal to the other, shall not in any way release the principal and the surety, or either of them, their heirs, executors, administrators, successors or assigns from their liability hereunder, notice to the surety of any such alteration, extension or forbearance being hereby waived."
After Cobb had been paid all but $1,392.60 of the contract price of $6,700 he came to Somers on April 23d, 1927 (a Saturday), and told Mr. Roberts of that company that he had a payroll of fourteen hundred and odd dollars and no money to meet it, and unless Somers would meet the payroll or put up the money he would have to quit. After a short colloquy, Roberts and Cobb went to see Best, who was asked, and refused, to advance the money for the payroll, and refused also to endorse Cobb's note, which Somers offered to cash with that endorsement. Roberts and Cobb then went to see counsel for Somers, and counsel drew two papers -- the first of which is a notice by Cobb to Somers that he cannot go on unless the $1,419.76 is advanced, and saying in part: "If it is not paid to-day, there is a possibility of a successful demand by the laborers for continued pay although they do not work until the amount is paid, and the further possibility that no one else will be allowed to work on the work which I agreed to do for you, until the same is paid." The other paper is a notice by Somers to Best which reads as follows:
"Referring to the contract of December 27th, 1926, between Somers Lumber Co. and William H. Cobb, Jr., and your indemnity bond of the same date in which you agreed to indemnify us against loss, &c. We are appending a notice which ...