Knutson v. Metallic Slab Form Co. ( 1942 )

PER CURIAM.

Both the appellant and the appellee Western Casualty & Surety Company have filed motions for rehearing. We purposely did not decide whether the Farm Implement Building was additional work under the contract or a new and independent work separately undertaken. That question remains open, together with a consideration of the consequences of the one conclusion or the other, and with liberty to the parties to amend their pleadings to meet them. We purposely refrained from adjudicating any of the details of the accounting to be taken, including the question what amount of the South Texas Lumber Company bill may have been furnished a previous contractor and what part was separately furnished to Metallic Slab Form Company. We intend that the District Court shall have a free hand in all respects to make a just and legal accounting among the parties.

The surety was bound to see that his principal performed the contract. The reserved percentages of the monthly estimates were only a security for performance, held for the benefit of the owner and surety. When the principal became unable to perform and the surety renounced his obligation, the owner could use the security for' his own and the surety’s benefit in completing the contract. The surety is not discharged by this use of the reserved percentages under these circumstances.

The motions for rehearing are denied.