Waldon v. Maryland Casualty Co.

Gilbert, J.,

dissenting. McDaniel & Calmes contracted to build for A. H. Waldon a residence for the lump sum of $6280. A bonding company contracted to indemnify Waldon on that contract. The bond was conditioned on the faithful performance of the contract on the part of McDaniel & Calmes. The contractors were to pay in full for all labor and material. They failed to complete their contract. The indemnity bond in terms provided, that, “in the event of any default on the part of the principal, a written statement of the particular facts showing such default and the date thereof shall be delivered to the surety.” In addition to failing to complete the building, the contractors failed to pay in full for labor and material. This failure to pay for labor and material resulted in laborers’ and materialmen’s liens and judgments against the owner; and these'were very important facts which should have been communicated to the surety, without notice of which the surety could not protect itself by seeing that the liens and judgments were justified under the facts and were based upon bona fide claims. They definitely increased the risk of the surety. The owner failed to notify the surety of the particular facts of the default of the contractors. The surety was merely notified to the effect that the contractors had failed to complete the building. Under these conditions, and under proper construction of the contract of suretyship, the owner failed to comply with his duty in regard to notice, and the surety company should be relieved of liability for liens and judgments of which they had no notice. This dissent from the third headnote is based on these reasons.