School District No. 3 v. DeLano

Citations

• 96 Kan. 499
• 152 P. 668
• 1915 Kan. LEXIS 419

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>1. Building Contract — Indemnity Bond — Withholding Final Payment— Terms of Bond. A guaranty company insuring the performance of 'a building contract for profit is not entitled to insist upon the withholding of the final payment, or that a percentage of the contract price shall be retained until(the completion of the building, unless it is specifically provided for in the contract with the guaranty company.</p> <p>2. Same — Material Damage Must be Shown. In any event, such company has no right to complain of the time and manner in which payments are made by the owner unless it has been damaged in a material way by a departure from the provisions of the contract and of the obligation which it assumed.</p> <p>3. Same — Alterations in Plans — Guarantor Not Released. The guaranty company is not entitled to a release from its obligation because of alterations in the plans and specifications which are not unreasonable, where the contract specifically provides that alterations may be made.</p> <p>4. Same — Default of Contractor — Liability of Guaranty Company. The guaranty company is liable for the principal debt which arises from the nonperformance of the contract to the amount of the penalty named in its obligation, and in addition to that it may be held for interest on such debt from the time it should have been paid, although the amount of the principal and interest should exceed the penalty of the bond.</p> <p>5. Same — Liquidated Damages. Where the contractor agrees to become liable for liquidated damages at a certain rate per day for failure to complete the building at a fixed time, and he fails to finish it at the time agreed upon, and also abandons the work before completion, and the guaranty company does not, upon notice, complete the building itself, it devolves upon the owner to do so, and to commence the work within a reasonable time after the default and abandonment, and if he does so and prosecutes it with reasonable diligenc