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National Surety Corp. v. Wymore
Citations: 4 Wis. 2d 304; 90 N.W.2d 593; 1958 Wisc. LEXIS 401
Court: Wisconsin Supreme Court; June 3, 1958; Wisconsin; State Supreme Court
Wymore's application for a surety bond includes two critical provisions integral to the suretyship contract. First, Wymore agrees to indemnify the surety corporation against all liabilities, costs, damages, legal fees, and expenses incurred as a result of executing the bond, including actions taken in investigations or litigation related to the bond. Evidence of any payment made in good faith by the corporation will serve as prima facie evidence of Wymore's liability for those payments, regardless of whether they were strictly necessary. Second, the corporation reserves the right to take possession of any part of the contracted work if deemed necessary, with the expenses incurred for completing or re-letting the work charged to Wymore. If Wymore had abandoned the project, the surety would be required to address the defaults; however, the absence of abandonment does not absolve the surety's obligation to act and seek reimbursement from Wymore for incurred expenses. The document details complaints from the city regarding Wymore's performance, including a letter from the city attorney expressing concern over a lack of progress on a sewer project and urging Wymore to resume work. Following Wymore's removal of equipment, the city issued a warning on September 20, 1954, indicating intentions to terminate the contract due to Wymore's inadequate supervision and unsafe working conditions. Evidence suggests that improper cribbing of the trench posed safety risks, and Wymore lacked the necessary tools and equipment for timely contract completion. Two streets were blocked, and the gutter and watercourses were not maintained, violating the contract between the city and Mr. Wymore. The contractor was given ten days to rectify these issues or the contract would terminate. On September 20th and 30th, representatives of the surety discussed the situation with Wymore and city officials. The surety's bond guarantees Wymore's contract performance and protects the city from claims and damages up to $9,000. Questions regarding Wymore's potential abandonment of the project or the nature of his discharge are relevant to a breach of contract action but not decisive for the current issue. The central question is whether the surety can, in good faith and at Wymore’s expense of $2,961.04, take over the work as permitted by the contract's application, or if it must remain liable for $9,000 until Wymore and the city resolve their issues. The court determined that the dispute between Wymore and the city does not restrict the surety's discretion to complete the work, affirming the trial court's decision.