The findings of fact by the referee and the trial judge establish substantially the following fact-status: When Clark, the contractor, defaulted, the hoard of education had in hand, applicable to the contract price, the sum of $3,067.50 plus the Murchison Bank item of $132.50, making a total of $3,200. If said board had complied with the contract with respect to the retained percentage, as it had agreed to do, it would have had in hand, applicable to the contract price, the sum of $4,375.20. When the default occurred it was the duty of the surety to complete the building. The surety, however, waived its option and the board of education, as it had a right to do, thereupon proceeded to complete the building and paid therefor the sum of $3,079.56. Therefore, the difference between what the board should have had in hand from the retained percentage and what it paid out to complete the building was $1,295.64. Manifestly, when the contractor defaulted and the surety failed to complete the building the board of education had the right to use all funds in its hands, applicable to the contract price, for the completion of the building, there being no evidence of any unreasonable expenditures in the work of completion. In other words, if the board had complied with the contract with reference to the retained percentage, it would have had in hand, after the completion of the building, the sum of $1,295.64. This sum, being a part of the retained percentage, inured to the benefit of the surety that had paid claims of laborers and materialmen in excess of said sum. The identical point was discussed in Crouse v. Stanley, 199 N. C., 186, 154 S. E., 40, where it is written: “If the owner had complied with the agreement entered into between the parties he would then have in hand to turn over to the surety the sum of $4,202.80, and thereupon the surety would be fentitled to said sum to apply upon the completion of the work. No such amount was available, and thus the surety was deprived of a credit to which it was entitled under the law.” Mfg. Co. v. Blaylock, 192 N. C., 407, 135 S. E., 136.
*357The fact that tbe board, on 8 October, 1924, paid to the contractor the sum of $5,506.38, when it had notice of outstanding bills in the sum of $3,057.40, imposes no liability upon the board upon the facts disclosed by this record. Hutchinson v. Commissioners, 172 N. C., 844, 90 S. E., 892; Warner v. Halyburton, 187 N. C., 414, 121 S. E., 756; Mfg. Co., v. Blaylock, 192 N. C., 407, 135 S. E., 136.
The plaintiff cannot complain of the judgment against the board for $132.50 in favor of Murchison Bank for the reason that the board does not appeal from the judgment.
The court is of the opinion, upon the facts found and set out in the record, that the plaintiff is entitled to recover of the board of education the sum of $1,295.64. No recovery is permissible against the individual members of the board. Noland v. Trustees, 190 N. C., 250, 129 S. E., 577.
Modified and affirmed.