American Surety Co. of New York v. Alamo Iron Works

29 S.W.2d 493, 1930 Tex. App. LEXIS 613
CourtCourt of Appeals of Texas
DecidedMay 28, 1930
DocketNo. 1969.
StatusPublished
Cited by5 cases

This text of 29 S.W.2d 493 (American Surety Co. of New York v. Alamo Iron Works) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Surety Co. of New York v. Alamo Iron Works, 29 S.W.2d 493, 1930 Tex. App. LEXIS 613 (Tex. Ct. App. 1930).

Opinion

WALKER, J.

On the 27th day of July, A. D., 1927, Charles Dahl entered into a written contract with Dayton Independent School District to alter and repair certain of its school buildings, and to build for it new certain school buildings. The price named in the contract for this work was $86,415.44. The contract provided for the execution of a bond to secure its faithful per- . formance. On even date with the date of the contract Dahl executed the bond, as provided therein, payable to the Dayton Independent School District in the sum of $43,207.72, with American Surety Company of New York as surety, conditioned as required by article 5160, R. S. 1925. In due time Dahl entered upon the performance of his contract but, because of financial difficulties, being -unable to complete it within the time limit and according to specifications, on the 29th day of December, 1927, joined with the American Surety Company, his surety, in writing to the district the following letter:

“American Surety Co., of New York
“Houston, Texas, December 29th, 1927. '
“Mr. J. T. Tadlock, Chairman, Board of Ed-
ucation, Dayton, Texas.
“Re: Chas. Dahl Contract.
“Dear Sir: Mr. Finger has asked that we write you concerning the payment of the payrolls on the school job. It will be satisfactory to us as Contractor and surety for you to issue vouchers for the payroll due last Saturday, December 23rd, and for that due this Saturday, December 30th, said payments to be supervised by you to ascertain that the money goes to the laborers so that there will be no possibility of these labor claims not being satisfied. The same arrangement may be carried out each week until further notice.
“Under this arrangement Mr. Dahl agrees to keep all equipment and material necessary on the job and to complete his part of the contract as rapidly as possible.
“Yours very truly,
“[Signed] O. Dahl.
“C. Dahl, Contractor.
“American Surety Co. of N. Y. ’
“By A. W. Penn,
“A. W. Penn, Inspector.”

On the date of this letter the district had in its treasury a balance of the contract price amounting to $19,431.95, ■ The proposition submitted by this letter was accepted by the district and under the direction of Professor A. W. Runyan, superintendent of the public schools of the district, the work under thq contract was carried forward to completion at an additonal cost from the time Professor Runyan took charge of $10,703.55, leaving in the treasury of the district $8,728.30 of the original contract price. The work was completed under the general supervision of Dahl’s foreman and with the crew of hands he had assembled for this purpose. As superintendent on the job, Professor Runyan used all material left upon the job by Dahl while he was superintending the work; also, in completing the work, the tools, machinery, and appliances of Dahl were used as when he was in direct charge. Professor Runyan bought material necessary to prosecute the work to completion and paid the labor bills from the funds in the hands of the district. At the time Professor Runyan, took charge, Mr. Dahl had withdrawn his men from the work. Before Professor Runyan took charge, Dahl’s superintendent, the architect, Professor Runyan, and a representative of the surety company had a conference for the purpose of deciding how the work should be finished. Professor Runyan represented the district was in need of the buildings and the surety company representative told him to proceed with the completion of the work; that the surety company would have to finish it, but that it did not have any organization; that is, was not in the building business and, therefore, did not have the necessary organization to do the work. The surety company asked Professor Run-yan, as representing the district, to proceed with the work and with Mr. Dahl’s force, and to complete the job. In this connection a representative of the surety company told Professor Runyan to prosecute the work to completion, and, if it cost more money than the district had in the treasury, the surety company would be responsible for the difference. At no time during the negotiations for the completion of this work did the surety company in any way deny liability upon the bond but, admitting its liability, counseled with the interested parties for the completion of the work in order that the interests of all parties might be duly protected. Under the supervision of' Professor Runyan, all work contemplated by the contract was completed *496 about April, 192S; and accepted by tbe architect as being in satisfaction of tbe contract, and delivered to and accepted by tbe district as being in accordance with its contract. Tbe district has never suggested in any way that the work contemplated by tbe contract was not duly executed. When tbe building was completed and delivered to tbe district, tbe following materialmen and subcontractors had claims against Dahl for tbe amount herein shown; this statement also reflects tbe necessary data regarding these claims. Tbe statement is as follows:

Name Nature of Agreement and date thereof Amount Furnished before Amount Furnished after Sep. 5, 1927 Sep. 5, 1927
Álamo Iron Works Written Contract, Aug. 29, 1927. $1,937.17 $1,605.71
South Texas Lumber Company Contract, Aug. 1927 6,665.60 2,624.97
J. A. Nolsch Open Account 359.78 201.23
W. L. Macatee & Sons Open Account 232.50 295.36
Mabry Mfg. & Lumber Co. Written Contract of August 3, 1927 None 4,226.79
J. H. Herman Co. Written Contract Sep. ,1, 1927 — See Ev. pp. 46-7
Beaumont Building Material Written Contract None 2,100.00
Cole Brick Co. Open Account None 566.90
Natural Slate Blackboard Co. Oral Contract, Aug. 28, 1927 $702.16
Open Account 227.07 None 929.23
Pittsburgh Plate Glass Co. Open Account None 155.33
A. C. Horn Co. of Texas Open Account None 218.51
R. B. Everett Co. Open Account None 80.00
Peden Iron & Steel Co. I-Ioltkamp Sheet Metal Open Account None 1,178.86
Works Open Account None 175.00
L. Seline Verbal Contract Aug. 1927 —Job completed Latter part of Sep. > or first of Oct. None 97.00
Reliance Brick Co. Open Account None 74.40
Bickley Bros. Open Account None 118.46
Houston Art Stone Co. Open Account None 91.00

Being unable to pay these accounts Dahl was adjudged a bankrupt. Thereupon, the claimants made demand of the surety company to make payment in accordance with the terms of its bond.

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Bluebook (online)
29 S.W.2d 493, 1930 Tex. App. LEXIS 613, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-surety-co-of-new-york-v-alamo-iron-works-texapp-1930.