Employers' Casualty Co. v. Rockwall County

300 S.W. 148, 1927 Tex. App. LEXIS 1108
CourtCourt of Appeals of Texas
DecidedJuly 2, 1927
DocketNo. 9915.
StatusPublished
Cited by14 cases

This text of 300 S.W. 148 (Employers' Casualty Co. v. Rockwall County) 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
Employers' Casualty Co. v. Rockwall County, 300 S.W. 148, 1927 Tex. App. LEXIS 1108 (Tex. Ct. App. 1927).

Opinion

VAUGHAN, J.

Employers’ Casualty Company, a private corporation organized under the laws of the state of Texas, instituted its *150 suit on the 10th day of September, A. D. 1925, against J. H. Patterson, D. S. Kirk, J. G. Braddock, and the county of Rockwall, state of Texas, a municipal corporation, as defendants, the cause of action being based upon the following facts:

On September 11, 1924, said Kirk & Patterson, as a copartnership, for a valuable consideration, contracted with said county, to build and construct for said county nine miles of concrete road eight feet wide; said contractors, as principals, furnished to said county a bond to secure the faithful performance of said contract in the sum of $35,000, executed by them with the Employers’ Casualty Company as surety; said contractors later associated one J. G. Braddock with them in said contract; the constructing of said road proceeded until about the 13th day of February, 1925, at which time said contractors defaulted and were unable to further proceed with said contract for the lack of funds. The Employers’ Casualty Company was advised of this situation, discussed it with the county authorities, and, under its liability as surety on said bond, entered into contract with said contractors whereby it, as surety, was to complete the work under said contract for said county and have control of the money then due as well as money that might thereafter become due under said contract; that at the time of the execution of said bond, as a part of-the consideration for the Employers’ Casualty Company becoming surety thereon, it demanded and received from said contractors an equitable assignment and an indemnity agreement, the pertinent parts of which were as follows: The contractors agreed to indemnify the surety against all loss, costs, damage, charges, and expenses that it might incur by reason of said suretyship; said contractors further as of July 25, 1924, before work was begun under said contract, made an equitable assignment to the surety of “all of the deferred payments and retained percentages and any and all moneys and properties that may be due and payable to them at the time of any breach or default in the contract or cessation of work thereunder or that may thereafter at any time become due and payable to them on account of said contract, or on account of any extra work performed or materials furnished in connection therewith,” said assignment contained the further provision that the contractors “do further agree that all such moneys and the proceeds of all such payments or properties shall be the sole property of said company (the surety), for its sole use and benefit, to be by it credited upon any loan or advances made on account of said contract or upon any cost or expense or advancement of any nature whatsoever .that the company may or might in its judgment make or become liable for.” In completing the contract from the date of the default by contractors, February 13, 1925, the Employers’ Casualty Company, as surety, expended the sum of $31,106.41. In addition to this, said contractors owed to said surety, for other items, the sum of $2,079.62. From February 13, 1925, until the contract was performed and work thereunder accepted, said surety received as proceeds therefrom the sum of $26,020.93. At the time of the completion and acceptance of said road there remained in the hands of Rockwall county, as part of the retained percentage due on said contract, $3,861.85, which sum the said surety demanded from the county in writing on June 15, 1925, which demand the commissioners’ court of said county refused. That appellant casualty company sued Kirk, Patterson, and Braddock for the sum of $6,175.-20, the aggregate amount of the two sums alleged to be due by them to said appellant, and for judgment against Rockwall county for the sum of $3,861.85, the retained percentage due on said contract, and that the commissioners’ court of said county be ordered and directed to approve and direct payment of same to appellant casualty company. On July 15, 1925, the Farmers’ National Bank of Rockwall instituted its suit against said J. H. Patterson and D. S. Kirk, composing the firm of Kirk & Patterson, and the county of Rockwall, to recover against said Kirk & Patterson the several sums of money due it on account of two notes executed by them, payable to said bank, each for the sum of $2,000 and each providing for the payment of interest at 10 per cent, per annum from date until paid, and for attorneys’ fees, one of said notes being dated December 11, 1924, and due January 15,1925, and the other dated December 20, 1924, and payable on demand, the last-mentioned note being entitled to a credit of $700 paid on April 2, 1925. That to secure said bank in'the payment of said notes, said Kirk & Patterson, on December 11, 1924, executed the following assignment in favor of said bank, addressed to the commissioners’ court of Rockwall county, viz.:

“This will be your authority and you are hereby ordered to make your January estimate check payable to the Farmers’ National Bank of Rockwall, Tex., for the amount then due or allowed Kirk & Patterson on the Rockwall-Heath road contract. This is also an order to the said bank against any retainage that might be coming to the said Kirk & Patterson on said note.”

Said assignment Was, on or about January 1, 1925, lodged with the .commissioners’ court of Rockwall county, said bank claiming that Rockwall county owed a balance to said Kirk & Patterson accruing to them for the construction of said road which was in excess of $10,000, and that title to said sum was in said bank by virtue of said assignment to the extent of the indebtedness of said Kirk •& *151 Patterson to said bank, and prayed for judgment-against the defendants Kirk & Patterson, and each of them, for the amount of balance due on the notes sued upon.

On May 23, 1925, the McDonald Hardware Company, a corporation, as plaintiff, filed its original petition, which was amended June 7, 1926, complaining of Kirk & Patterson, a copartnership composed of D. S. Kirk, J. H. Patterson, and J. G. Braddock, and Employers’ Casualty Company, as defendants, on an itemized account amounting to $1,195.09, for wares, goods, and merchandise sold and delivered by said plaintiff to said Kirk & Patterson. Said amended petition alleged the execution of said road contract between Rockwall county and Kirk & Patterson, the execution of the bond of indemnity, by said Kirk & Patterson with said Employers’ Casualty Company as surety, the default in the performance of said contract by Kirk & Patterson, the taking over of the contract and completion of said road by said Employers’ Casualty Company as per contract; that the goods, wares, and merchandise, being all of the items comprising said account, were materials incident to and used by Kirk & Patterson in the performance of said contract; that said Employers’ Casualty Company did take and convert to its own use and benefit all of said materials, goods, wares, and merchandise, sold by said plaintiff to defendants Kirk & Patterson, and sought to recover against the defendants in its suit under and by virtue of the terms of said indemnity bond the amount due on said account. All of said work was done and complete performance of said contract made and final settlement therefor had on the 13th day of July, 1925.

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Bluebook (online)
300 S.W. 148, 1927 Tex. App. LEXIS 1108, Counsel Stack Legal Research, https://law.counselstack.com/opinion/employers-casualty-co-v-rockwall-county-texapp-1927.