Gaynor Const. Co. v. Board of Trustees

233 S.W.2d 472, 1950 Tex. App. LEXIS 1635
CourtCourt of Appeals of Texas
DecidedJune 28, 1950
Docket4741
StatusPublished
Cited by9 cases

This text of 233 S.W.2d 472 (Gaynor Const. Co. v. Board of Trustees) 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
Gaynor Const. Co. v. Board of Trustees, 233 S.W.2d 472, 1950 Tex. App. LEXIS 1635 (Tex. Ct. App. 1950).

Opinion

McGILL, Justice.

This is an appeal from a judgment of the District Court of Ector County, 70th Judicial District.

The Board of Trustees, Ector County Independent School District (the Board) sued Gaynor Construction Company, Inc., (Gaynor) as principal and Aetna Casualty & Surety Company (Aetna) as surety for the amount of a proposal bond submitted by Gaynor with its bid for the construction of a Junior High School building for the Ector County Independent School District which Gaynor submitted to the Board and which was accepted by the Board. Trial to the court resulted in a judgment in favor of the Board against Gaynor and Aetna for $35,115, the full amount of the bond, with interest from July 16, 1949 at the rate of six per cent, per annum. The judgment provides that execution shall first be levied against the property of Gaynor, and that if Aetna should be compelled to pay any part of the judgment, the judgment should not be discharged but should be considered as assigned to Aetna to the extent of such payment. Gaynor and Aetna have appealed.

A summary of the material findings of fact and conclusions of law filed by the trial court is deemed essential to an understanding of the points involved:

The Board delivered to Gaynor its authorized plans and specifications for a Junior High School building to be constructed for the Ector County Independent School District in Odessa, Texas. The specifications included a notice to bidders containing the following provisions:

“Sealed proposals will be received by Virgel A. Davis, Architect and Board of Trustees, Ector County Independent School District, Owner, in the Junior High School Library, 308 West 9th Street, Odessa, Texas, not later than 2:00 P.M. Saturday, June 18, 1949, for the construction of A Junior High School Building, Odessa, Texas.
* * * * * *
“Proposals may not be withdrawn for a period of thirty (30) days from and after *474 the opening of bids. Each proposal, to be eligible for consideration, must be accompanied by a certified check or Bidder’s Bond, in the amount of five per cent (5%) of the total amount of the respective proposal to insure the Owners against loss occasioned by the bidder’s failure to execute a Contract, if awarded, or to furnish satisfactory Contract Surety.
* * * * * *
“The right is reserved, as the interests of the Owner may require, to accept any or reject all proposals, or to overlook any irregularities or informalities in any proposals received.
******
"Cashier’s Check or Proposal Bond: A cashier’s check or an acceptable proposal bond, payable without recourse to the order of the Board of Trustees, Ector County Independent School District, Odessa, Texas, in an amount not less than five per cent (5%) of the amount of the bid, must accompany each bid as guarantee that, if awarded the contract, the bidder will promptly enter into a contract and execute a bond on the form provided.
“The cashier’s check or bid bond submitted with each bid shall be considered as the amount of the liquidated damages which the Owner will sustain by the failure, neglect or refusal of the bidder to execute and deliver the agreement and bond should the contract be awarded -him.
“If the bidder defaults in executing the agreement within ten days after written notification from the Architect of the award of the contract to him, the cashier’s check or proposal bond shall become the property of the Owner.
“If the proposal is not accepted within 10 days after the time set out for the submission of the bids, or if the successful bidder executes and delivers agreement and bond, the cashier’s check or proposal bond shall be returned.
* # * * * *
“Bond: The successful bidder shall furnish bond covering the faithful performance of the contract and the payment of all obligations arising thereunder. Bond shall cover one hundred per cent (100%) of the contract sum and shall be submitted to the Architect for approval.”

The Board caused notice containing these provisions to be published in local newspapers and trade journals (the uncontro-verted evidence shows that the notice was published in the Odessa American on the 2nd and 3rd days of June, 1949, and in the Texas Contractor on May 31 and June 7, 1949.) Gaynor submitted a bid in the amount of $701,000 accompanied by its bond in the amount of 5% of the bid with Aetna as Surety. The bond is as follows:

“Proposal Bond.
“Know All Men by These Presents:
“That we, Gaynor Construction Company, Dallas, Texas, as the Principal (hereinafter called the Principal), and The Aet-na Casualty and Surety Company, of Hartford, Connecticut, a corporation of the State of Connecticut, as Surety (hereinafter called the Surety), are held and firmly bound unto Ector Comity Independent School District (hereinafter called the Ob-ligee) in the penal sum of 5% of the Maximum amount Bid- (5%) Dollars, for the payment of which, well and truly to be made, we bind ourselves, our heirs, administrators, executors, successors and assigns, jointly and severally, firmly by these presents,
“Sealed With Our Seals this 6th day of June 1949.
“Whereas, Said Principal is submitting herewith a bid or proposal, for General Construction of a Junior High School Building at Odessa, Texas.
“Now Therefore, the condition of this obligation is such That if said Principal shall be awarded the contract which said Principal has proposed to undertake, briefly described above, and shall, within the time allowed after notice of such award, enter into contract pursuant to such award and give bond for the faithful performance of the contract, then this obligation shall be null and void; otherwise it shall be and remain in full force and effect.
“Provided, However, That this bond is issued subject to the following condition:
“That Surety shall in no event be liable for a greater amount 'hereunder than the *475 difference between the amount of the Principal’s bid or proposal, and the lowest amount in excess of said bid, or proposal, for which said Obligee may be able to award said contract within a reasonable time.
“Gaynor Construction Company
“By:
“The Aetna Casualty and Surety Company
“By: S/ W. B. Gracey,
Resident Vice-President.
(Corporate Seal)”

Aetna delivered the bond to Gaynor in the condition shown with the intention that it should be delivered by Gaynor to plaintiff together with Gaynor’s proposal and in conjunction therewith, to be effective upon such delivery.

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Bluebook (online)
233 S.W.2d 472, 1950 Tex. App. LEXIS 1635, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gaynor-const-co-v-board-of-trustees-texapp-1950.