Southern Surety Co. v. Lafferty

43 S.W.2d 460
CourtCourt of Appeals of Texas
DecidedNovember 12, 1931
DocketNo. 2043
StatusPublished
Cited by3 cases

This text of 43 S.W.2d 460 (Southern Surety Co. v. Lafferty) 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
Southern Surety Co. v. Lafferty, 43 S.W.2d 460 (Tex. Ct. App. 1931).

Opinion

WALKER, J.

On the 26th day of May, 1926, R. E. King entered into a written contract with Nacog-doches county, valid in law, under authority of Commissioners’ Court of Madison County v. Wallace, 118 Tex. 279, 15 S.W.(2d) 535, Cherokee County v. Odom, 118 Tex. 288, 15 S. W.(2d) 538, to install for Nacogdoches county a “block book system”; that is, an abstract of property assessed for taxes and also of property unrendered and .where the owners are unknown, and maps and plats of said property. For this work Nacogdoches county was to pay King $35,000 in warrants of $500 each, to be issued to him as follows: Four warrants on the signing of the contract and [462]*462six warrants each month thereafter during the progress of the work until all but eighteen of the warrants stipulated for were issued. These eighteen warrants were to be issued to King when his work was completed and ac-' cepted by Nacogdoches county. To secure the faithful performance of this contract, King executed to the county two bonds in the aggregate sum of $35,000, with Southern Surety Company as surety.' To save and protect the surety company from liability upon these bonds, King executed to it a bond of indemnity with Dr. T. L. Hurst, Tol Smith, and T. H. Dillon as sureties. King entered upon his contract and prosecuted it with due diligence for about one year, when, having received from the county all the warrants he was entitled to prior to its completion, he abandoned the contract and refused to proceed further with its execution. Each of the warrants delivered to King recited upon its face the date of its issuance and maturity, and that it was issued “for value received”; and: “And, it is hereby certified and recited, that all acts, con? ditions and things required to be done precedent to and in the issuance of this warrant have been properly done, have happened and been performed in regular and due time, form and manner, as required by law, and that the total indebtedness of said County, including this warrant and all others of this series, does not exceed any constitutional or statutory limitations.”

The warrants also made reference to the contract under which they were issued and as recorded in the minutes of the commissioners’ court. Immediately after these warrants were issued and delivered to King, he sold and transferred them to appellees J. Edgar Lafferty and W. S. Swilley in the following amounts, quoting from appellees’ brief: “On August 14, 1926, September 11, 1926, September 21, 1926, October 15, 1926, November 13, 1926, and December 18, 1926, respectively, ap-pellees bought the warrants involved in this suit from I-I. C. Burt & Co., and Dunn & Carr, brokers, aggregating a total of twenty-four thousand five hundred dollars ($24,500.00) for both, paying therefor 98 and accrued interest, except three thousand dollars ($3,000.00) bought on December 18th, for which 97 and accrued interest was paid.”

After King defaulted on his contract, the county refused to pay these warrants. Thereupon appellees instituted this suit in the district court of Nacogdoches county to recover the amount due thereon according to their face, tenor, effect, and reading — that is, the principal amount, with interest and attorney’s fees — and for mandamus against Nacogdoch-es county ordering it to provide for the payment of the warrants as per the terms of the contract. Nacogdoches county answered by plea of failure of consideration, and implead-ed its surety, asking for judgment against its surety only in the event it was held liable upon the warrants. The surety company thereupon impleaded its sureties. Upon trial to the court without a jury, judgment was ren.dered in favor of appellees for $23,000 of their warrants, but without interest and attorney’s fees, though the warrants stipulated therefor, and for mandamus, as prayed for. The county was given judgment over against the surety company for $11,000, and the surety company was awarded a like judgment against its surety, Dr. T. L. Hurst. The pleas of privilege filed by its other sureties, Tol Smith and T. H. Dillon, were sustained by the trial court. King was also made a party defendant, and judgment was likewise given against him in favor of the county and the different sureties. In our discussion of the case, J. Edgar Laf-ferty and W. S. Swilley will be referred to as appellees, Nacogdoches county as the county, and Southern Surety Company as surety company.

Conceding that the warrants sued on herein were nonnegotiable instruments, appellees brought their suit upon the theory that, having recited in the warrants that they were issued for value received and that all things required by the contract necessary to their issuance had been performed, the county was estopped to deny the truthfulness of these recitations and to plead failure of consideration as a defense against the warrants. Though appellees pleaded estoppel against the right of the county to deny the truthfulness of the warrant recitations, in view of the following concession made by the county and the surety company in their briefs, we think this issue of estoppel-goes out of the case: “At the inception of our discussion hereunder, let us review, briefly, some of the" facts that have been disclosed in the preceding statements. It will be recalled that while King, the contractor, abandoned his contract, this abandonment came after he had worked for over a year thereunder. He had done a large amount of work in compiling sketches and data necessary for the relatively quick process of transcribing the material thus accumulated into permanent record form. As each installment 'of warrants was issued to him, and at the time of the passage of each of the orders here in question, King came before the Commissioners’ Court and made a showing of the work which he had done. Was this work which King had done of value to the county? Doubtless before this the Court will have perceived that such work was of value to the county, provided King carried on the work to completion and placed it in useable form. The contractor had expended a large amount of effort for the benefit of the County, which was of present potential value to the County. How, then, did the complete failure of consideration for the warrants come about? The question is already answered in the foregoing [463]*463statement hereunder. After doing more than a year’s work under his contract, King quit the job, before its completion, and carried away with him practically everything that he had done up to that time. And so it appears that while, as a matter of fact, the County had received value for the warrants at the timé of the passage of the various orders in question, yet the value of that which it had received was destroyed by an act of the con-, tractor which occurred at a time subsequent to the pasasge of all of the court orders here in question.”

This follows because appellants, the county and the surety company, concede as facts all the recitations contained in ' the warrants which appellees seek to establish by estoppel; that is, they concede as a fact that “the County had received value for the warrants at the time of the passage of the various orders in question.”

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Nacogdoches County v. Lafferty
61 S.W.2d 994 (Texas Commission of Appeals, 1933)
Hidalgo County Drainage Dist. No. 1 v. Magnolia Petroleum Co.
47 S.W.2d 875 (Court of Appeals of Texas, 1932)
Runnels Chevrolet Co. v. Clifton
46 S.W.2d 426 (Court of Appeals of Texas, 1932)

Cite This Page — Counsel Stack

Bluebook (online)
43 S.W.2d 460, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southern-surety-co-v-lafferty-texapp-1931.