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considered, and that court answered in the v. United States, 191 U. S. 416, 24 Sup. Ct. affirmative. The question was certified un- 142, 48 L. Ed. 242; People v. Bowen, 187 der the style of Hess & Skinner Engineering | Mich. 257, 153 N. W. 672. Company v. M. M. Turney et al.

It is stated in the note to Hormel v. Bond.' [1] R. E. Hoppe recovered judgment for ing Co., 33 L. R. A. (N. S.) 513, that the overgoods sold to laborers, under the circum- whelming weight of authority' supports the. stances, as local merchants, mentioned in proposition that the rule of strictissimi Juour seventh finding of fact, supra, for the ris, by which the rights of uncompensated amounts due him, with the right of pro rata sureties are determined, is not applicable participation of the funds in the registry of to the contracts of surety companies, which the court. In this there was no error. The make the matter of suretyship a business transaction mentioned in said tinding of for profit." See the numerous authorities citfact amounted to an equitable assignment to ed in this note in support of the proposition. him of the claims of the laborers. McIlhenny Under the assignment stated in the fourth v. Binz, 80 Tex. 20, 13 S. W. 655, 26 Am. St. finding of fact, supra, the bridge company Rep. 705.

had the right to have all of the $16,149.80 ( [2] One of the appellees herein is the due by the county to the contractors paid to bridge company./ At one of the periodical | it. Had it done so the debt of the contracsettlements between the county and the tors to it would have been reduced by the contractors it was found that the county amount of $6,499.80, which it consented to was due the contractors $16,149.80. There have paid to the local merchants. But in were present at this settlement one of the that event the debt of the contractors to a contra ctors, the county judge, an agent of the merchants for that amount would have the bridge company, and a representative of | remained unpaid. and by virtue of their i all of the local merchants. There was then

equitable assignment from the laborers they due the local merchants, under the agree

could have recovered that amount against apment referred to in the seventh finding of fact,

pellant in this suit. The appellant suffered supra, the sum of $6,499.80. The represen

no injury by said transaction, as its liabilitative of the local merchants objected to any

ties were not lessened thereby. It can make of this sum being paid to the contractors.

:f no difference that in this suit it was the It was then agreed by all parties that the

bridge company instead of the local mercounty should issue to the contractors two

chants that recovered against it. 11 warrants, one for the sum of $6,499.80, which

[3] Among the recoveries in this case should be immediately indorsed by the con

| against appellants was one for $1,612.60, in tractors to the representative of the local

favor of the bank, the same being the prinmerchants, and the other for the balance,

cipal and interest of the loan made to the $9,650. This was done, and the warrant for $6.499.80 was collected by the represen

contractors, as stated in our fifth finding of tative of the merchants, and the proceeds

fact. In this we think there was error. was paid to them,

The contractors at the time they borrowed In connection with these facts, appellant

this money represented to the bank that they submits the following proposition:

needed it to pay wages due the laborers. "Where a creditor releases the securities held

This was true, and the money was used for by him for the payment of an obligation for

that purpose. The laborers, however, were which a surety is liable, the release of said se- not parties to this transaction. When they curities operates to discharge and release the were paid, their debts were extinguished. surety, at all events to the extent of the value of

The transaction did not constitute an equita. the securities released.”

ble assignment of their debts, and did not This proposition, under the facts ordina- subrogate the bank to their claims against rily existing in suits against sureties, is too appellant. 1. & G. N. Ry. Co. v. Concrete well established to require citation of au- Investment Co., 201 S. W. 723; Lion Bonding thorities in its support. The bridge com- Co. v. Bank, 194 S. W, 1012; Bank v. Corse, pany, by its agreement and indorsement of 133 Tenn. 720, 182 S. W. 917; Morgan's S. the $6,499.80 warrant to the merchants, res. Co. v. Ry. Co., 137 U. S. 171, 11 Sup. Ct. leased security which it had the right to 61, 34 L. Ed. 625; Malone v. Kaufman, 38 retain by virtue of the assignment to it, as Tex. 455. stated in our fourth finding of fact, supra. [4, 5] There was no error, however, in the

To the above proposition there should be judgment of the court that the amount due added, under the facts of this case, the fol- the bank be paid out of the money in the lowing:

registry of the court. The transaction menWhere, however, a surety is engaged in the tioned in our fifth finding of fact constitutbusiness of suretyship for profit, and it ap- ed an assignment of the funds in the hands pears that he was not injured by such re-of the county to the amount of said indebtedlease, he will not be discharged thereby, in ness. This seems to be conceded by appelwhole or in part. Rule v. Andrews, 160 Mo. lant, but it contends that it had a prior right App. 347, 142 S. W. 358; U, S. Fidelity Co. to such fund, by reason of the previous as

signment made to it, as stated in our third, must be given to the holder of the fund, in finding of fact.

order for it to take precedence over a subse The appellant relies upon the rule,"Qui quent assignment. 2 Pomeroy, Eq. Jur. $ 695. prior est tempore, potior est jure." This rule There is a diversity of opinion on this among is subject to limitations. An able English the courts of the several states in this counequity judge says: “This is an incorrect try. We know of no decision in Texas as statement of the rule, for that proposition is to this point. far from being invariably true.” Rice v. The learned editor of the note to Graham Rice, 2 Drew, 73. Mr. Pomeroy gives the Paper Co. v. Pembroke, 71 Am. St. Rep. p. following as a more correct statement of 34 et seq., after citing cases pro and con, the rule: “As between persons having only says: equitable interests, if their equities are equal, “Under the rule that the date of the assignqui prior est tempore, potior est jure."ment controls, where there is a prior and sub1 Pomeroy, Eq. Jur. § 414. Again, the same sequent assignee of the same cause of action learned author says: "Among successive from the same person, it is evident that no asequitable estates or interests, where there signment can be taken with safety. We are, exists no special claim, advantage, or supe

therefore, induced to believe that the second

rule, which allows the assignee who first gives riority in any one over the others, the or

notice to the debtor to obtain priority, is the der of time controls." 2 Pomeroy, Eq. Jur. 8

better one, not only because of the reasons giv682. "It is certainly not enough that two

en in the principal case, but because it is in successive equitable interests should be of obedience to the general principle of law which precisely the same nature, for even then one requires that all transfers of property must be might be accompanied with some collateral rendered as complete as the nature of the action incident which gave it a precedence over

will permit, in order to make them valid as

against subsequent bona fide purchasers for a the other without reference to their order of valuable consideration without notice. See time. When we say that A. has a better eq- Methven v. Staten Island, etc., Power Co., 66 uity than B., this means that, according to Fed. 113, 13 C. C. A. 362. It is clearly the those principles of right and justice which duty of an assignee, in order to perfect an a court of equity recognizes and acts upon,

assignment, to give notice to the debtor, and

the amount of such a doctrine is that the bare it will prefer A. to B., and will interfere

assignment of a chose in action does not pass to enforce the rights of A. against B.” Id.

it away without notice of the fact to the debtor. 8 683.

If notice of the assignment is not communicated, We think that “the collateral incidents" | it enables the original creditor to commit a existing in the instant case should, “accord- fraud, as he may assign a second time, and ing to the principles of right and justice," such assignee, although he may take the pregive the bank's equitable claim to the funds

caution of inquiring of the debtor, yet he can.

not ascertain from him the fact of a previous in the registry of the court precedence over assignment, as it has never been communicated that of appellant. In addition to the fact to him. Richards v. Griggs, 16 Mo. 416, 57 that the bank had no notice of the assign- Am. Dec. 240; Maybin v. Kirby, 4 Rich Eq. ment to appellant, the effect of which we/ [S. C.] 105; Murdoch v. Finney, 21 Mo. 138." will discuss in the succeeding paragraphs of We concur in these views, and in support this opinion, the appellant did not part with |

of same, in addition to the authorities above anything of value as a consideration for the

referred to, we cite Judson v. Corcoran, 17 assignment to it. Such assignment was made

How. (58 U. S.) 612, 15 L. Ed. 231; Spain v. to secure it against liability on its bond, Hamilton, 1 Wall. (68 U. S.) 604, 17 L. Ed. which had been previously executed. On 619; Bank v. Farwell, 58 Fed. 633, 7 C. C. A. the other hand, the bank parted with $1,500 391; Vanbuskirk V. Ins. Co., 14 Conn. 141, cash for the assignment to it. While the 36 Am. Dec. 473; Bank v. Hewitt, 3 Iowa, bank did not secure an assignment of the 93, 66 Am. Dec: 49; Houser v. Richardson, wages due to laborers, for the payment of 90 Mo. App. 134; Wallston v. Braswell, 54 which appellant was liable on its bond, nev- N. C. (1 Jones, Eq.) 137; Clodfelter v. Cox, 1 ertheless the money obtained from the bank |

Sneed (Tenn.) 330, 60 Am. Dec. 157; Penni. was used to pay such laborers. For the rea- man v. Smith, 5 Lea (Tenn.) 130; Ward v. sons stated, we hold that the bank's assign- | Morrison, 25 Vt. 593. ment was superior in equity to that of ap- [7] Judgment was rendered in favor of pellant,

R. E. Hoppe, among other things, for $183.[6] For another reason we do not think 25, for provisions furnished by him to the that the court erred in adjudging the pay-contractors, and used in running a boardment of the bank's debt out of the funds in ing camp. These were furnished under an the registry of the court: At the time the agreement of Hoppe with the contractors assignment was made to the bank, neither that they would deduct the board of the it nor the county had any notice of the previ- laborers from the amount due them for ous assignment to appellees. As to the ag- wages, and out of same pay him the amount signor, no notice is necessary. As to suc-due for groceries. The amount was so de cessive assignments it is the settled doctrine ducted, though it was not paid to Hoppe by in England that notice of the assignment the contractors. It does not appear that

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the laborers were parties to this contract. we think that is sufficient to bring it withThey agreed that their board bills should be in the protection of the statute. deducted from their wages. Under this in the instant case it was necessary to agreement they were paid partly in cash hoist large steel beams. Had the contracand partly in board. This extinguished the tors employed as many men as Pharaoh is debts to them. It does not appear that the supposed to have used in building the pyralaborers agreed that any part of their wag- mids, perhaps this could have been done with es should be paid to Hoppe for groceries, or their hands. It was none the less "in the in fact that they knew that groceries were prosecution of the work" because it was being bought from Hoppe. Such being the done with a steam engine. The wood used case, there was no equitable assignment of in making the steam was as essential as the laborers' wages to Hoppe, and the court was the muscular strength of those who pererred in rendering judgment for him on this formed manual labor. In order for the en

gine to do the work, it was necessary to [8] We are also of the opinion that the keep it in repair. Food was essential to the court erred in rendering judgment for Hoppe laborers, and it was necessary that it be for $2.50 for a scraper sold by him to the cooked. It facilitated the work to have bridge company, and used by them in con- laborers take their meals in the camp, instructing the bridge; also that it was error stead of going to town for them. We think to render judgment against appellant in the cooking, under the circumstances, was favor of Turney for $12.85 for brushes used labor performed "in the prosecution of the in painting the bridge; also that the court work." We are aware of the fact that there erred in rendering judgment against appel-are decisions in other jurisdictions which lant in favor of E, H. Eggleston for $15.50 hold contrary to the views which we have loaned by him to the contractors to buy expressed. There are also decisions suswood; and for $4.30 advanced by Eggleston taining our views which we think are supto pay express on some bolts.

ported by better reason. See Breault v. The scraper and paint brushes were tools, Archambault, 64 Minn. 420, 67 N. W. 348, and were neither “labor nor material" used 58 Am. St. Rep. 545; Winslow y. Urquhart, in the construction of the bridge.

39 Wis. 260; Heddan v. Walden, 31 N. D. Our reason for holding that appellants 393, 153 N. W. 1015. are not liable for money loaned the contrac The judgment of the trial court will be tors is stated under our discussion of the here reformed in accordance with this opinjudgment in favor of the bank, supra.

ion, and as thus reformed it is affirmed. (9, 10] Appellant complains of the judg- Reformed and affirmed. ment of the court, in that it allowed certain of the appellees for wood furnished in run

On Motion for Rehearing. ning the engine used in hoisting the steel, The appellant, the bonding company, in its for repairs of tools, and for hauling ma- | motion for a rehearing complains that we terial from the railroad to the river.

overruled its first assignment without speWe overrule these assignments, and also cific reference thereto. Said assignment is the assignment as to the judgment in favor as follows: of Mrs. Tomlin for cooking for the camp.' [11] "The court erred in its conclusions of We think these items were material used and law and in rendering judgment for Vincennes labor performed "in the prosecution of the Bridge Company for $6,407.09, because: work provided for in the contract." This (1) The Vincennes Bridge Company and Hess language of the statute requiring bond for & Skinner Engineering Company entered inthe construction of public works is broader to a contract on the 28th day of May, 1914, than that used in the mechanic's lien law, by the terms of which Hess & Skinner Enwhich gives a lien to those "who may labor gineering Company agreed to purchase from or furnish material * * * for the con- Vincennes Bridge Company the steel for the struction of any house," etc. It might well construction of a bridge in road district No. be held the labor here referred to must be 1, Bastrop county, Texas, trusses at $2.40 performed in the actual construction of the and cylinders at $2.10, one-half of which was house, or for material that entered into the to be paid for in cash upon delivery of the structure. It has been so held. But the metal at shop, and the balance in warrants language of the statute here under considera- on Bastrop county, Texas, with 6 per cent. tion gives a lien to those who supply labor interest from dates of shipments; and Vinand material "in the prosecution of the work cennes Bridge Company changed the conprovided for in the contract." This is a tract, and failed to demand or collect the remedial statute enacted for the protection one-half in cash, and shipped out and deof those whose labor or material contributes livered to Hess & Skinner Engineering Comto the “prosecution of the work,” without pany all of said bridge material, and in this reference to whether such labor was on the way changed the terms of the contract, and structure, or whether such material entered relieved the Lion Bonding & Surety Company into the structure. If it directly and ma- from any liability as surety upon Hess & terially aided in the prosecution of the work, | Skinner Engineering Company's bond.”

We did not discuss this assignment be- | by the contractors as the work progressed, cause we thought it showed upon its face, though not before the same was shipped when taken in connection with the undis- from Vincennes, Ind. puted evidence, that it was without merit. There is neither pleading nor evidence The appellant in its original brief cited a to show where the "shop" mentioned in the long list of authorities under this assign- contract was located. ment, none of which, in our opinion, are in In our opinion, the law in reference to point, except the case of American Bond- releasing a surety by reason of a change ing Co. v. United States et al., 233 Fed. 364, in the contract which he had guaranteed 147 C. C. A. 300. The other authorities cit- has no application to a change in the coned announce the proposition that where par tract between the contractor and a subconties enter into a contract, and a third party tractor thereafter made. Such contract, becomes surety for its performance, any where it provides for payments in advance, material change in the contract made by or as the work progresses, is in the nature such contracting parties will release the sure of security to the subcontractor; and, if he ties, without regard to whether such change consents to a change of the contract so as is to the injury of the surety, and without to impair his security, the surety will be reference to whether the surety became such released to the extent that he is injured for accommodation or for hire. This propo- thereby. In such case, in order to release sition is so well settled that it needed no the surety pro tanto, there must be both a citation of authorities to support it. This change in the contract between the contracis so for the reason that the new contract tor and the subcontractor, and resultant inis not the one the performance of which jury to the surety. was guaranteed by the surety.

• It is apparent from the record that there The assignment alleges that the contrac- was a clerical error in entering judgment for tor and the bridge company "changed the the Smithville Gin Company for $62.85, when contract." What contract ? Not the one it should have been for $78.85. The motion entered into between the county and the of said appellee to reform the judgment as contractor, upon which appellant became above indicated is granted, and said judgsurety, but a contract between the contrac-ment is so reformed. tor and the bridge company. Did this! Judgment was entered in the court below change release the appellant? The case of for Mrs. Susie McDaniel for $128.05. Mrs. American Bonding Co. v. United States et McDaniel was not a party to this suit. Such al.. supra, cited by appellant, holds that it judgment should have been in favor of L. did not, unless the appellant was materially W. Pohplatz, and the judgment of the trial injured thereby. We quote from that case as court is here so reformed. follows:

Appellant's motion for a rehearing is over"Companies that make a business of guaranty

ruled. insurance * * are not relieved * * *

Motion overruled. unless the change in the contract] has done them harm." 233 Fed. 369, 147 C. C. A, 305.

In that case the terms of the contract between the contractor and the Marble Com

TITTLE, Acting Comptroller, v. BARTHOLOpany were that the Marble Company was to

MAE et al. (No. 6097.) be paid $75,000, as the work progressed, for the marble furnished by it. The court says: (Court of Civil Appeals of Texas. San Antonio.

Nov. 27, 1918.) "These terms were not observed at all. * * * If the terms of this subcontract had 1. INTOXICATING LIQUORS C 108(10)-PETIbeen observed, the marble company would have l TION TO REINSTATE LICENSE-SUFFICIENCY. been paid 80 per cent. in cash as the work ! A petition to compel the acting comptrolwent on, and, even if the retained 20 per cent. ' ler of Texas to reinstate a retail liquor license had not been paid at the end, the loss of the held, as against general demurrer. to suffisurety company would have been no larger than

ciently allege the license was rescinded and vathis percentage. In fact, however, it is con

cated. fronted now with a judgment (in favor of the marble company) for $20,000, and with a con- | 2. PLEADING 34(3)-CONSTRUCTION-GENtingent liability, which may or may not be- ERAL DEMURRER. come an actual liability, of more than $30,000 When assailed by a general demurrer, every in addition.”

reasonable intendment should be read into the

petition. The change complained of in the instant case was that the bridge company shipped

1 3. PLEADING OM 103(2)-DEFECT IN PETITION

-CURE BY ANSWER. the material without collecting one-half of the value of the same before making ship

Though a petition to compel the acting

comptroller of Texas to reinstate a retail liquor ments. This worked no injury to appellants.

license failed to allege the license had been Much more than one-half of the value of such rescinded and vacated, the defect is cured, where shipments was paid to the bridge company that fact was set out by the answer.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

Appeal from District Court, Bexar Coun- quired to be done when assailed by a general ty; W. S. Anderson, Judge.

demurrer, it is clear that the pleader intended

to state that the license was rescinded and Suit by W. G. Bartholomae and another

vacated. This is borne out by the prayer against L. W. Tittle, Acting Comptroller of

for å reinstatement of the license. Texas. From a judgment for plaintiffs, de

[3] Had the petition been subject, on its fendant appeals. Affirmed.

face, to a general demurrer, appellant cured B. F. Looney and W. J. Townsend, both of | its defects by fully admitting that he had Austin, for appellant.

vacated, rescinded, and annulled the liquor C. J. Gray and Don A. Bliss, both of San license, giving his reasons therefor. That Antonio, for appellees.

the allegations in an answer may be consid

ered in connection with those of the petition, FLY, C J. This is a suit against the

in order to sustain the latter, when attacked

by demurrer, is well established in Texas. comptroller of public accounts of Texas, in

Peoples V. Brockman, 153 S. W. 907, and stituted by appellees, to have a liquor license

authorities therein collated; Hotel Dieu v. reinstated which it was alleged appellant

Armendariz, 167 S. W. 181; Hranicky v. "undertook unlawfully and illegally to re

Sell, 199 S. W. 315. The first case cited was scind, vacate, and withdraw." Judgment was rendered reinstating the license.

decided by this court, through Associate Jus[1, 2] The only question presented in this

tice Moursund, and a writ of error was de

nied by the Supreme Court. court is as to the action of the trial court in overruling a general demurrer to the pe

The judgment is affirmed. tition. The petition, omitting caption and signatures, is as follows:

"Your petitioners, W. G. Bartholomae and J. E. Helmer, respectfully show to the court that heretofore on, to wit, the day of

PELIPCHYK V. BORDEN. (No. 7642.) 1917, the proper authorities of the state of Texas and of the county of Bexar, and the city (Court of Civil Appeals of Texas. Galveston, of San Antonio, in said county and state, is

Dec. 2, 1918.) sued and delivered to your petitioners retail liquor dealers' licenses, authorizing your pe- 1. MASTER AND SERVANT 258(19)-INJUtitioners to conduct a retail liquor dealer's RIES TO SERVANT-PETITION-SUFFICIENCY. business in the said city of San Antonio, on Apetition alleging that plaintiff, while a Commerce street, in the said county of Bexar, minor, 17 years old, was employed by defendant, and petitioners proceeded to open said business that he was required to perform services in a and to conduct the same on said street.

cotton gin owned by defendant, that the machin“Thereafter, on, to wit, the 8th day or the ery was negligently left exposed, that plaintiff 9th day of February, 1918, the comptroller of was ignorant of the danger, that he was not the state of Texas, or rather the acting comp- warned, and that as a result he sustained introller of the state of Texas, one L. W. Tittle, juries, held, as against general demurrer, sufundertook to rescind, vacate, and withdraw said ficient to state a cause of action. license unlawfully and illegally. “Your petitioners show to the court that li- |

2. PLEADING 34(3) - DEMURRER – GENcenses authorized and empowered your peti-| ERAL DEMURRER. tioners to conduct said business and to sell at When a general demurrer is addressed to a retail spirituous, vinous, and malt liquors in pleading, it is the duty of the court to extend quantities less than a quart from said date for every reasonable intendment in its favor. the period of one year. The said licenses were then and there of the value of, to wit, $1,200. | Appeal from District Court, Wharton

"But the said acting comptroller of the state County; Samuel J. Styles, Judge. of Texas undertook unlawfully and illegally to rescind, vacate, and withdraw said licenses, and Action by Konstantin Pelipchyk against to prevent your petitioners from conducting A. P. Borden. From a judgment for defendsaid business on or about the date hereinbefore ant, after the sustaining of a general demurmentioned.

rer, plaintiff appeals. Reversed and remand"Premises considered, petitioners sue, and

ed. pray that the comptroller of public accounts for the state of Texas be cited to answer this peti

P. Harvey, of Houston, for appellant. tion, and that, upon final hearing, your petitioners have judgment reinstating said licenses, for costs, and for general relief."

LANE, J. This suit was brought by plainIt is contended that the petition is subject tiff in error against defendant in error to to general demurrer, because it does not al. recover for personal injuries suffered by him, lege that the comptroller "did vacate, annul, which he alleged were caused by the negliand rescind such license," but merely that he gence of defendant in error. undertook to do so. Reading every reason- In his petition plaintiff in error makes the able intendment into the petition, as is re- following allegations and prayer:

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes 207 S.W.-12

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