American Surety Co. v. Shaw

• Decision Date: 14 March 1934
• Docket Number: No. 1416-6244.,1416-6244.
• Citation: 69 S.W.2d 47
• Parties: AMERICAN SURETY CO. OF NEW YORK et al. v. SHAW et al.
• Court: Texas Supreme Court

69 S.W.2d 47

AMERICAN SURETY CO. OF NEW YORK et al. v. SHAW et al.

No. 1416-6244.

Commission of Appeals of Texas, Section B.

March 14, 1934.

Error to Court of Civil Appeals of Fifth Supreme Judicial District.

Action by C. L. Shaw and others against the American Surety Company of New York and others, in which Blue & Pittman and another intervened, and in which the Watson Company filed a cross-bill against defendant Terminal Building Corporation. To review a judgment of the Court of Civil Appeals [47 S.W.(2d) 474], reversing and rendering in part and reforming and affirming in part a judgment of the district court, all parties except the Terminal Building Corporation bring error.

Judgments of the district court and Court of Civil Appeals reversed, and cause remanded for new trial.

Murphy W. Townsend and R. G. Scurry, both of Dallas, for plaintiffs in error.

W. H. Flippen, of Dallas, John T. Gano, of Houston, Callaway & Reed, Frank A. Loftus, W. C. Scurry, Coke & Coke, and B. O. Baker, all of Dallas, and Lee, Lomax & Wren, of Fort Worth, for defendant in error.

RYAN, Judge.

The record in this case is very voluminous, and in the interest of as much brevity as possible in this opinion, we refer to the statement by the Court of Civil Appeals. 47 S. W.(2d) 474.

From such statement, as well as the record, which we have carefully examined, we gather:

1. The Terminal Building Corporation of Dallas, as owner, on or about August 25, 1923, contracted with Watson Company for the construction of a building in the city of Dallas, known as the Santa Fé Building.

The American Surety Company was surety on the bond of Watson Company to the Terminal Building Corporation, assuring performance of the contract.

2. Watson Company sublet the brick, cement, stone, concrete, and masonry work to C. L. Shaw, the plastering to George W. Blue and H. G. Pittman (Blue & Pittman), and contracted with Lyle Clapper and Leland Clapper (Standard Concrete Tank Company) to provide and erect in place, and remove, after being used, all necessary forms for the concrete work.

3. After due time the building was completed, according to plans and specifications, on December 14, 1925, and no questions are here presented as to the quality of the work done under the contract.

4. After the building was completed, controversies arose as to amounts under their contracts and for extra services, due to the various contracting parties, payment for which was delayed, and this suit involves only the amounts due for interest, as damages, on said amounts due, during the period of such delay, extending more than two years, which delay was charged to dilatoriness, unfulfilled promises, and wanton disregard of the contractors' rights on the part of the owner and Watson Company.

5. Alleging full performance of their respective subcontracts, Shaw as plaintiff and Blue & Pittman and Standard Concrete Tank Company as interveners, sued Watson Company as general contractor, its surety, the American Surety Company of New York, and the Terminal Building Company, owner, to recover interest that accrued on the principal sums due them during the time payments were delayed.

6. The position of Shaw is that such wanton delay in making prompt settlement, thus depriving him of the use of his money, constituted a tort; the measure of damages therefor being interest for the period of time during which he was denied such use. He alleged also that he finished his work on December 14, 1925, which was accepted by the architect on December 15, 1925, wherefore the amounts stipulated then became due, and that on January 5, 1927, the owner fully accepted his work under the contract and for extras, wherefore such amounts then became due and he was entitled to legal interest thereafter.

7. Blue & Pittman's allegations are similar to those of Shaw; their work was completed on November 24, 1925; interest was claimed on amounts due for extra work and material from that date, and on work and material furnished under their contract, from sixty days after such completion. They alleged, in addition, broken promises and dilatory tactics on the part of the owner and of Watson Company, also a conspiracy between them and the architect of the building, who it was stated was a stockholder and pecuniarily interested in its ownership and in the payment of material and labor bills thereon, as a result of which, acceptance of their work and payments therefor were delayed until February 7, 1927, but no payment was made thereon until August 2, 1927, and then only partial.

8. The Standard Concrete Tank Company's allegations, likewise, are similar to those of Shaw and Blue & Pittman. Interest is claimed from sixty days after completion of their work on November 30, 1926. It was charged that not until February 19, 1927, did the owner ratify acceptance of the work and payment therefor was delayed until April 19, 1928.

9. Watson Company's defense was that during the periods of delay, the supervising architect had failed to accept the work of the respective subcontractors, and the owner of the building had not indicated what amounts of money it was willing to allow for and on account of their work, and therefore the delay in payments to said subcontractors was the fault of the owner and recovery, if any, should be had only against said owner. In the alternative, Watson Company prayed judgment over against the owner for any such recovery as might be had against it (Watson Company).

10. The Surety Company adopted the answer of Watson Company and all demurrers, denials, exceptions, pleas and averments contained in said answer.

11. Terminal Building Corporation, owner, answered that while it had entered into contract with Watson Company for the construction work in question, it did not enter into any contractual relations whatsoever with plaintiff or interveners, and denied any conspiracy existed between it and the architect, as the result of which, payments to be made by it were delayed.

12. The trial court submitted special issues to the jury which resulted in findings:

(a) There were delays in payment to Shaw, Blue & Pittman, and to Standard Concrete Tank Company of the respective amounts of money due them; such delays were caused by the acts or omissions of both Watson Company and the Terminal Building Corporation; that such delays resulted "in interest on said amounts, as damages," to said parties (plaintiff and interveners).

(b) That each of said parties should receive interest on the respective amounts due, as damages, from February 12, 1926; that said parties should have been paid such interest, as damages, from sixty days after the completion of the job undertaken by each respectively, and the work of C. L. Shaw was accepted in writing by the architect, on December 14, 1925.

Special issues submitted at the request of Watson Company were answered by the jury:

(c) That the delay in making payments by Watson Company to Shaw, Blue & Pittman, and Standard Concrete Tank Company, was occasioned by the acts or omissions of the Terminal Building Corporation.

13. The trial court, thereupon, on March 8, 1930, rendered judgment in favor of C. L. Shaw against the defendants Watson Company, the Terminal Building Corporation, and the American Surety Company, jointly and severally, in the sum of $8,669.46, a like judgment in favor of Blue & Pittman, in the sum of $3,185.98, and in favor of the partnership firm, Standard Concrete Tank Company, in the sum of $1,197.39. The court also rendered judgment over against the Terminal Building Corporation in favor of Watson Company and the American Surety Company, for the amounts recovered against them by plaintiff and interveners below, and for such part thereof as they may be compelled to pay by reason of such recoveries. The Terminal Building Corporation was cast for all costs of suit.

14. The Honorable Court of Civil Appeals was of opinion that no liability attached to the Terminal Building Corporation, that the case below was tried on a wrong theory, resulting in excessive judgments against Watson Company and the surety, that the jury should have been instructed to find for plaintiff and interveners against Watson Company and the surety, interest on the amounts due each, respectively, only from the dates and as fixed by certain agreements reached in January and February, 1927, and accordingly reversed and rendered in part, and reformed and affirmed in part, the judgment of the trial court.

As so rendered, recovery was denied against the Terminal Building Corporation and allowed against Watson Company and the American Surety Company, surety, in favor of C. L. Shaw in the sum of $4,575.03, in favor of Blue & Pittman in the sum of $1,560.65, and in favor of the Standard Concrete Tank Company in the sum of $697.90.

All parties, except the Terminal Building Corporation, applied for and were granted writs of error.

Opinion.

The case was tried in the court below upon the theory that plaintiffs' causes of action are based upon tort and plaintiffs recovered judgment on such theory.

The Court of Civil Appeals determined the case on the theory that the relations of the parties were purely contractual and their causes of action arose from alleged breaches of contract.

The rule is well settled that a case on appeal must be decided upon the same theory as that on which it was tried in the court below. Wolff v. M., K. & T. Ry. Co. (Tex. Com. App.) 289 S. W. 1000; Askey v. Power (Tex. Com. App.) 36 S.W.(2d) 446; Kistler v. Latham (Tex. Com. App.) 255 S. W. 983; Brigman v. Holt & Bowers (...