Big Three Welding Equipment Co. v. Crutcher, Rolfs, Cummings, Inc., A-2499

• Decision Date: 03 May 1950
• Docket Number: A-2499
• Citation: 149 Tex. 204,229 S.W.2d 600
• Parties: BIG THREE WELDING EQUIPMENT CO., Inc., v. CRUTCHER, ROLFS, CUMMINGS, Inc., et al. .no.
• Court: Texas Supreme Court

Page 600

229 S.W.2d 600

149 Tex. 204

BIG THREE WELDING EQUIPMENT CO., Inc., v. CRUTCHER, ROLFS, CUMMINGS, Inc., et al.

.no. A-2499.

Supreme Court of Texas.

May 3, 1950.

Rehearing Denied May 31, 1950.

Harry W. Freeman, Houston, for Big Three Welding Equipment co., inc.

Andrews, Kurth, Campbell & Bradley, Homer Mabry, Bates, Cartwright & Bates, and Reagan Cartwright, Houston, for Crutcher, Rolfs, Cummings, Inc., and others.

Brian S. Odem, U. S. Atty., W. R. Eckhardt, III, Asst. U. S. Atty., Houston, for the United States.

Rex G. Baker, Moody Pearson, Nelson Jones and Frank L. Heard, Jr., Houston, for Humble Pipe Line Co.

SMEDLEY, Justice.

The controversies herein are as to priorities of liens and consequently as to priorities of payment out of a fund deposited with the clerk of the district court by Humble Pipe Line Company as stakeholder. On trial without a jury the district court adjudged that the petitioner, Big Three Welding Equipment Company, Inc., which perfected a garnishment lien, is entitled to priority over all other parties to the suit; that the United States of America, having perfected a lien for taxes is entitled to priority of payment over all other parties except Big Three Welding Equipment Company, Inc.; and that the other parties have no liens and no priorities in the fund and are entitled to share pro rata in the balance after payment to Big Three Welding Equipment Company, Inc., and the United States of America of the amounts adjudged to them.

On appeal by Crutcher, Rolfs, Cummings, Inc., Kane Trucking Company and the United States of America, the Court of Civil Appeals reversed the trial court's judgment and remanded the cause, after holding that priorities of payment exist and payment shall be made in this order: First to United States of America the full amount of its debt; second, to Crutcher, Rolfs, Cummings, Inc. and Kane Trucking Company their debts, they to share pro rata in the sum remaining after payment to the United States; third, to Big Three Welding Equipment Company, Inc., the full amount of its debt out of what remains, if anything; and finally to the unsecured creditors the payment of their claims pro rata out of any balance remaining. Tex.Civ.App., 224 S.W.2d 884.

The case began as an action for debt by Big Three Welding Equipment Company, Inc., against Ladewig Engineering Company; and writ of garnishment was issued and served on Humble Pipe Line Company, which answered that it was indebted to Ladewig Engineering Company for work done and services rendered as an independent contractor in the sum of $21,880.39. Under order of the district court, this sum was paid to the clerk of the court to be held until the determination of the rightful owners thereof, and claimants of liens and other creditors of Ladewig Engineering Company were impleaded. The United States of America became a party by intervention, asserting a prior right of payment by reason of unpaid taxes owed to it by Ladewig Engineering Company. Crutcher, Rolfs, Cummings, Inc., and Kane Trucking Company are claiming prior liens and prior rights of payment under Articles 5473 and 5474 of the Revised Civil Statutes of 1925 as amended by Chapter 223, Acts Regular Session, 41st Legislature, Vernon's Ann.Civ.St. arts. 5473, 5474. The lien claimed by the first of these two companies is for selling and delivering to Ladewig Engineering Company equipment, materials and supplies used by that company in the performance of its contract with Humble Pipe Line Company for 'digging, removing, dismantling, operating, maintaining or repairing a pipe line or pipe lines' owned by the Humble Pipe Line Company; and the lien claimed by the second of these two companies is for trucking and hauling services performed for Ladewig Engineering Company under its contract with the Humble Pipe Line Company.

The principal question to be decided is whether the statute, Articles 5473 and 5474, gives to Crutcher, Rolfs, Cummings, Inc., and Kane Trucking Company rights to liens for the equipment, materials and supplies furnished by them and the trucking and hauling services rendered by them in the performance of Ladewig Engineering Company's contract with Humble Pipe Line Company. If these two companies are entitled to liens under the statute, they have taken the steps required to perfect their liens. It is necessary to look to the provisions of the statute, to the terms of the contract between Ladewig Engineering Company and Humble Pipe Line Company and to the facts in evidence as to what was contemplated to be done and what was done in the performance of that contract.

Article 5473, omitting words and phrases not relevant here, is as follows: 'Any person, corporation, firm, association, partnership, artisan, materialman, laborer or mechanic, who shall, under contract, express or implied, with the owner * * * of any gas pipe line or oil pipe line, or the owner of any oil or gas pipe line right-of-way, or with the trustee, agent or receiver of any such owner, perform labor, furnish or haul material, machinery or supplies used in digging, drilling, torpedoing, operating, completing, maintaining or repairing any such * * * oil or gas pipe line, shall have a lien on the whole of such * * * oil pipe line, or gas pipe line, including the right-of-way for same, * * * and upon the materials and supplies so furnished or hauled, and upon said * * * oil or gas pipe line, * * * for which said material and supplies were furnished or hauled or labor performed.'

Article 5474 is as follows: 'Any person, corporation, firm, association, partnership or materialman who shall furnish or haul such machinery, material or supplies to a contractor or subcontractor, or any person who shall perform such labor under a subcontract with a contractor, or who as an artisan or day laborer in the employ of such contractor or subcontractor shall perform any such labor, shall have a lien upon all such property or interest described in the preceding article, including right-of-way, for which said material and supplies were furnished or hauled and labor performed, in the same manner and to the same extent as the original contractor, for the amount due him for material furnished, or for such hauling or labor performed.'

It thus appears that those who furnish or haul machinery, materials or supplies, or perform labor, for a contractor are given the right to fix liens only in the event the contractor, had he himself furnished or hauled the machinery, etc., or performed the labor, would have been entitled to a lien under Article 5473.

The substance of the material portions of the contract between Humble Pipe Line Company, owner, and Ladewig Engineering Company, contractor, is as follows: The contractor agrees, with the necessary crews, tools, machinery and equipment furnished by it, to 'dismantle, haul, recondition, rack and load aboard cars' 50 miles of 8 inch pipe located between the owner's Arp station and Groesbeck station, and the pipe dismantled to be hauled by the contractor to reconditioning yards, approximately 15.55 miles at Fry's Gap, 19.35 miles at Palestine, 8.68 miles at Long Lake, and 6.67 miles at Mexia, Texas. The contract sets out in some detail the method for reconditioning the pipe, the amounts to be paid, by length of pipe, for dismantling and hauling and for work at the reconditioning yards, and the amounts to be paid for labor and equipment. The contract contains, among others, the usual provisions for protection of the owner against claims and demands in favor of the contractor's employees or third parties, agreements that the contractor shall pay all claims for labor and material and permit no liens to be fixed, and agreement that the owner may withhold payments in accordance with the provisions of Article 5469 of the statutes. Specifications, entitled 'Specifications for Dismantling' and made a part of the contract, prescribe the method for removing the pipe from the ground and dismantling it, for picking it up and hauling it to reconditioning and storage yards, for reconditioning and...