Bowen v. W.O. Eaton & Co.

• Decision Date: 19 November 1909
• Docket Number: No. 6,494.,6,494.
• Citation: 46 Ind.App. 65,89 N.E. 961
• Parties: ABNER T. BOWEN et al. v. W. O. EATON & CO. et al.
• Court: Indiana Appellate Court

46 Ind.App. 65

89 N.E. 961

ABNER T. BOWEN et al.

v.W. O. EATON & CO. et al.

No. 6,494.¹

Appellate Court of Indiana, Division No. 1.

Nov. 19, 1909.

Appeal from Circuit Court, Clinton County; Samuel R. Artman, Judge.

Action by Abner T. Bowen and others against W. O. Eaton & Co. and others, in which defendant William F. Frey and others filed a cross-complaint. From a judgment on the cross-complaint, plaintiffs appeal. Affirmed.John L. Hanna, Gus A. Hall, L. B. Boyd, and G. W. Julien, for appellants. N. J. Howe, for appellee Ruffing. Edmon P. Hammond, William V. Stuart, and Dan W. Simms, for appellees Frey, Frey & Taylor.

HADLEY, C. J.

This is an action on behalf of appellants on four promissory notes and proceedings in attachment against W. O. Eaton & Co., William O. Eaton, and Sheldon S. Eaton, and in garnishment against the county of Carroll as debtors of W. O. Eaton & Co., William O. Eaton, and Sheldon S. Eaton. There was a special finding of facts and conclusions of law stated thereon.

It appears from the special finding of facts that William O. Eaton and Sheldon S. Eaton in 1903-05 were doing business under the firm name of W. O. Eaton & Co., and under such firm name in 1903 entered into a contract for the construction of the Madison township gravel road, 19 1/4 miles in length, in Carroll county, for $28,800, estimates of the amount of work done to be made every 30 days or upon the completion of any portion of said work, 80 per cent. of such estimates to be paid as the work progressed. The work was to be completed by January 1, 1905, and the contract stipulated that, in the event said contractors failed to so complete said work, the board of commissioners, at their option, were authorized to complete the same according to plans and specifications, and charge the excess of the cost over the contract price, if any, to said contractors. Contemporaneous with this contract, they gave a bond for its faithful performance, which bond was signed by appellees W. O. Eaton & Co., William F. Frey, John C. Frey, S. O. Taylor, and S. S. Eaton; that said W. O. Eaton & Co. entered upon the work under its contract; that on August 7, 1905, said contractors had completed about six miles of said road and had worked on 12 1/4 miles of said road, and on said date said contractors abandoned said contract, and refused to complete the same, and on said date said bondsmen entered into an agreement with the board of commissioners for the completion of said road in accordance with the plans and specifications. By said agreement, said commissioners were requested to pay all money thereafter due for the construction of said road to appellee Russell K. Bedgood, who was to pay out of said money all expenses theretofore or thereafter incurred in the construction of said road, the surplus remaining after such payment to be paid over to W. O. Eaton & Co. or their assigns. By said agreement the parties thereto reserved all legal rights as between themselves or as between the sureties on the bond and W. O. Eaton & Co. and the board of commissioners; that, prior to the agreement last mentioned, the board of commissioners had paid to W. O. Eaton & Co., for work done on said contract the sum of $15,560, leaving unpaid on the contract price the sum of $13,240; that, after the agreement last mentioned, appellees Frey, Frey & Taylor took charge of the road, furnished the labor and material, and completed the same in accordance with the plans and specifications, and the same was duly accepted by the board, and they also repaired a portion upon which W. O. Eaton & Co. had done work prior to said agreement, which work was necessary in order to procure its acceptance by the board. During the construction of the road, under the last agreement, the commissioners paid out to Russell K. Bedgood for W. O. Eaton & Co., the sum of $9,896; that, under said agreement, said Frey, Frey & Taylor paid out upon debts incurred by W. O. Eaton & Co., prior to August 7, 1905, for labor and material used in the work done by them prior to said date, $4,177.36; for labor and material used in the repair of the work done by W. O. Eaton & Co., in order to secure its acceptance, $546.31; for the payment for labor and material used upon that part of the road wholly constructed after August 7, 1905, $7,912.53, making a total expended by said bondsmen of $12,636; that there were outstanding claims for labor and material used in the sum of $302.75. On November 14, 1905, said board of commissioners made an allowance to said Bedgood for Eaton & Co., under the last agreement, for the construction and completion of 3 1/4 miles of road wholly constructed by said bondsmen after August 7, 1905, in the sum of $3,344, which sum was garnished in this proceeding, and was ordered paid to the sheriff of Carroll county in response thereto. It also appears that on March 6, 1905, W. O. Eaton & Co. made an assignment to appellants of all amounts due said Eaton & Co., or that may grow to be due for work heretofore done, or that may thereafter be done as collateral to secure $500 loaned by said appellants to said Eaton & Co., said assignment being subject to an assignment to Joseph E. Ruffing; that on June 10, 1905, said Eaton & Co. executed to appellants an order on the auditor of Carroll county for the first $2,600 due on an estimate then to be made; that on February 8, 1905, said Eaton & Co. executed to Joseph E. Ruffing an instrument in writing, whereby they assigned to said Ruffing all their right, title, and interest in and to their said contract to said board of commissioners, and authorizing said Ruffing to collect from the board of commissioners the sum of $1,300; that on November 7, 1905, said assignments were filed as public documents in the auditor's office of said county; that appellees Frey, Frey & Taylor did not have knowledge of the contents of said assignments at the time they entered into the contract with the board of commissioners on August 7th, but did have notice that appellants and Ruffing had some sort of a claim against W. O. Eaton & Co. By their pleadings, appellants and appellee Ruffing seek to have the $3,344 allowed by the board of commissioners to Frey, Frey & Taylor that is now in the hands of the sheriff applied to the liquidation of the various debts owing them by Eaton & Co.; while Frey, Frey & Taylor seek to have the same applied to payment of debts contracted by them in the construction of the road. The court gave judgment for appellants and Ruffing for the amount of three notes and adjudged that appellees Frey, Frey & Taylor were entitled to have $2,644 of the money in the hands of the sheriff applied to the payment of their claims, and that $700 thereof should be applied to the payment of appellants' and appellee Ruffing's claims.

Appellants' complaint is in five paragraphs based upon promissory notes. In each the contract of Eaton & Eaton with the board of county commissioners for the construction of the Madison township gravel road is set up, and assignment of the same to appellants is averred and that the amount of $3,344 in the hands of the commissioners is due on said contract, and asking judgment for the amount of the notes, and that said board of commissioners be ordered to pay said sum in their hands on said contract to appellants. Each of said paragraphs also avers that appellees claim some interest in said fund, and they were made parties to answer as to such interest. Appellee Ruffing filed a cross-complaint against appellants and his coappellee, setting up the fact that he was surety for Eaton & Co. upon the note for $1,300 sued upon by appellants; that at the time of the execution of said note Eaton & Co. assigned to him, to protect him, all their right, title, and interest in their contract with the board of commissioners, with authority to collect a sufficient sum on said contract from said board of commissioners and apply the same to said note; that said Eaton & Co. were wholly insolvent; and that said assignment was prior in point of time and superior in point of fact to any claim of any of the other appellees. Appellees Frey, Frey & Taylor filed a cross-complaint making their coappellees and appellants parties defendant thereto. In this cross-complaint said Frey, Frey & Taylor set up the contract of Eaton & Co. with the board of commissioners for the construction of said road, their suretyship on the bond for its faithful performance, the abandonment of the work by Eaton & Co., and the subsequent agreement with the board of commissioners and said Frey, Frey & Taylor for the latter to complete the construction of the road and receive the money due therefor under the contract, and averring that the fund in controversy was for a portion of the road wholly constructed by said bondsmen, and that it was due them to compensate them for money expended in the construction of said road under said contract. To this cross-complaint appellants filed a demurrer: First, for defect of parties plaintiff; second, for want of sufficient facts. The overruling of these demurrers is assigned as error.

It is urged against the cross-complaint of Frey, Frey & Taylor that there is defect of parties plaintiff, in that S. S. Eaton and W. O. Eaton should have been named as parties plaintiff. W. O. and S. S. Eaton comprised the firm of W. O. Eaton & Co. They were the original contractors and principals in the bond in which Frey, Frey & Taylor were sureties. Cross-complainants are seeking to secure the application of the fund to the payment of obligations created by them under a subsequent agreement with the board of commissioners, in which said W. O. and S. S. Eaton joined. By this agreement, however, said Eatons were to receive nothing until after the payment of all claims for expenses created by cross-complainants in the prosecution and completion of the work and of all claims for labor and materials theretofore created by said Eatons in the...