Bower v. Tebbs, s. 9470

Citation132 Mont. 146,314 P.2d 731
Decision Date21 August 1957
Docket Number9471,Nos. 9470,s. 9470
PartiesRay F. BOWER and Gerald Ryan, Plaintiffs and Respondents, v. Cal M. TEBBS, doing business under the name and style of Cal M. Tebbs Construction Co., and the Employer's Liability Assurance Corp., Ltd., a Corporation, Defendants and Appellants.
CourtUnited States State Supreme Court of Montana

Toomey & Hughes, Edmond G. Toomey and Michael J. Hughes, Helena, Michael J. Hughes, argued orally, for appellants.

Ralph J. Anderson, Helena, George P. Sarsfield, Butte, Stanley P. Sorenson, Helena, Ralph J. Anderson and George P. Sarsfield, argued orally, for respondents.

HARRISON, Chief Justice.

These cases come up on appeal by Cal M. Tebbs, an individual doing business under the name and style of Cal M. Tebbs Construction Co., and the Employer's Liability Assurance Corp., Ltd., a Corporation, defendants, from a judgment of the district court of Lewis and Clark County in favor of each of the plaintiffs, Ray F. Bower and Gerald Ryan, in two actions, consolidated for trial and tried to the court sitting without a jury. Both cases grew out of several claims of the plaintiffs (four by plaintiff Ryan and one by plaintiff Bower) against a contractor, Cal M. Tebbs, which claims arose during the performance by the contractor Tebbs of a contract with the State Highway Commission of the State of Montana for the construction, by Tebbs, of a certain section of highway in Madison County, Montana. The codefendant in each action, the Employer's Liability Assurance Corp., Ltd., is the surety on the bond given by the contractor to the State of Montana pursuant to the provisions of R.C.M.1947, § 6-401.

It is alleged in the complaint filed by each of the plaintiffs, and admitted by the separate answers filed by each of the defendants, that on or about November 17 1949, Tebbs entered into a contract with the State Highway Commission of the State of Montana, whereby Tebbs agreed to construct a described section of highway in Madison County, Montana. The complaint set forth, and the answers admit that on or about the same date, the Employer's Liability Assurance Corp., Ltd., entered into a bond in writing as required by R.C.M.1947, §§ 6-401 to 6-404, inclusive. The condition of said bond being as follows:

'Now, Therefore, the condition of this obligation is such that if the above bonded 'Principal' as Contractor shall in all respects faithfully perform all of the provisions of said contract, and his, their or its obligations thereunder including the specifications therein referred to and made part thereof and such alterations as may be made in said specifications as therein provided for and shall well and truly, and in a manner satisfactory to the State Highway Commission, complete the work contracted for, and shall save harmless the State of Montana, from any expense incurred through the failure of said Contractor to complete the work as specified, or from any damages growing out of the carelessness of said Contractor or his, their, or its servants, or from any liability for payment of wages due or material furnished said Contractor, and shall well and truly pay all laborers, mechanics, subcontractors and material men who perform work or furnish material under said contract, and all persons who shall supply him or the subcontractor with provisions, provender and supplies for the carrying on of the work, and also shall save and keep harmless the said State of Montana against and from all losses to it from any cause whatever including patent, trademark and copyright infringements, in the manner of constructing said section of work, then this obligation to be void or otherwise to be and remain in full force and virtue.'

Each of the plaintiffs, Bower and Ryan, alleged that during the construction work, 'numerous persons performed work and labor in the construction of said road and highway and drainage structures and that numerous other persons furnished to the defendant Tebbs provender, materials, supplies, provisions and goods in the prosecution of such work and the making of such improvements and that after the work was done by such persons and after provender, materials, supplies, provisions or goods which were furnished in the prosecution of the work and making of the improvements this plaintiff advanced to such persons amounts due and owing to them for such work, provender, materials, supplies, provisions and goods from the said Tebbs and that such amounts of cash so advanced as herein alleged and set forth was done with the knowledge and consent of these defendants and that thereby and by reason thereof the plaintiff became in equity the assignee of all such claims as hereinabove mentioned of the persons to whom such advancements were made and thereby became subrogated to all of the rights of such persons as against these defendants.'

In addition, plaintiff Ryan alleged that he, Ryan, during the construction of said road and the performance of said contract, 'performed certain services personally which entered into the construction of said road and the performance of said contract; that he rented to the defendant Tebbs certain equipment for the performance of said contract and used in the construction of said highway and road for which the said Tebbs agreed to pay the rental value of the use of said equipment * * *'

These allegations were denied by the answer of each of the defendants. Plaintiff Bower alleged he advanced the sum of $8,000 to the persons who furnished to Tebbs provender, materials, supplies, provisions and goods and sought recovery of this sum, plus attorneys' fees.

Plaintiff Ryan alleged that the money due, as a result of the services he performed, the rental due on equipment by him furnished, and the advancements by him made to the persons who performed work and labor, and the persons who furnished to Tebbs provender, materials, supplies, provisions and goods, was $14,682.83, and prayed recovery of this sum, plus attorneys' fees.

The actions were tried to a court sitting without a jury on January 18, 1954. The evidence adduced at the trial showed that Bower was then, and at all times material to this action had been, president of the Farmers State Bank of Worland, Wyoming. He knew Tebbs since about 1946. Bower also knew one Donald Scheib who was the attorney-in-fact for the Employer's Liability Assurance Corp., Ltd. Ryan was employed by Tebbs as a foreman on the highway project here involved.

After the contract had been let and the bond executed on November 17, 1949, Tebbs and Ryan each worked on the job, until the job was closed down about January 10, 1950. About that time Tebbs' financial difficulties commenced. Between January 16, 1950, and February 4, 1950, Bower's bank paid some sixty-one checks, totaling some $5,086.98, drawn against Tebbs' account with Bower's bank, the bank extending credit to Tebbs on his note to cover these checks. These checks as introduced into evidence were all marked paid.

However, more checks drawn against Tebbs' account had been presented to Bower's bank for payment and some had been returned twice for insufficient funds and Bower testified that, 'The Bank at Sheridan had given this notice they would no longer cash checks drawn on the Farmers State Bank because of the difficulties they had with short checks and that any further checks they cashed for payrolls would have to be paid out of funds which would be placed in their bank.' Bower testified that on or about February 17, 1950, (this date is open to some conjecture) his bank was unwilling to advance further credit to Tebbs, and that at that time there was $8,000 in checks drawn against Tebbs' account outstanding and unpaid, but which were in his bank on that date.

Bower, Tebbs and Ryan all convened in the bank as of the date the bank held the $8,000 in unpaid checks to discuss a solution to the problem faced by Tebbs. Tebbs and Ryan concluded it would require an additional $6,500 to complete the job. Thus at this time Tebbs was faced with three distinct financial problems: (1) There was $5,086.98 in checks which had been paid and which Tebbs had covered with his note to the bank; (2) There were other checks drawn by Tebbs totaling about $8,000, which were still unpaid; (3) There was the problem of raising $6,500 to complete the job.

Bower then called Scheib, the surety's attorney-in-fact, in Denver, Colorado. Bower explained the situation to him, and indicated that if nothing was done about the unpaid checks, the bank would return them again. Bower then asked Scheib if it would be possible for him, Bower, to purchase the $8,000 worth of checks, Scheib said it would be all right. Bower asked Scheib if it would be necessary for him, Bower, to take an individual assignment from every one of the holders of the checks, and he said he didn't think it would be necessary. He thought if Bower purchased the checks that he would stand in the position of the claimants.

Bower testified that it was his idea when he picked up the checks that he would be in the position of the individual claimants themselves; this conclusion being based upon the representation of Scheib, who said he did not think it necessary to get assignments from each one. He also testified that Scheib and he discussed the further financing of the project, and it was agreed that Ryan would pick up the note of Tebbs for the $5,000 credit extended to him under the former dealings and that he would also extend a loan to Tebbs for $6,500 to conplete the job, this latter sum for the purpose of paying future payrolls. Bower testified that Scheib had agreed to this arrangement, and had indicated that Ryan would occupy the same situation as the individual laborers or materialmen under the bond. Scheib never spoke directly with Ryan. It should be added that with respect to the $5,000 worth of paid checks covered by Tebbs' note, there was no testimony that Scheib made any direct...

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25 cases
  • State v. Garrymore, 04-644.
    • United States
    • Montana Supreme Court
    • October 2, 2006
    ... ...         ¶ 62 We have long held that "a party complaining of error must stand or fall upon the ground relied on in the trial court." Bower v. Tebbs, 132 Mont. 146, 160, 314 P.2d 731, 739 (1957). The rationale underlying this rule is that it is fundamentally unfair to fault the trial ... ...
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    • Montana Supreme Court
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    ...record discloses that Tanner's testimony was not challenged at trial. A well established rule in Montana is stated in Bower v. Tebbs, 132 Mont. 146, 160, 314 P.2d 731, 739: 'Objections which are urged for the first time on appeal will not be considered by this See also: Teesdale v. Anschutz......
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    ...which is not dependent on any contractual relationship between the parties and is not dependent on privity. Bower v. Tebbs (1957), 132 Mont. 146, 155, 314 P.2d 731, 736. The purpose of subrogation is to prevent injustice by "compel[ling] the ultimate payment of a debt by one who, in justice......
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