Carruth v. Valley Ready-Mix Concrete Co.

• Decision Date: 20 May 1949
• Docket Number: No. 2730.,2730.
• Citation: 221 S.W.2d 584
• Parties: CARRUTH v. VALLEY READY-MIX CONCRETE CO.
• Court: Texas Court of Appeals

221 S.W.2d 584

CARRUTH v. VALLEY READY-MIX CONCRETE CO.

No. 2730.

Court of Civil Appeals of Texas. Eastland.

May 20, 1949.

Rehearing Denied June 17, 1949.

Appeal from District Court, Cameron County; Arthur A. Klein, Judge.

Action by the Valley Ready-Mix Concrete Company against Cecil Carruth, J. D. Cottle and Roy Kirk on an open account for building materials sold by plaintiff to defendants Cottle and Kirk as building contractors working for defendant Carruth and to foreclose a materialmen's lien against property of defendant Carruth, who filed a cross-action against codefendants for the amount of an overpayment to them. From a judgment for plaintiff against defendant Carruth, he appeals.

Reversed and remanded.

Greenwood, Johnson & Phillips, Harlingen, for appellant.

Gibbon, Coneway & Johnson, Harlingen, for appellee.

GRISSOM, Chief Justice.

Cecil Carruth had some buildings erected and repaired by J. D. Cottle and Roy Kirk, contractors. Cottle and Kirk obtained materials for the buildings from Valley Ready-Mix Concrete Company for which it was not paid and it sued Carruth and Cottle and Kirk.

Valley Ready-Mix Concrete Company, hereinafter called Valley, in the first count of its amended petition, sued Cottle and Kirk on an open account for goods, wares and merchandise sold to Cottle and Kirk, who were alleged to be building contractors working for Carruth. Valley sought judgment against Cottle and Kirk for its account and foreclosure of a materialmen's lien against the property of Carruth. In the second count Valley alleged that Carruth entered into an oral contract with Cottle and Kirk, as contractors, for the erection of buildings and improvements on property owned by Carruth; "that the contract so entered into by * * * Carruth and Cottle and Kirk, contractors, is what is commonly designated in the building occupation as a `cost plus' contract." That thereby Cottle and Kirk, as contractors, became bound to construct said improvements and procure materials therefor. That in constructing said buildings and improvements and in purchasing materials, Cottle and Kirk acted as agents for Carruth; that Cottle and Kirk were "by reason of said `cost plus' contract then and there authorized to make contracts for the purchase of material — for the construction of said houses — in the name of either — Carruth or in the name of the contractors —," and when materials were purchased by Cottle and Kirk, Carruth became bound to pay for them. (Italics ours.) Valley then alleged that, on the dates shown on the account, Cottle and Kirk, acting as agents for Carruth, purchased said merchandise from Valley; that said materials were sold and delivered to Carruth, by and through said agents, "at the order and request of his agents, defendants Cottle and Kirk, who were authorized under their original `cost plus' contract to so act." (Italics ours.) That in furnishing the materials Valley relied on the credit of Carruth; that, thereby, Carruth and Cottle and Kirk became bound to pay plaintiff the reasonable value of the materials furnished. Valley further alleged that the materials were furnished to Cottle and Kirk, as agents for Carruth, under an oral contract with Valley and they were furnished and delivered so that they might be used in the erection and repair of certain buildings; that since Valley furnished the materials to Carruth "through (his) agents, Cottle and Kirk, there was created" a constitutional lien on said buildings.

In the third count Valley alleged that said merchandise was ordered by Cottle and Kirk for Carruth, who was then incapacitated; that same was furnished to Cottle and Kirk, as agents for Carruth, at "their" special instance and request; that Carruth knew, or should have known, the materials were furnished and delivered to his agents; that they were delivered for the benefit and enrichment of Carruth and were used in the erection of his buildings; and, therefore, Carruth was bound to pay for them.

Carruth answered that Cottle and Kirk were engaged by him as independent contractors to erect the buildings and make the repairs for cost plus 15%. He denied under oath that Cottle and Kirk were his agents. He alleged that he had over paid Cottle and Kirk; that Valley had "billed" Cottle and Kirk directly and not Carruth, for the materials and carried the account in the name of Cottle and Kirk, as independent contractors. Carruth alleged that under his contract with Cottle and Kirk, they were given the exclusive right to hire and fire necessary workmen and to buy and procure, from whatever source they desired, materials necessary for the erection or repair of his buildings and that Carruth was to reimburse Cottle and Kirk for all necessary expenses paid by them, plus 15%.

In a trial to the court, judgment was rendered for Valley against Carruth and the contractors, Cottle and Kirk, for the account and against Carruth for foreclosure of a materialmen's lien. Judgment was rendered for Carruth on his cross-action against Cottle and Kirk for $2,143.92 over payment. Carruth has appealed from the judgment against him in favor of Valley Ready-Mix Concrete Company. The case is presented here without a statement of facts.

The trial court filed the following findings of fact and conclusions of law:

"1. The firm of Cottle and Kirk, a partnership composed of J. D. Cottle and Roy Kirk, building contractors, entered into an oral contract in the early part of May, 1947, with Cecil Carruth, for the construction of a building on property belonging to Cecil Carruth. Legal description of said property being Lot 13, Block 1, of the R. J. Kroeger addition to the City of Harlingen, County of Cameron, Texas. This building is commonly called `Oscar's Place' or the `Nite Club' building.

"2. It was agreed and understood initially by and between the parties that the contractors were to purchase and pay for all materials and hire labor and pay for the labor and to submit weekly statements to the defendant, Cecil Carruth, for reimbursement. The defendant Cecil Carruth agreed to pay for the cost of materials, labor and like charges, and further agreed that Cottle and Kirk would be entitled to an amount equal to 15% of all materials, labor, and like charges as their compensation. The contract was what is commonly called a cost plus fee basis contract in which the cost of materials and labor plus the stipulated fee forms the basis of payment.

"3. By reason of the lack of money on the part of the contractors and due to an injury to the defendant, Cecil Carruth, which hospitalized him, the defendant, Cecil Carruth, actually paid the contractors for the labor performed and the material purchased prior to the time the materialmen were paid by the contractors and prior to the time the laborers were paid by the contractors. The contractors would receive a check for the weekly statement from the owner, Cecil Carruth, and in turn would pay labor and materialmen. This arrangement occurred during the existence of the contract between Cecil Carruth and Cottle and Kirk.

"4. Shortly afterwards the parties entered into an oral contract on the same basis for the erection of a building on Lot 4, and the north 125 feet of Lot 3, Block 37, original townsite of the City of Harlingen, which building was commonly called the `washateria' building, and for repairs on an apartment house located on `First and Cleveland' Street in the City of Harlingen, and located on Lot 1, Block 4, Finwood Addition to the City of Harlingen, and for repairs on a building called Blossom Heath building.

"5. That on or about the 2nd day of May, 1947, shortly after making the contract, the defendant, Cecil Carruth, was injured and hospitalized.

"6. After the defendant, Cecil Carruth, was hospitalized the contractors, Cottle and Kirk, submitted weekly statements with summarizations for all materials purchased as reflected by invoices addressed to them and labor performed, and presented them to the defendant, Cecil Carruth, at the hospital. Cecil Carruth, without checking the weekly statements, paid the contractors, Cottle and Kirk, the total amount of material purchased and labor performed, for the week as reflected in the statements, plus 15% fee.

"7. That during the period from May 2nd to June 21st, 1947, the plaintiff, Valley Ready-Mix Concrete Co., a corporation, delivered materials to various Carruth jobs in the regular course of business at the instance of Cottle and Kirk in a total amount of $3,016.64; the charges for the materials furnished Cottle and Kirk were carried on the books of the plaintiff in one account in the name of Cottle and Kirk.

"8. Delivery tickets representing the delivery of materials actually delivered were furnished on delivery of each load of materials by the plaintiff and signed for by Cottle and Kirk or their agents, employees or servants. Twenty-four hours after delivery of materials to Cottle and Kirk delivery tickets were compiled and invoices for the delivery of the materials were sent to Cottle and Kirk. Each invoice reflected on its face the date of delivery, the name of the owner, Cecil Carruth, and the address or description of the property to where the material was delivered with the exception of two invoices. The two invoices which did not reflect the name of the owner or the place of delivery of the materials, did in fact represent materials to the improvement commonly known as `First and Cleveland' job.

"9. That pursuant to the cost plus contract existing between Cottle and Kirk, contractors, and the owner, Cecil Carruth, the contractors received invoices from the various materialmen delivering materials to the Cecil Carruth jobs for the purpose of checking them against delivery tickets and actual deliveries to ascertain that the invoices were correct prior to submitting statements to Cecil Carruth for payment.

"10. That between May 2nd and June 12th, 1947, weekly statements were submitted by the contractors for all...