Employers' Casualty Co. v. Wolfe City

• Decision Date: 12 March 1930
• Docket Number: No. 1177-5165.,1177-5165.
• Citation: 25 S.W.2d 320
• Parties: EMPLOYERS' CASUALTY CO. et al. v. WOLFE CITY et al.
• Court: Texas Supreme Court

25 S.W.2d 320

EMPLOYERS' CASUALTY CO. et al. v. WOLFE CITY et al.

No. 1177-5165.

Commission of Appeals of Texas, Section A.

March 12, 1930.

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

Suit by Wolfe City and others against the Employers' Casualty Company and another, in which the First State Bank of Wolfe City and others intervened. A judgment of the trial court was affirmed [3 S.W.(2d) 527], and defendants bring error.

Affirmed in part, reversed and rendered in part, and cause remanded for new trial.

Lawther & Pope, of Dallas, for plaintiffs in error.

Bowman & Bowman and Clark, Harrell & Starnes, all of Greenville, and Jones & Jones, of Mineola, for defendants in error.

CRITZ, J.

The city of Wolfe City brought this suit in the district court of Hunt county, Tex., against T. A. Bradshaw and Employers' Casualty Company, a corporation. The following circumstances formed the basis of the litigation between the city and Bradshaw.

Bradshaw entered into a contract with the city to build a waterworks dam for it according to certain plans and specifications prepared by the city's engineer. The contract provided for a bond in the sum of $5,000. The Employers' Casualty Company furnished the bond. Bradshaw failed to complete the work so undertaken by him, and the city took charge and proceeded therewith until it had expended the sum of $2,152.60, but left same still incomplete because it had exhausted all available funds that the city could use for the purpose. The evidence shows and the jury found that it would have cost $3,000 for the city to finish the dam according to the contract.

The First State Bank of Wolfe City intervened in the suit seeking to recover from Bradshaw and the indemnity company about $3,800 alleged by the bank to have been paid out by it in settlement of claims of laborers and materialmen against Bradshaw. Also A. A. Humphrey intervened on a claim for work performed by him. Also others not necessary to mention here intervened.

The city prayed for a judgment against Bradshaw and the surety company for $1,222.80.

Trial in the district court before a jury resulted in a verdict on special issues and judgment thereon as follows:

(a) Judgment for the city against Bradshaw and the casualty company for $2,842.75, with interest and costs.

(b) Judgment for the First State Bank of Wolfe City against Bradshaw and the casualty company for $3,800, with interest at six per cent. and costs.

(c) Judgment for A. A. Humphrey for $95.55 against Bradshaw and the casualty company, with interest and costs.

(d) The judgment then contained the following provision:

"And it appearing to the Court, that there is on deposit with the intervenor, First State Bank of Wolfe City, Texas, a sum of $3,800.00 belonging to the City of Wolfe City, constituting a portion of the funds derived from a bond issue for the purpose of construction of the work in question and that had the work been completed in accordance with said contract and said alterations thereof, the defendant, Bradshaw, would have been entitled to have the same applied to the payment of the several claims for labor established by the intervenor bank in this cause.

"The Court is of the opinion, that under the judgment in this case, the defendants are entitled to have the same applied now, as though the work had been completed by said Bradshaw.

"It is therefore, further ordered, adjudged and decreed by the Court, that the sum of money so on deposit in said bank, be applied towards the discharge of the judgment herein rendered as follows: $2,842.75 shall be applied in discharge of the judgment herein rendered in favor of the City of Wolfe City and the balance thereof shall be applied to the payment and discharge, so far as it will go, of the judgment rendered in favor of the said First State Bank of Wolfe City, Texas."

The surety company and Bradshaw both appealed to the Court of Civil Appeals for the Fifth District at Dallas, which court affirmed the judgment of the district court. 3 S.W.(2d) 527. Bradshaw and the casualty company both applied for writs of error to the Supreme Court, and both applications were granted.

We shall first proceed to dispose of the case as between the casualty company and the First State Bank. It is the contention of the casualty company that the bond furnished by it does not cover or embrace the claims for $3,800 herein sued for by the bank, and this contention is presented to this court by proper assignments The bank's claim is based on the following transactions:

After the contract between the city and Bradshaw had been entered into, and after the bond had been furnished and accepted by the city, and after the work had progressed to a considerable extent, up to which time the bank had no connection or interest whatever in the matter, it is shown that Bradshaw needed money with which to pay claims of laborers and materialmen who had worked on, and furnished material for the project; that the laborers had quit work, and both the laborers and materialmen were demanding their money; that Bradshaw applied to the bank for money with which to pay the above claims; that the bank was willing to advance the money, but desired to be protected in the premises; that the bank's attorney advised that, if Bradshaw would give an order on the city for the amount of the claims, and agree that the bank should take the place, and stand in the shoes of, those...