A. J. Rife Const. Co. v. Brans

• Decision Date: 21 September 1956
• Docket Number: No. 15149,15149
• Citation: 298 S.W.2d 254
• Parties: A. J. RIFE CONSTRUCTION CO. et al., Appellants, v. Neil BRANS, Trustee, Appellee.
• Court: Texas Court of Appeals

Page 254

298 S.W.2d 254

A. J. RIFE CONSTRUCTION CO. et al., Appellants, v. Neil BRANS, Trustee, Appellee.

No. 15149.

Court of Civil Appeals of Texas, Dallas.

Sept. 21, 1956.

Rehearing Denied Jan. 11, 1957.

Turner, White, Atwood, McLane & Francis; Snowden M. Leftwich, Jr.; Thos. R. Hartnett, III, Dallas, for appellant.

Biggers, Baker, Lloyd & Carver; Touchstone & Bernays; Jas. A. Williams; Bradford & Pritchard; Johnson, Guthrie & Stanfield, and David C. McCord, Dallas, for appellee.

CRAMER, Justice.

This controversy involves two building contracts executed by the Housing Authority of the City of Dallas, hereafter called Housing Authority, and A. J. Rife Construction Company and Associates, hereafter called Rife, as well as numerous claims by subcontractors and others. Statement of facts contains 1,767 pages, transcript 134 pages. The two separate building contracts covered two Housing Projects. Project Tex-9-11-B covered 500 dwelling units, total consideration $2,650,330; Project Tex-9-11-E covered 510 dwelling units, total consideration being $2,573,500. The contract covering Tex-9-11-B was accompanied by a performance bond signed by Rife as principal and Seaboard Surety Company as surety; the contract covering Tex-9-11-E was accompanied by a performance bond signed by Rife as principal and U. S. Guarantee Company as Surety. Thereafter Rife, separately as to each project, subcontracted the masonry work on the projects to Morris Masonry Company, hereafter called Morris, who agreed to furnish all labor, mortar, bricks, supervision, and equipment necessary to complete the masonry work in accordance with the plans and specifications of Rife and the Housing Authority for a consideration of $80 per 1,000 bricks in place, based on a count satisfactory to both parties.

After hearing all the evidence, the trial court found in substance, material here: (1) Morris Masonry Company, a duly organized Texas corporation, was adjudged a bankrupt on June 29, 1954 and Neil Brans was duly appointed and is now acting as Trustee of Morris. Guthrie and McCord are duly licensed attorneys of the Texas Bar. Rife, as contractor, and Housing Authority entered into a written contract for the construction of the two projects here involved for a consideration of $2,650,330 on Project Tex-9-11-B with the U. S. Guarantee Company (hereafter called Guarantee) as surety; and $2,573,500 for Project Tex-9-11-E with Seaboard Surety Company (hereafter called Seaboard) as surety. Both bonds were conditioned that Rife shall promptly pay all persons, etc., furnishing material or labor on such contract signed by the surety. That Morris, as subcontractor, and Rife entered into two written contracts covering Project Tex-9-11-B and Tex-9-11-E, in each of which Morris agreed to furnish labor, mortar, supervision and equipment necessary to complete masonry work in accordance with plans and specifications of the general contractor and the Housing Authority for the respective projects in consideration of $80 per 1,000 bricks in place, based on a count satisfactory to both parties; that in compliance with such subcontracts Morris laid or installed 1,665,700 bricks in Project Tex-9-11-B, for which it was due the sum of $133,256; and that it laid or installed 1,718,550 bricks in Project Tex-9-11-E, for which it was due the sum of $137,484; that Rife paid Morris the sum of $124,446.83 on Tex-9-11-B, leaving a balance of $8,809.17; and that Rife paid Morris the sum of $112,224.51 on Tex-9-11-E, leaving a balance of $25,259.49; or a total balance due Morris for bricks laid on both projects of $34,068.66. Morris furnished Rife materials and labor and extras not contemplated by such subcontracts of a reasonable value of $1,132.10; that Morris instituted suit against Rife, Seaboard and Guarantee jointly, claiming from said defendants jointly the balance due on the projects mentioned and under the subcontracts referred to; that Rife and said two sureties filed joint answers, supplemental answers and trial amendment therein, and presented a joint defense to the claims of Morris. That the original answer of Rife and the sureties consisted of a general denial; thereafter Rife and sureties filed their first amended answer, first, second, and third supplemental answers, and trial amendment. In Rife et al.'s first amended answer they denied Morris had laid or installed the quantity of bricks alleged by Morris; but claimed Morris laid 1,652,090 bricks on Tex-9-11-B and 1.682,100 bricks on Tex-9-11-E, or a total of 3,334,190 bricks; that Morris was due therefor $266,735.20.

That after the trial had been under way fourteen days and Morris had rested, subject to the right to examine an out of State witness and offer proof of reasonable attorney's fees for Morris' attorneys, Rife filed an oral motion for judgment, asserting for the first time that there was and had been a dispute between the parties as to the number of bricks Morris laid on the projects; and that the contracts provided in the event of a dispute, same must be submitted to the contracting officer for decision within ten days of the commencement of the dispute, and that any claim not presented within such period was waived; and Morris had failed to present said dispute to the contracting officer for decision; that same was a condition precedent to bringing this suit and that it should be dismissed; that Rife further alleged 'in said oral motion for judgment, asserting for the first time herein, that as a condition precedent to filing suit herein, the plaintiff was required to submit said dispute to arbitration and that plaintiff had failed to do so, hence this suit should be dismissed.' That Morris 'submitted said dispute to said contracting officer within said ten-day period, but that he refused to consider same on the grounds that said dispute did not concern the Housing Authority of the City of Dallas.' That Rife and the sureities, Seaboard and Guarantee, 'jointly presented numerous offsets, all of which I find to be without merit, and are disallowed with the exception of the following: (a) I allow to the defendant A. J. Rife Construction Company and Associates, Seaboard Surety Company, and United States Guarantee Company, an offset against the joint claims made against these three defendants of $600 in liquidated damages paid by A. J. Rife Construction Company and Associates to the Housing Authority of the City of Dallas, and such liquidated damages are allowed as an offset because the attorney for the plaintiff, Neil Brans, Trustee of Morris Masonry Company, Inc., admitted in open court that such offset should be allowed and therefore there was no controversy with respect to this item. (b) I further allow the defendants, A. J. Rife Construction Company and Associates, Seaboard Surety Company, and United States Guarantee Company, jointly, an offset of $2,619.00 against the plaintiff, same being the reasonable value of scaffolds furnished plaintiff by the defendants, A. J. Rife Construction Company and Associates, but not returned, and that the defendant, A. J. Rife Construction Company and Associates and United States Guarantee Company and Seaboard Surety Company, as they contended, did not have to present this and other disputed claims to arbitration before presenting them in court.'

That Dallas Concrete Company furnished Morris with materials for use on the projects of the reasonable value of $3,740.52 and 'filed its claim therefor in the Bankruptcy Court in the above described bankrupt proceedings, and that said claim was duly allowed, but has not been paid * * *.' Rife and the two sureties jointly have urged the claim for which they assert their joint secondary liability be allowed; found further that Blue Diamond Company furnished Morris with materials for use on the said projects of the reasonable value of $2,179.29 and has filed its claim above allowed, but has not been paid; that Rife and sureties jointly have urged that this claim, for which they assert their joint secondary liability, be allowed.

Found that Texas Bank and Trust Company had a valid assignment from Morris of certain Accounts Receivable owed to it, including the final estimate of Morris to Rife dated October 14, 1953, with respect to Project Tex-9-11-E in the sum of $28,770.08 to secure its promissory note dated January 11, 1954 to said bank of $8,400; that the bank filed its claim therefor along with certain other claims owing it by said Bankrupt in the Bankruptcy proceedings and said claim was duly allowed; that said court has recognized said claim as a preferred claim over all other creditors and has allowed the Trustee to pay the bank more than $25,000 on its claim, but that the unpaid balance on the principal, May 24, 1955, was $2,715.79 and the bank has a preferred claim therefor, plus interest and attorney's fees in the Bankruptcy Court over all other creditors; that a reasonable attorney's fee for Morris' attorneys Bradford and Pritchard, is $3,500.

That David C. McCord and R. L. Guthrie have a valid assignment from Morris for services rendered of one-fourth of any recovery effected by Morris in this case and that said attorneys have asserted no claim against Morris in the Bankruptcy Court, but have elected to stand on their assignment which is not disputed by any party hereto.

The record before us shows no objections or exceptions to such findings by any party, and therefore they are binding on the parties and on this Court. Rules 296-299, Texas Rules of Civil Procedure; Dixie Distributors v. Lane, Tex.Civ.App., 211 S.W.2d 581 (ref. n. r. e.). The trial court's judgment was in favor of Dallas Concrete Company for $3,740.52, Guthrie & McCord, Attorneys, for $7,995.44, Blue Diamond Company for $2,179.29, Neil Brans, Trustee in Bankruptcy of Morris, for $18.066.51, Bradford & Pritchard, $3,500, Texas Bank & Trust Company, nothing, all against Rife, Seaboard and United Stated Guarantee, jointly and severally. The...