Lake v. Jones Lumber Co.

• Decision Date: 28 May 1921
• Docket Number: (No. 8533.)
• Citation: Lake v. Jones Lumber Co., 233 S.W. 1011 (Tex. App. 1921)
• Parties: LAKE et al. v. JONES LUMBER CO. et al.
• Court: Texas Court of Appeals

Page 1011

233 S.W. 1011

LAKE et al. v. JONES LUMBER CO. et al.

(No. 8533.)

Court of Civil Appeals of Texas. Dallas.

May 28, 1921.

Rehearing Denied October 8, 1921.

Appeal from District Court, Dallas County; E. B. Muse, Judge.

Suit by the Jones Lumber Company against G. E. Lake, the American Surety Company of New York, the Security Mortgage & Investment Company, and the Watson Company in which the two last-named defendants brought a cross-action against the first two named defendants. Judgment for plaintiff and for last-named defendant against the first two named defendants, and the first two named defendants appeal. Affirmed.

Grover C. Adams and Adams & Stennis, all of Dallas, for appellants.

Spence, Haven & Smithdeal and Holloway & Holloway, all of Dallas, for appellees.

HAMILTON, J.

This suit was instituted by the Jones Lumber Company against G. E. Lake and his surety, American Surety Company of New York, and also Security Mortgage & Investment Company and the Watson Company, for the recovery of the value of certain building material used in the construction of an addition to a building in Dallas owned by Security Mortgage & Investment Company. The Security Mortgage & Investment Company contracted with Watson Company for the construction of six additional stories upon the building. After the contract was thus made Watson Company subcontracted to G. E. Lake the plastering work on the building. The contracts were both in writing. Lake executed a bond with American Surety Company of New York as surety. By this bond Lake and American Surety Company contracted, among other stipulations, as follows:

"Know all men by these presents: That we, G. E. Lake, as principal, and American Bonding Company of New York, sureties, are held and firmly bound unto Watson Company, as well as all persons, firms, and corporations who may furnish material for or perform labor on the work, building, or improvements contemplated in the contract hereinafter mentioned, their heirs, executors, and administrators, jointly and severally, in the sum of five thousand dollars ($5,000.00) lawful money of the United States of America, for which payment we, the principal and sureties herein, do hereby jointly and severally bind ourselves, our heirs, executors, and administrators, firmly by these presents. * * *

"This bond is made for the use and benefit of all persons, firms, and corporations who may furnish any material or perform labor for or on account of said work, building, or improvement, and they and each of them are hereby made obligees hereunder the same as though their proper names were written herein as such, and they and each of them may sue hereon."

The work of the plastering was begun and carried forward for some time by Lake, but he did not complete it, and it was finished by Watson Company.

Plaintiff alleged that it had furnished all material used by Lake, and that he owed a balance, after being allowed all just and proper credits, amounting to $2,059.07, for which both Lake and American Surety Company were liable.

Recovery against Security Mortgage & Investment Company was sought upon allegations that the material supplied Lake was inwrought into its building, and that notice had been given it and verified claim of materialman's lien had been filed in the mechanics' and materialmen's records of Dallas county, all in the manner authorized by law; that concurrent with these events Security Mortgage & Investment Company was owing Watson Company, as the original contractor, for the construction of the addition to the building a sum much in excess of the debt due plaintiff for materials, and foreclosure of the mechanic's and materialman's lien so alleged to exist was prayed for.

Plaintiff alleged as against Watson Company that, when the mechanic's and materialman's lien was fixed against the building, as above stated, Security Mortgage & Investment Company was indebted to Watson Company; that Watson Company had contracted with Security Mortgage & Investment Company indemnifying it against all materialmen's liens and claims. It was also alleged in the same connection that Watson Company was indebted to Lake for material and labor used in constructing the building; and it was further alleged that Watson Company was made a defendant for the purpose of definitely ascertaining the state of the accounts between Watson Company and Security Mortgage & Investment Company and between Watson Company and Lake, and also because Watson Company was particularly named as obligee in the bond executed by Lake and the surety company.

The Security Mortgage & Investment Company and Watson Company filed cross-actions against Lake & American Surety Company of New York, which were practically identical. The cross-action alleged that Lake had violated his contract and abandoned the work, which resulted in Watson Company being compelled to complete it, and that in order to complete it Watson Company had expended $2,631.11 more than the contract price provided for between Watson Company and Lake.

Lake and the surety company answered, excepting generally to the petition and specially excepting to certain allegations, and also denying all the material allegations respectively made against them. The surety company alleged that it was deceived and defrauded by Lake, Watson Company, and plaintiff Jones Lumber Company at the time it became surety, that Watson, Jones Lumber Company, and Lake, knowing that Lake had insufficient assets to enable him to induce it to make the bond, conspired that Jones Lumber Company should turn over to Lake $3,000 to be deposited in the bank by him and to be included in a financial statement to American Surety Company's agent, and that such acts of deceit were perpetrated and carried out and resulted in the bond being executed, but that no such bond would have been made except for the fraud of the three parties. It was also alleged that the bond, although made in the name of Lake as principal, was the Jones Lumber Company's bond, and that it was the undisclosed principal in the contract with Watson Company signed by Lake and also in the bond. Lake alleged that Watson Company and Jones Lumber Company conspired together to prevent him from completing the work, and also alleged that, if the cost of completing it was more than the contract price, it was because the estimates made by him had not been followed, but had been disregarded. He sought $550 damages against Watson Company and Jones Lumber Company.

Various supplemental pleadings were filed joining issue as between the various parties upon their several contentions, but we do not regard a detailed statement of them essential to our discussion of the case.

The case was submitted to a jury upon special issues. Upon the answers returned by the jury judgment was rendered that the plaintiff Jones Lumber Company recover nothing against Security Mortgage & Investment Company and nothing against Watson Company. From this part of the judgment no appeal was prosecuted. But upon the jury's findings judgment was rendered against G. E. Lake and American Surety Company jointly and severally in favor of Jones Lumber Company for the amount sued for and also against them jointly and severally in favor of Watson Company for the amount alleged in its cross-action to be due. From this judgment Lake and the surety company have appealed.

Those assignments of error which insist that the general demurrer to the amended petition and to Watson Company's cross-action ought to have been sustained, we think, are without merit. These and all other assignments of error are jointly made in behalf of the appellants. The petition and Watson Company's cross-action both fully set forth facts revealing an indebtedness against appellant Lake. The bond is embodied in the petition, and its provisions in connection with the allegations descriptive of the surety company's liability clearly show a cause of action existing against it in behalf of Jones Lumber Company for materials furnished and used on the building in executing Lake's undertaking. The two clauses of the bond above quoted in stating the case are a basis of liability against the surety company under Jones Lumber Company's allegations and also under those of Watson Company's cross-action against appellants. In these circumstances the general demurrer in each instance was properly overruled.

Error is assigned to the effect that the court erroneously admitted as evidence, over appellants' objection, an affidavit and an itemized account attached thereto without any proof that the items of material contained in the account were used in the building upon which work was done. A bill of exceptions duly approved and embodying the proceedings complained of in this assignment is found in the transcript; but we are not referred to any portion of the statement of facts where the evidence is set forth, and so far as we are able to determine from a search of the statement of facts it seems not to contain the particular evidence about which complaint is made. The statement of facts controls, rather than the bill of exceptions, in such situation. Hence, since the evidence is not in the statement of facts, we think the assignment presents nothing for our consideration.

Various assignments of error complain of the admission as evidence of certain records designated as "slips" or "receipts." Without attempting to set forth all the evidence we think pertinent facts are deducible from it which are competent to prove the delivery of all the material, which Jones Lumber Company claimed to have delivered to Lake, and the evidence complained of related to items of material constituting the account upon which plaintiffs' suit was based.

These facts we find were established: That Jones Lumber Company made the deliveries of all the items in response to reque...