National Lumber & Creosoting Co. v. Mullins

• Decision Date: 03 April 1933
• Docket Number: 4-2951
• Citation: National Lumber & Creosoting Co. v. Mullins, 59 S.W.2d 493, 187 Ark. 270 (Ark. 1933)
• Parties: NATIONAL LUMBER & CREOSOTING COMPANY v. MULLINS
• Court: Arkansas Supreme Court

59 S.W.2d 493

187 Ark. 270

NATIONAL LUMBER & CREOSOTING COMPANY v. MULLINS

4-2951

Supreme Court of Arkansas

April 3, 1933

Appeal from Jefferson Chancery Court; Harvey R. Lucas, Chancellor reversed.

Decree reversed.

James D. Head, for appellant.

Danaher & Danaher, for appellee.

OPINION

MEHAFFY, J.

The appellee, J. F. Mullins, a contractor, entered into a contract with the Highway Commission for the construction of certain bridges on the State highway in Lafayette and Columbia counties. He, as principal, and the Consolidated Indemnity & Insurance Company as surety, entered into a bond as provided by act 368 of the Acts of the General Assembly of 1929, conditioned as prescribed by said act. The appellant furnished material of the value of $ 5,739.26. This suit was brought in the Jefferson Chancery Court against the contractor and the surety company for this amount.

Mullins filed answer, denying the indebtedness and denying that final estimate had been made, and alleging that, under the terms of the contract, he was not to pay for the material until he had received payment from the Highway Department, and that no such payment had been received. He further alleged that it was a general and uniform custom well known to the appellant and was a part of the contract, that the purchase price of material would not become due until the contractor had collected from the Highway Department.

The surety company answered denying liability, and alleging that the claim was barred because suit was not begun until more than six months after the completion of the work; that it was not liable on the bond because the Commission had breached the contract by failing to pay Mullins, thereby preventing him from paying appellant. The surety company also alleged that the contractor was not to pay for material until he received payment from the Highway Department, and that this payment had not been made, and that therefore there was nothing due to appellant. It also denied all the material allegations in the complaint.

The Highway Department answered, alleging that final voucher had been issued and turned over to the bonding company; that it had not been paid and was still in the hands of the bonding company; the voucher issued and turned over to the surety company was for $ 6,486.11.

The question for our consideration is whether, under the contract, the amount owing to appellant was due in thirty days after it was furnished, or whether it was due after the Highway Department had paid the contractor. The following, which was rendered to Mullins, the contractor, was introduced in evidence:

"May 22, 1931

"Diet. 5/21/31

"Quotation

"No. T-57

"Subject: Inquiry treated lumber and piling for Arkansas Highway Project 1133, for delivery Waldo, Lewisville, Buckner and Stamps, Arkansas.

"Mr. J. F. Mullins,

"Pine Bluff, Ark.

"Dear sir:

"To confirm 'phone conversation of today, we quote below f. o. b. cars above points--terms thirty days net, subject to your acceptance within thirty days--the following yellow pine piling, and yellow pine and west coast fir lumber--all treated in accordance with Arkansas State Highway specifications:

"12 SYP Piles

26'

"22

28'

"24

30' $ .31 1/2 B. Ft.

"68

32'

"24

34'

"Approx. 70,000 B. Ft. treated Fir & YP lbr., framed, $ 62.50 MFBM.

"If you should take over this project, we sincerely trust that our quotation will enable you to favor us with your order. However, if the award goes to another, will appreciate your advising us as to the contractor's name and address.

"CC-WW Snodgrass

"F. J. Williams

"Very truly yours,

"National Lumber & Creosoting Co.

"By:"

This quotation bears the following notation in pen and ink:

"Pine Bluff 6/6/31

W.L.M.

"Saw Mr. J. F. Mullins this morning, and he is giving us this order, and is having correct list made at Little Rock and mail order in to us Monday or Tuesday.

"F. J. W."

Mullins, the contractor, testified that he talked to Mr. Williams, the representative of appellant, and that nothing was said about the payment, and in fact nothing was discussed but the price, nothing was said in their conversation about when it was to be paid. Mullins also testified that on another job he had had a conversation with a different agent of appellant, and told the agent that he had always bought his material to be paid for as he received his money, and that the agent said that this was satisfactory; that he, Mullins, expected to pay when he received his money as the work progressed; that he had received no money, but merely warrants.

We do not set out the entire testimony of Mullins, but he testified positively that in this contract there was nothing said about custom or anything else except the price. There was some evidence about the contractor not being able to pay until he received money from the State.

M. K. Orr testified that the custom had been that the money had to come from the job to pay for the material, and that all companies understood that; that when estimates were paid the contractor paid the material-man; that this had been the custom.

Mr. Schnable also testified to the custom, his evidence being substantially the same as that of Orr and Mullins.

F. J. Williams, representative of appellant, testified that it had never been appellant's custom to furnish materials and wait until the contractor was paid; that their contracts always had been made payable at times definite and certain.

Orr, being recalled, testified that, although the quotation carried a 30-day clause in it, the understanding was that the money was to come out of the job. He also testified that the State first fell behind in its payments in October or November.

Mullins, being, recalled, testified that, in the conversation discussing the buying of these materials, there was no discussion as to what dates or when payments should be made; that was not discussed in the last order, but it was in the first order; that that conversation related, not only to that job, but to future jobs, and that in this contract there was nothing definite about the time of payment; the conversation was merely about prices, and that was all that was discussed. There was some correspondence between the parties, but it is unnecessary to set it out here.

The appellant introduced the contractor's bond and warrant for the final estimate which had been given to the surety company, and introduced copy of the statement of May 22, 1931, showing that the terms were 30 days net. The evidence also shows that Mullins said that if the price was satisfactory he would give the appellant the job.

It is not contended by the appellees that anything was ever said about when the material should be paid for. Mullins does testify that at some other time he bought some material from an agent named Brown, and discussed the custom, and that it was understood that that applied to future contracts as well as the one made with Brown. He does not say when this contract with Brown was made, and, so far as the record is concerned, it may have been years before.

After the evidence was introduced, the court found that appellees were indebted to the appellant in the sum of $ 5,739.26 with interest at the rate of 6 per cent. per annum from 30 days after the several dates of the itemized statements, but the court found that under the contract the indebtedness was to be paid out of the amount due from the State of Arkansas, which had not been paid. The court also found that the voucher for the last estimate, $ 6,486.11, was issued and delivered to the appellee surety company.

The court rendered judgment in favor of the appellant for the amount sued for, but...