Patten v. Hill County

• Court: Texas Court of Appeals
• Writing for the Court: Gallagher
• Citation: Patten v. Hill County, 297 S.W. 918 (Tex. App. 1927)
• Decision Date: 26 May 1927
• Docket Number: (No. 493.)<SMALL><SUP>*</SUP></SMALL&gt
• Petition History: writ dism'd
• Parties: PATTEN v. HILL COUNTY et al.

297 S.W. 918

PATTEN v. HILL COUNTY et al.

(No. 493.)^*

Court of Civil Appeals of Texas. Waco.

May 26, 1927.

Rehearing Denied September 8, 1927.

Appeal from District Court, Hill County; Horton B. Porter, Judge.

Suit by Harry R. Clark against Hill County, Nathan Patten, trustee in bankruptcy of W. S. Bibb, Jr., who filed a petition of intervention, and others to recover moneys due him as a subcontractor consolidated and tried with various other suits. From the judgment below, Nathan Patten, trustee in bankruptcy, appeals. Affirmed.

See, also, 254 S. W. 241, 267 S. W. 265.

S. E. Stratton and J. W. Spivey, both of Waco, for appellant.

F. M. Fitzpatrick and Sleeper, Boynton & Kendall, all of Waco, and John Abney, of Hillsboro, for appellees.

GALLAGHER, C. J.

This appeal is prosecuted by Nathan Patten, trustee of the bankrupt estate of W. S. Bibb, Jr., from a judgment of the district court of Hill county denying him a recovery against Hill county and road district No. 7 thereof for an alleged balance of $7,620.62, which he claimed was due to the bankrupt as an unpaid balance on a road building contract. Hill county, on November 22, 1920, entered into a contract with Bibb & Hughes, a partnership composed of W. S. Bibb, Jr., the bankrupt herein, and Joe D. Hughes, for the improvement of a certain road in road district No. 7 of said county. The American Surety Company, one of the appellees herein, was the sole surety on their bond as such contractors. Said contract was executed in whole or in part, and the county and the road district for which it acted in making the same became liable under the terms thereof for the compensation promised therein, which, on October 12, 1922, apparently after discharging all lawful claims of laborers and materialmen, amounted to the net sum of $7,620.62, the same being the moneys in controversy in this suit.

Hill county for itself and for certain of its road districts, including road district No. 7, on April 29, 1921, filed a suit against W. S. Bibb, Jr., Joe D. Hughes, and the American Surety Company for damages for the conversion of certain road bonds, among which were bonds of said road district No. 7 of the face value of $242,000. Said suit was transferred to Ellis county. On January 9, 1922, judgment was rendered therein that Hill county recover of and from W. S. Bibb, Jr., Joe D. Hughes, the firm of Bibb & Hughes, and the American Surety Company, jointly and severally, for the use of said several road districts the sum of $461,437.52. Certain sums of money on deposit in certain banks, parties defendant in said suit, were ordered applied to the satisfaction of said judgment. After the application of said deposits, the pro rata part of said judgment belonging to said road district No. 7 and remaining unpaid on said date of October 22, 1922, was $54,249.14. Said judgment was for damages for tort and expressly denied a recovery on the contractual obligations sued on in said cause. The recitals therein show that said bonds were delivered to W. S. Bibb, Jr., in person under a verbal agreement between him and the commissioners' court of Hill county that he would sell the same and account for the proceeds, and that he did personally sell the same and receive the proceeds of such sale. Hughes was not a party to such agreement and was not shown to have participated in such transaction. The judgment against him and the partnership, according to the recitals in said judgment, was based on findings by the jury that said transaction by Bibb with the commissioners' court was within the ordinary scope of the business of said firm, and that he was acting for the firm therein. Neither Bibb nor Hughes appealed from said judgment, but the American Surety Company did appeal. See American Surety Co. v. Hill County (Tex. Civ. App.) 254 S. W. 241 et seq.; Id. (Tex. Com. App.) 267 S. W. 265 et seq. Said judgment was affirmed on appeal, and after applying said bank deposits as a credit thereon and after deducting the $7,620.62 in controversy in this suit, which sum was also credited thereon as hereinafter shown, the balance due thereon was paid in full by the surety company on October 5, 1925.

The firm of Bibb & Hughes was dissolved by mutual consent on December 3, 1921. The dissolution agreement was in writing. It recited a consideration of $15,000, evidenced by note executed by Bibb and payable to said Hughes and due four months after date. It by its terms conveyed to Bibb "all of the property of every kind, character, nature, and description owned by the said firm of Bibb & Hughes," and said Bibb therein agreed to assume and pay all accounts and notes owing by said firm to any person or persons whomsoever. Said Hughes therein, in consideration of the premises assigned to Bibb all his right, title, interest, and claim in and to any accounts then or thereafter to become due and payable to the firm of Bibb & Hughes.

Certain creditors of Bibb & Hughes, on September 20, 1922, filed in the District Court of the United States for the Western District of Texas at Waco a petition containing the necessary averments, and praying that the firm of Bibb & Hughes and the members thereof individually be adjudged bankrupts. On November 24, 1922, said W. S. Bibb, Jr., individually was adjudged a bankrupt, and later, on February 28, 1923, Joe D. Hughes and the firm of Bibb & Hughes were adjudged not to be bankrupts. Bibb on December 12, 1922, filed his schedules of assets and liabilities. He listed debts which he classed as individual, amounting to $22,314, and debts which he classed as firm obligations in the sum of $364,468. He included in his list of firm debts the judgment recovered by Hill county on January 9, 1922, as hereinbefore set out. These schedules are not copied in the statement of facts, and it is impossible from the excerpts therefrom so copied to make an accurate statement of the assets listed. It is sufficient to say that the bankrupt listed a comparatively small amount of property presumably classed by him as individual. In addition thereto, he listed claims against Hill county and road material stated to be in possession of said county, amounting to approximately $110,000, which he classed as firm assets, and in which he claimed only a half interest. All these claims were denied and defeated by Hill county in other and separate suits except the several sums adjudged to creditors in this suit, amounting to $20,723.11, and the sum of $7,620.62 adjudged to Hill county as a set-off herein. The total claims proved as individual debts of the bankrupt amounted to $15,007.69, and the total claims proved as debts of the firm of Bibb & Hughes amounted to $98,685.24. After deducting all claims paid by the trustee or settled by moneys adjudged to creditors in this suit, there remained unpaid after entry of the judgment herein claims classed as individual, amounting to $9,964.29, and claims classed as firm debts, amounting to $77,378.71. The trustee had in his hands at that time in cash approximately $4,600.

The evidence does not show when the work under the contract of November 22, 1920, hereinbefore referred to, was performed. More than a year had elapsed after the date of said contract when the firm of Bibb & Hughes was dissolved. The commissioners' court of Hill county, on October 12, 1922, entered an order declaring that the claim of Bibb & Hughes for the amount earned by them under said contract came on for consideration on that day, and that said claim in the sum of $7,620.62, the same being for retainage under said contract, had been duly approved by the engineer, and directing that the same be applied as a credit on the judgment recovered by it against W. S. Bibb, Jr., et al., in said suit in Ellis county as hereinbefore set out, and that said amount be charged against the interest of road district No. 7 in said judgment.

This suit was filed on July _____, 1923, by Harry R. Clark against Hill county, its several road districts, and others, including the American Surety Company, to recover certain moneys which he alleged were due him as a subcontractor under Bibb & Hughes for work done for and material furnished to Hill county on its said roads. Hill county made appellant, as trustee of the estate of W. S. Bibb, Jr., bankrupt, a party to the suit. He answered therein and also filed a petition of intervention, asking affirmative relief. Various other similar suits were filed by divers and sundry parties, and all said suits were finally consolidated and tried together. A more detailed statement with reference to the parties thereto and the issues involved therein cannot be given because none of the pleadings therein are copied in this transcript. The judgment of the court shows that the case came on for hearing on the 26th of July, 1926; that all the parties to the suit agreed that Hill county should pay into the registry of the court the sum of $20,723.11 in full of all its obligations on the several claims set up by the plaintiffs and interveners except the said sum of $7,620.62 involved in this appeal, which sum was not claimed by any of the parties to the suit except appellant Patten; that the said sum so paid into the registry of the court be disbursed by the clerk to the several parties named in said agreement in the amounts allotted to each, respectively; that judgment was entered in accordance with said agreement and said sum paid into the registry of the court by Hill county so disbursed by the clerk. Said judgment declared that the same disposed of all the parties and issues involved in this suit except the claim of appellant Patten, as trustee in bankruptcy, against Hill county, its road districts, and the American Surety Company for said sum of $7,620.62, and that the cause was held open for adjudication of that issue between said parties and for that purpose alone. It was further adjudged therein that neither Joe D. Hughes nor Morris D. Meyer, trustee in bankruptcy of the...