Southern Surety Co. v. Bering Mfg. Co.

• Decision Date: 08 March 1927
• Docket Number: (No. 8855.)
• Citation: 295 S.W. 337
• Parties: SOUTHERN SURETY CO. v. BERING MFG. CO. et al.
• Court: Texas Court of Appeals

295 S.W. 337

SOUTHERN SURETY CO. v. BERING MFG. CO. et al.

(No. 8855.)

Court of Civil Appeals of Texas. Galveston.

March 8, 1927.

Rehearing Withdrawn at Request of Maker May 5, 1927.

Error from District Court, Harris County; W. E. Monteith, Judge.

Suit by the South Texas Lumber Company against Andrew Ness, in which plaintiff sued out writ of garnishment against the Houston Press Company, and in which the Bering Manufacturing Company, the Southern Surety Company, and others intervened. To review the judgment, the interveners named bring separate writs of error. Proceedings consolidated. Affirmed in part; reversed and rendered in part.

King, Battaile & Sonfield, of Houston, for plaintiff in error.

Bryan, Colgin, Suhr & Bering, of Houston, for defendant in error Bering Mfg. Co.

Huggins, Kayser & Liddell, of Houston, for defendant in error Jones Lumber Co.

PLEASANTS, C. J.

This litigation was begun by a suit brought by the South Texas Lumber Company against Andrew Ness to recover the sum of $1,609.80 alleged to be due upon an account for lumber and other building materials sold and delivered by plaintiff to defendant.

After the suit was filed, plaintiff therein sued out a writ of garnishment against the Houston Press Company, a private corporation domiciled in the city of Houston.

The Houston Press Company answered the writ and acknowledged an indebtedness to the defendant of $2,413.91, which it tendered into court. Thereafter the Bering Manufacturing Company, and a number of other parties having claims against the defendant Ness, intervened in the suit and asserted liens upon the fund deposited in the registry of the court by the Houston Press Company.

Such further statement of the allegations of these petitions in intervention and other pleadings in the case as may be necessary in the elucidation of the questions presented by this appeal will be hereafter made.

The petition in intervention of appellant Southern Surety Company alleges, in substance:

That on or about the 13th day of July, 1923, as surety for Andrew Ness, it executed a bond in favor of the Houston Press Company, whereby it became bound and obligated to indemnify and save harmless the Houston Press Company against any pecuniary loss resulting to said company from the breach of a contract executed by Andrew Ness for the construction of a building for the company. That, in consideration of the execution by it of the bond, Andrew Ness executed and delivered to it an instrument containing the following agreement and assignment:

"And for the better protection of said company, and as collateral security hereto, and for all claims of said surety against the undersigned, we, the undersigned, do, by these presents, as of the date hereof, hereby assign, transfer, and convey to the said company, all the right, title, and interest of the undersigned in and to all the tools, plant, equipment, and materials of every nature and description that we may now or hereafter have upon said work, or in, on, or about the site thereof, including as well materials purchased for or chargeable to said contract which may be in process of construction, in storage elsewhere, or in transportation to said site. And also we, the undersigned, do hereby convey and assign unto the said company any and all payments, funds, moneys, or property due or to become due to the undersigned as provided in said contract, and also all of our rights in and to all subcontracts which may have been or may hereafter be entered into, and the materials embraced therein."

That Andrew Ness completed the building in accordance with his contract with the Houston Press Company, and the building has been received and accepted by said company.

It is further alleged, in substance, that Andrew Ness is insolvent, and that he is indebted to the intervener surety company in a sum exceeding the sum paid into the registry of the court by the Houston Press Company. The prayer of the petition is that the claim upon the fund of all of the other interveners be denied and such fund be adjudged to petitioner.

In addition to its claim of lien upon the fund, the Bering Manufacturing Company pleaded an assignment by Ness on July 20, 1923, of $936 of the fund, and a further assignment in October, 1923, of $1,034.96 of said fund, which second amount assigned included the previous assigned amount of $936, and further asserted a lien upon the building and lot of the Houston Press Company to secure the amount due for material furnished the contractor and used in the construction of the building.

The Balkamp Lumber Company, another of the interveners, in addition to its claim of lien upon the fund, claimed an assignment thereof by Ness, on December 6, 1923, to satisfy its claim of $760.08.

The trial in the court below without a jury resulted in a judgment denying appellant surety company any right or interest in the fund, and apportioning the fund between the other interveners. The judgment also denied any recovery by any of the interveners against the Houston Press Company. From this judgment the Southern Surety Company and the Bering Manufacturing Company perfected separate appeals which, upon motion of the parties, have been consolidated, and will be considered and disposed of as one case.

The evidence shows that Andrew Ness on July 13, 1923, entered into a contract with the Houston Press Company for the construction of improvements upon a building owned by said company and situated on Capitol avenue in the city of Houston. At the time this contract was executed and delivered, the contractor delivered to the press company a bond executed by the Southern Surety Company to protect the press company from loss caused by the failure of the contractor to perform the obligations of his contract. The condition of the bond is as follows:

"Now, therefore, the condition of the foregoing obligation is such that, if the said principal shall well and truly indemnify and save harmless the said obligee from any pecuniary loss resulting from the breach of any of the terms, covenants, and conditions of the said contract on the part of said principal to be performed, then this obligation shall be void; otherwise to remain in full force and effect in law; provided, however, that this bond is issued subject to the following conditions and provisions."

The application for this bond made by the contractor, and upon which the bond was executed, contains the agreement and assignment pleaded by appellant surety company, before set out. At the time this assignment was made, Ness was indebted to the surety company in the sum of $1,550, and the company was surety for him upon another building contract upon which default had been made and for which the company was liable and was compelled to pay, prior to the trial in the court below, the sum of $1,609.81. Ness was insolvent at the time of the trial. Ness completed his contract of July 13, 1923, with the press company on October 18, 1923. An additional contract for extras on the building was entered into by the parties, under which the trial court finds that the intervener Jones Lumber Company furnished $372.20 worth of material that went into the building after October 18, 1923, the Bering Manufacturing Company $6 worth, and intervener K. W. Hille, $56 worth. The date of the completion of the contract for these extras is not shown, but the trial court finds that none of the interveners had filed their claims or taken any action to fix a lien upon the building to secure the payment of their claims.

When the original contract was completed on October 18, 1923, in order to obtain a payment of $6,000 from the press company on his contract, the contractor Ness got the Bering Manufacturing Company, the Balkamp Company, and several of the other interveners herein to execute the following release, which was delivered to the press company:

"We hereby release the Houston Press Company, Inc., from all claims for labor and material furnished by us on their office building located at 405 Capitol avenue, Houston, Tex., and hold Andrew Ness and Southern Surety Company for all claims."

In order to obtain this release, Ness promised the interveners who executed it that he would pay them out of the money received by him from the press company, but failed to make such payment.

When the contractor sought to purchase material for the building from the ...