Texas Fidelity & Bonding Co. v. Rosenberg Independent School Dist.

• Decision Date: 21 June 1917
• Citation: 196 S.W. 366
• Parties: TEXAS FIDELITY & BONDING CO. v. ROSENBERG INDEPENDENT SCHOOL DIST. et al.
• Court: Texas Court of Appeals

196 S.W. 366

TEXAS FIDELITY & BONDING CO. v. ROSENBERG INDEPENDENT SCHOOL DIST. et al.

Court of Civil Appeals of Texas. Galveston.

June 21, 1917.

Appeal from District Court, Ft. Bend County.

On motion for rehearing. Overruled.

For original opinion, see 195 S. W. 298.

GRAVES, J.

In the original opinion (195 S. W. 298) it was inadvertently stated that the school district, in paying the accounts of $530.79 for labor and of $1,764.51 for materials, took from the holders assignments of both items; whereas, the record shows that the latter, but not the former, account was so assigned. That finding is, accordingly, corrected.

In the motion for rehearing it is very earnestly insisted that:

"This court erred in holding that the contract and bond under consideration should not be construed strictly in favor of the surety, for the reason that such holding and finding of the court is contrary to the decision of the Supreme Court in the case of Lonergan v. San Antonio Trust Co., 101 Tex. 76, 104 S. W. 1061 [106 S. W. 876, 22 L. R. A. (N. S.) 364, 130 Am. St. Rep. 803], and the previous decision of this court in the case of Insurance Co. v. Waples Lumber Company, 176 S. W. 651."

An examination of those cases, however, will not uphold this contention. In the first place, in neither of these cases was it shown that the surety company involved was chartered under the laws of Texas, as was the bonding company in the case at bar; indeed, in the Lonergan Case it affirmatively appeared that the American Surety Company was a New York corporation, while in the Waples Lumber Company Case there is no showing as to where the bonding and casualty insurance company was organized. In the latter case there was but a single question determined, stated by the court to be as follows:

"The only questions presented for our determination are whether the bond inured to the benefit of the plaintiff Waples Lumber Company and other materialmen, whose claims plaintiff holds, and whether it could be enforced by the plaintiff or Breath and wife, as trustees, for its use."

After finding as a fact that the bond there under consideration contained no provisions evidencing an undertaking to become liable to the materialmen, the court decided that sole question in this language:

"It is the well-established law of this state that a building contractor's bond, conditioned as in the instant case, is simply an expression of a condition upon which the liability of the surety to the owners is defined, and for a breach of which the surety will be liable to the owner only, and does not inure to the benefit of materialmen, in the absence of a provision evidencing such an undertaking. The bond, then, being an indemnity bond to W. F. Breath and wife, does not give a right of action to the plaintiff, as a materialman, against the surety on the bond. It follows from this that the materialman, not having any right of recovery on the bond in his own behalf, cannot recover through the obligees as trustees."

Surely that decision, based as it was upon a wholly different state of facts, in that the bond...