Thurber Const. Co. v. Kemplin

• Decision Date: 23 January 1935
• Docket Number: No. 8060.,8060.
• Citation: 81 S.W.2d 103
• Parties: THURBER CONST. CO. et al. v. KEMPLIN et al.
• Court: Texas Court of Appeals

81 S.W.2d 103

THURBER CONST. CO. et al. v. KEMPLIN et al.

No. 8060.

Court of Civil Appeals of Texas. Austin.

January 23, 1935.

Rehearing Denied March 27, 1935.

COPYRIGHT MATERIAL OMITTED

Appeal from District Court, Travis County; J. D. Moore, Judge.

Suit by John Kemplin, the F. C. Crane Company, and others against D. H. Purvis & Son and others, wherein the Thurber Construction Company and others intervened. From an adverse judgment, named intervener and last-named plaintiff appeal.

Reversed and remanded.

John Hancock, Clarence Wightman, and Eugene T. Adair, all of Fort Worth, for appellant Thurber Const. Co.

W. B. Handley and C. J. Shaeffer, both of Dallas, for appellant F. C. Crane Co.

Cofer & Cofer, of Austin, and Murphy & Murphy, of Gainesville, for appellees.

BAUGH, Justice.

This suit involves the proper distribution of funds retained by the state highway commission under a contract dated April 23, 1931, by it with D. H. Purvis & Son, for the construction of state highway No. 5, from Gainesville, Tex., to the Grayson county line. Purvis & Son subcontracted the construction of said project to Abe Anderson & Son, who in turn subcontracted same to L. G. Owen and D. H. Seigler. In October, 1931, after the work contracted for had been about 75 per cent. completed, these parties became unable to continue said work, and Purvis & Son forfeited said subcontracts except as to D. H. Seigler, who had not defaulted; and on November 25, 1931, entered into the following contract with appellant, Thurber Construction Company:

"State of Texas, County of Tarrant.

"Know All Men by These Presents:

"That, we D. H. Purvis & Son, of Fort Worth, Texas, herein called First Party, and Thurber Construction Company, a corporation, also of Fort Worth, Texas, herein called Second Party, have this day entered into the following contract and agreement, to-wit:

"1. First Party, as general contractor under the State of Texas, agrees to sublet to Second Party, as subcontractor, all unfinished work, except as noted below in paragraph No. 2, on Job S. P. No. 477-D and Job F. A. P. No. 539-D, in Cook County, Texas, as represented by original contracts from the State Highway Department of the State of Texas to D. H. Purvis & Son, dated the 23rd of April, A. D. 1931, to which original contracts reference is hereby made and the same are adopted as representing the conditions, terms and specifications between the parties hereto for the completion of the unfinished work by Second Party, except as to the time limit contained therein.

"2. Second Party agrees to complete all unfinished work and furnish all labor and material incident thereto, except, that portion of the said work heretofore sublet by Abe Anderson & Sons to Dave Seigler, and which portion of said work the said Seigler is now actually in process of completion. Said Seigler is not to be disturbed in his subcontract by the Second Party, but is to be permitted to complete the same in accordance with his subcontract under the said Abe Anderson & Sons.

"3. The said Second Party agrees to commence the work hereunder on or before the 30th day of November, A. D., 1931, and complete the same in accordance with the specifications therefor within sixty (60) working days.

"4. The Second Party shall receive as its compensation for the work done and material furnished hereunder in the completion of the said work, the same prices which the said contracts between the State Highway Department and the said Purvis specifies to be paid to the said Purvis by the said Highway Department, provided, however, that should said Second Party's cost exceed the final amount to be received under State Highway Department's final estimate, then said First Party shall pay to the Second Party such amount as will reimburse it for its actual costs, such excess not to exceed fifteen per cent (15%) of total amount earned as shown by final estimate of State Highway Department. Payment is to be made to Second Party within sixty (60) days after the completion and acceptance by State Highway Department of said work.

"5. The said First Party guarantees the payment of amounts payable to said Second Party hereunder and agrees to indemnify said Second Party for any claims filed covering labor, material, equipment purchases and rentals, and for any damage or anticipated profits on the part of any prior contractor or his subcontractor on said work, and against loss from delay due to any court proceedings instituted by or against First Party in reference to former sub-contracts on said work, and will furnish Second Party a good and solvent surety company bond guaranteeing the performance of this contract by First Party.

"Witness our hands, at Fort Worth, Texas, this the 25th day of November, A. D. 1931."

Thurber Construction Company fully performed its contract at its own expense, and the completed highway was accepted by the highway commission on August 2, 1932. Numerous claims were filed with the highway commission by those furnishing labor, materials, etc., to subcontractors Anderson & Son, and to L. G. Owen, for which they had not been paid, and by D. H. Seigler, who had fully performed his subcontract. All of these claims, except perhaps a part of that of Seigler, had accrued to the claimants prior to the date of said contract made with appellant to complete the unfinished portion of said project, and represented labor and materials furnished to the subcontractors who had defaulted prior to November 25, 1931.

This suit was by said claimants either as plaintiffs or as interveners, some 77 in number, against Purvis & Son, Abe Anderson & Son, L. G. Owen, and the highway commission, to establish their claims, and have same declared a lien upon and paid out of the funds retained by the highway commission under its contract with Purvis & Son, and under the provisions of articles 5472a and 6674m, Vernon's Ann. Civ. St. The highway commissioner answered that it had funds retained by it in the sum of $15,016.53, which it tendered into the registry of the court to be paid out as the court should determine.

Appellant intervened, set up its contract of November 25, 1931, above quoted, alleged its complete performance thereof at an expense to it for labor, materials, etc., of $15,003.63, none of which amount had been paid to it by Purvis & Son; that its claim was for labor, materials, etc., furnished by it as subcontractor in the performance of its contract with Purvis & Son; and sought to have its claim adjudged to be prior to those of the other claimants and to be paid first out of the funds retained by the highway commission.

The case was tried to the court without a jury. Judgment was rendered establishing the claims of appellees in the aggregate sum of more than $17,000, denying to appellant any portion of the funds paid by the highway commission into the registry of the court, reducing F. C. Crane Company's claim from $1,846.25 to $586.25, allowing $2,000 as attorneys' fees to the attorneys for appellees to be taxed as costs, and ordering the remainder of said fund prorated amongst said claimants. From this judgment the Thurber Construction Company and F. C. Crane Company have appealed. Further facts will be stated in the discussion of the issues raised.

In findings of fact and conclusions of law the trial court found and concluded that under the contract above set forth Thurber Construction Company took over the original contract between Purvis & Son and the highway commission, agreed to complete said highway for the remainder of the original price due Purvis & Son thereunder, "became assignees of the said D. H. Purvis & Son and stand in the shoes of the original contractor * * * and that the said Thurber Construction Company, so standing in the position of the original contractor and as its assignee, is not entitled to share in said moneys with those who furnished labor and material." The court also concluded that under said contract with appellant "the claim of the latter to the moneys in the hands of the State Highway Commission was expressly made subject to the claims of those furnishing labor and material."

The first contention of appellant is that the court erred in concluding that said contract constituted an assignment by the original contractors of their contract with the highway commission. This contention, we think, must be sustained. The trial court's judgment denying to said appellant any right to participate in said fund was obviously based upon that conclusion, and not upon the insufficiency of its pleading of said account nor the insufficiency of its proof of same. It is not contended that the highway commission dealt with or considered Thurber Construction Company as assignee of said Purvis & Son contract, nor that any of the parties thereto so considered it. On the contrary, the evidence shows that the highway commission continued to deal with the original contractor until the final completion and acceptance of said project. The contract with Thurber Construction Company relates only to a portion of Purvis & Son's undertaking. The provision for compensation was obviously for the purpose of fixing the rate and amount of said compensation, and the contract did not alter the primary obligation of Purvis & Son and their surety to complete their contract with the state. Clearly, we think, Thurber Construction Company was not an assignee of Purvis & Son, but merely a subcontractor under them and nothing more. Republic Supply Co. v. Allen (Tex. Civ. App.) 262 S. W. 113; 60 C. J. 669; 2 Bouvier's Law Dictionary (3d Rev.) 3163; 4 Words & Phrases, Second Series, p. 725. That Purvis & Son were primarily obligated to pay Thurber Construction Company its compensation for the performance of its contract is clear. And, even if they had bound themselves to pay same out of the funds due or to become due them from the state, that would not constitute an assignment of such fund. Koenig v. Rio Bravo Oil Co. ...