Trinity Portland Cement Co. v. Lion Bonding & Surety Co.

• Court: Texas Supreme Court
• Writing for the Court: Kittrell
• Citation: Trinity Portland Cement Co. v. Lion Bonding & Surety Co., 229 S.W. 483 (Tex. 1921)
• Decision Date: 09 March 1921
• Docket Number: (No. 182-3218.)
• Parties: TRINITY PORTLAND CEMENT CO. v. LION BONDING & SURETY CO.

Page 483

229 S.W. 483

TRINITY PORTLAND CEMENT CO. v. LION BONDING & SURETY CO.

(No. 182-3218.)

Commission of Appeals of Texas, Section B.

March 9, 1921.

Error to Court of Civil Appeals of Third Supreme Judicial District.

Suit by the Trussed Concrete Steel Company of Texas and others against the Hess & Skinner Engineering Company and the Lion Bonding & Surety Company, in which the Trinity Portland Cement Company and another intervened. Judgment for plaintiffs and interveners was reversed and rendered in part and affirmed in part by Court of Civil Appeals (204 S. W. 1176), and the named intervener brings error. Judgment of Court of Civil Appeals reversed and judgment of district court affirmed.

Thompson, Knight, Baker & Harris, of Dallas, and Sam D. Ware, of Belton (Alex F. Weisberg, of Dallas, of counsel), for plaintiff in error.

A. B. Wilson, of Houston, and M. E. Monteith, of Belton, for defendant in error.

KITTRELL, J.

The briefest possible condensation of the record that is consistent with clearness reveals the following facts:

(1) That Hess & Skinner, a corporation, of Dallas, Tex., by an instrument bearing no date, so far as the record reveals, but which in the bond hereinafter referred to, is referred to and recited as having been executed May 20, 1914, contracted to build two certain bridges for the city of Belton across Nolan creek in said city, and the Lion Bonding & Surety Company became surety on the bond required by the city for the performance of the contract.

(2) The bridges were finished according to the contract, so far as the record shows, and there appears to have been no controversy between the city and the contractors, but the contractors left unpaid several materialmen. The Trussed Concrete Steel Company brought suit against the contractors and against the bonding company, and the Trinity Portland Cement Company and R. L. Henderson, receiver of the Peyton-Smith Hardware Company, intervened.

(3) On trial the plaintiff and interveners recovered judgment against Hess & Skinner Engineering Company respectively as follows: Plaintiffs in error for $1,944.67; Trinity Portland Cement Company, for $3,174.88; and R. L. Henderson, receiver, for $222.40.

It appears that some part of the material sold by each of the materialmen did not go into the bridges; hence the net judgment in favor of each for which amount judgment was rendered against the surety company, defendant in error, was as follows: That in favor of plaintiff in error, $1,644.67; Trinity Portland Cement Company, $2,384.78; R. L. Henderson, receiver, $155.55.

The case of defendant in error, as appellant in the Court of Civil Appeals, was based upon only one ground, viz. that, construing the contract and bond together, they did not create any obligation on the part of the defendant in error to the plaintiff in error or either of the interveners, or, to state the proposition in other words, neither the plaintiff nor either of the interveners could recover on the bond.

This contention was sustained by the Court of Civil Appeals, and the judgment of the district court was reversed, and judgment rendered for the bonding company, defendant in error.

The holding of the Court of Civil Appeals, as stated in the syllabus in 204 S. W. 1176, is as follows:

"Despite Vernon's Sayles' Ann. Civ. St. 1914, arts. 6394f and 6394j, where bridge contractors' bond was conditioned on completion according to specifications and delivery to the city free from all liens, which completion was had and delivery free from liens made to city because no one can have a lien on public works, surety was not liable to materialmen; `liens' having its usual signification, and not meaning claims."

Opinion.

It is obvious from what has been said that the sole question for our determination is whether or not under the terms of the bond its provisions inured to the benefit of and protected those in whose favor the trial court rendered judgment.

The paragraphs and provisions of the contract between the city of Belton and the contractors which are necessary to be considered in arriving at a decision follow the recital that the contractors agreed for $21,000 to build two certain concrete bridges, and read as follows:

"Said contractor agrees to execute a good and sufficient bond, acceptable by the said city conditioned upon the faithful performance of this contract by the said contractor, said bond to be in the sum of twenty-one thousand ($21,000) dollars, payable to Neal Bassel, mayor of Belton, Texas. * * *

"The said contractor shall so execute the bond for faithful performance of this contract as to also cover guaranty that all labor and materialmen liens shall be paid by the said contractor, and, if requested by the said city, the contractor shall make affidavit that all labor and material had been paid for."

The bond was given May 23, 1914, and the recitals thereof which are necessary to be set forth are as follows:

"Whereas said principal has entered into a certain written contract, a copy of which is hereto attached and made a part thereof, bearing date the 20th day of May, 1914, for the construction and completion of two reinforced concrete bridges in the city of Belton, Tex.: Now, therefore, the condition of the foregoing is such that, if the said principal shall well, truly, and faithfully comply with all the terms, covenants, and conditions of the said contract on said principal's part to be kept and performed according to the tenor thereof, then this obligation is to be null and void; otherwise to be and remain in full force and virtue in law."

Article 6394f, V. S. R. S., provides in substance that every contractor on any kind of public work shall be required before beginning such work to execute the "usual (italics ours) penal bond" with the additional (italics ours) obligation that such contractor or contractors shall promptly make payment to all persons supplying him or them with labor and material in the prosecution of the work, etc., and every such person is given the right to intervene in any suit brought on the bond and have his rights adjudicated. This statute was by conclusive implication of law read into the bond. Authorities post.

Having thus before us the contract between the city and the contractors, the bond upon which the defendant in error became surety, and of which the contract was made a part, and the statute relating to bonds when the work is of a public nature, it is next logically in order to construe and interpret the contract of suretyship.

The principles and rules of law applicable to the construction of contracts are so elementary and so familiar to the profession that it is unnecessary to set them forth. It is sufficient to say that all parties in any wise connected with the contract were presumed to know the law, and that the instruments above quoted from must be construed together, and be construed also in connection with the statute above cited, which by conclusive implication of law was written into the contract, and became as much a part of the bond as though it were expressed therein, and the bond must be read and understood in the light of it. Ruling Case Law, vol. 6, § 243, p. 855; Cyc. vol. 9, p. 582; Hamburg, etc., v. Garlington, 66 Tex. 103, 18 S. W. 337, 59 Am. Rep. 613; Kerr v. Galloway, 94 Tex. 641, 64 S. W. 858; U. S. v. Quincy, 71 U. S. (4 Wall.) 549, 18 L. Ed. 403; Snider v. Green, 51 Ind. App. 348, 96 N. E. 960; Rice v. Dwight, 2 Cush. (Mass.) 80; U. S. v. McDowell (D. C.) 21 Fed. 563; State v. Wotring, 56 W. Va. 394, 49 S. E. 365. This is true where the question arising for decision involves the right of principal and surety. U. S. F. & G. Co. v. Fultz, 76 Ark. 410, 89 S. W. 93.

"When an agreement is silent or obscure as to a particular subject, the law and usage become a portion of it and constitute a supplement to it and interpret it." Cyc. vol. 5, pp. 754, 755.

The Court of Civil Appeals laid what we conceive to be undue stress on the word "liens," and the following expression of the consensus of judicial opinion is peculiarly applicable to the situation:

"Where it is clear that a word has been written into an instrument inadvertently, and it is clearly inconsistent with, and repugnant to the meaning of the parties, as shown by the whole instrument, it will be treated as surplusage and rejected altogether." Cyc. vol. 9, pp. 580, 584, 585.

In construing the contract of surety-ship, we are authorized to take judicial knowledge of the fact that the statute above cited was enacted in order to protect those who labor on public works or furnish materials to the contractors, who in many instances were left unpaid, and the bond given by the contractors did not inure to their benefit.

We will assume what obviously must have been true, viz. that the contractors went to the bonding company to procure it to make the bond which they had contracted to give.

The company in the usual order, and as a...