
    No. 7421-7516.
    SAVINGS & HOMESTEAD ASS'N VS AUGUST FRANK ET AL.
    STATE OF LOUISIANA COURT OF APPEAL PARISH OF ORLEANS.
   OPINION.

Bji his Honor John st. Paul.

Shis is a proceeding in ooftourao arising out of a building oontraot. Sha details seem complicated, hut onoe analysed they appear alapl* enough.

On Sept 2nd 1916 August Prank, a builder, contracted, with Sr. Shas H. Gibbons, as owner, to oonstruot a building for $6020, payable in five eqpal instalments. She owner, however, was to furnish all the lumber except the oak floors and the mill work.

Share was extra work done amounting to $162, and the owner was allowed a oredit of $220. for a slate roof omitted; thus leaving a total gross oontraot prioe of $2962.

During the first part of the work Dr. Gibbons paid for' advanced) to the oontraotor in oash $600. to carry on the work. On December 6rd, the contractor received $9D8. through Martin Hanlon, a Kotary Public, and on July 6rd 1916 a further sum of $604. through the same Notary. These were all the payments ever received by the contractor, aggregating a total of $1812, leaving Gibbons still indebted to him for a balance amounting to $1140.

But as there has been deposited^ sum of $940, which as between chemaelves we think belongs to Gibbons rather than to the contractor, we believe that if Gibbons be made to pay an additional $200, the oontraotor will have been paid all that possibly oan be due him. In, fact the thing is self evident; $1812 plus $94Q. plus equals $2962, being the full oontraot price as above stated*

In addition to this Gibbons has not paid for the lumber which he bound himself to furnish. This amounts to $699.44; being rough lumber furnished by the W. W. Carre Co. amounting to $616,44, and- sningles famished by Geo. W. Erechter amounting to $66.60.

On the above mentioned oontract the National Surety Co became surety for the oontraotor.

11

On November 5th, 1915, when the building was about half finished» Gibbons found a purohaser, one Brand, who dealt through the plaintiff to Homestead Association which was finance# the deal for him.

for oonvenienoe the contractor entered that day into a new contract with tho Homestead by which he wasxto construct the building for $4700. payable in five equal instalments, and he was to furnish all the materials including' the rough lumber.

On. this contract Gibbons beoame surety for the contractor. But by a collateral agreement between the contractor and Gibbons it was understood that they were to prooeed under the first contract, and that as before Gibbons was to furnish the rough lumber; and the increase in price($1$80) was to go to Gibbons in consideration of the work'and materials to be furnished by him. Accordingly On November 10th 1915, Gibbons assigned the first, contract to the Homestead, to which the National Surety Co, as surety thereon, consented.

The Homestead made four payments of $940 each, or $3760 in all, through their Notary, Martin Manion; out of which the latter paid the contractor $908 plus $604, equal to $1512, and returned to Gibbons the $300 which he had advanced to the contractor during the work. Shat is to say the contractor received in this way the $1812 of which we have already spoken. The balance of these four payments went to Gibbons or was paid out for his account. .

The fifth payment of $940 was■deposited in court by the Homestead, thus completing the $4700 of the second Contract. This is the $940 of which we spoke before and which we said belonged rather to Gibbons than to. the contractor, since it is ¡clear that as between them the second contract was ### intended for Gibbons benefit and not for that of the Contractor, But this is not worth elaborating, since all that the contractor is entitled to receive is $2952, of which' $1812 was paid him in oash, $940 has been deposited in court, and Gibbons must pay $200 more to make up the amount.

in.

If Gibbons pays the contractor in full hy abandoning the $940 deposited in court by the Homestead and paying an additional $200 to complete the balance due {in all $1140) thu3 reducing by that sun the claims outstanding against the contractor, and in addition thereto carries out his obligation to furnish the rough lumber, by paying the Carre and Prechter bills, aggregating §599.04, then we fail to perceive on what principle of reason or equity the national Surety Co can hope to be released from liability for the further defaults of the contractor; since Gibbons on doing all this will have complied with' his obligation in full, and will himself be entitled to immunity from all further claims by virtue of the obligation undertaken'toward him by the national Surety Co. iJor can the latter complain, since'there is nothing in any act of his {if he comply with his obligations aforesaid) which can in the degree prejudice any right which the Surety Co has or might have had.

IV*.

The court below allowed fourteen claims admittedly due (Tr.p.83), being items 1. !5. 5. 7. 9. 10. 11. 12. IE. 14. 15. 16. X7 and 13 of the -judgment; in addition to irhich it allowed the claims of the Claiborne Avenue Sash Factory for §467.70 {Item 20) and G. Pitarter Sons for §26.20 {Item 2) both of which are no longer contested. It also allowed the claim of C. S. Hartwell Co for §50 (Item 18) and Tinited. Hardware Co for §77.51 {Item 8) which though 3till contested here, appear to us as being clearly due.

For all of these eighteen claims aggregating §2105.87 {interest and costs to be added, as per Stem 27} the court helow gave judgment in solido against the contractor, the Rational Surety Co {surety on the M^eeínd contract ■(?

So far this was correct; but the court failed to adjust the relations between the surety Co and Gibbons. This should havei# been done and we will do it later on.

V,

Mis till of VI. VI. Carre Co for rough lumber, amounting to ¿615«4* (Item 4) was allowed in sólido against the contractor, the national Surety-Co, and C. H. Gibbons. As the Contractor was not to fumlah the rough lumber under the first contract, it is clear that the national Surety Co, surety on that oontrapt alone, is not liable for this bills írank has nót appealed and we cannot concern ourselvep with his liability therefor. But as to Gibbons, we think he is liable.

It is true that the bill was charged and billed to one Globe Backing Co, now insolvent; but it was bought by Brant in consultation with Gibbons, and under some sort of agreement between them which is not made clear. Gibbons claims to have settled with Brand for the veins thereof, but Brand claims that though there was to have been a settlement between them at some time to determine which one owed the other, yet no such settlement was ever had. At any rate neither Brand nor Gibbons ever paid Carre or the Globe Backing Co.

Again- Gibbons was to furnish this lumber under both contracts*; ■ i<l4 . and although the setlmated Cost thereof was approximately only |800, he was allowed'by the contractor the whole difference between the ¿2020 due under the first contract and the ¿4700 paid by the Homestead under the second contract. In other words there was to accrue to him a profit of some ¿900 or more, even after paying the full price of the rough lumber. Of this profit however^ the contractor, the Homestead and Brand were all well aware, so that we have nothing to say thereon; that except that it is a oiroumstanee which tends to show^there must have been some understanding between' Gibbons and Brand, and -this-to corroborate the latter's statement that there were matters requiring adjustment between them, and as to which there has been as' yet no - settlement between them. .

And again in the second contract, Gibbons in his contract of suretyship, very distinctly bound himself "for the payment of all materials and labor already used and to be •■*. re after usefl on said building x x x by the said frank or any o'- er contractor .at workman engaged in the construction thereof", which terms are broad enough to cover the cost of any materials used in eai?. building hy whomsoever purchased, if not paid for by him.

And finally, both 'oy the order given by Frank to the Homs titead on January 12th, 1916 (Ir p. 70) and by Gibbons judicial admission in paragraph 8 of his supplemental answer, it i3 made olear that the difference of $1680 between the two contracts was to be paid over to Gibbons for the- express purpose of paying for the materials which he was to purchase.

Under the circumstances we think that Gibbons Bhould pay this bill; and we do not think that he has ehwon suoh settlement with Brand as would call fdr relief on grounds of Equity, to wit,that he would be paying it twicer.

in.

The Preohter claim for -J-6S.60 (item 5) is in-exactly the same category as the foregoing.

VII.

The judgment below (Item 2E) condemns the contractor, Gibbons, and the Surety Co for &50, attorneys fees, in favor of the Homestead Co. The- Surety-Co is not liable because no such fees are provided for anywhere in the first contract. Gibbons however is liable therefor because by the terms of his contract of suretyship, annexed to the second contract, he expressly agreed to pay them. (Frank, the contractor, has not appealed).

VIII.

The judgment belww (Item) 24) discharges the Homestead and cancels all the inscriptions and liens. This seems correct, since the Homestead has paid all that it owes; and moreover no materialmen have appealed, the only appellants herein being the Rational Surety Company and Dr. Chas li. Gibbons.

IZ.

We think the costs of these proceedings should be borne in equal portions by the Surety Co and Dr, C. I-I. Gibbons since this judgment is largely an adjustment of the> claims between these two parties, and sines each of them is also condemned severally for certain claims In favor of defferent parties.

X.

So recapitulate; we think all the materialmen should recover the amount of their claims from-one or the other of these two §ttt§§ appellants, and our decree is intended to have that result; that is to say;

Sr. Gibbons should pay the Carre claim #515.44; and the Srechter claim, #83.60. He should also pay the Homestead #60, attorneys fees; and besides this he should pay the further sum of $200 with legal interest from July 11th 1916, being the balance due by him to the contractor, he should also pay half the costa of these proceedings.

The Hntional Surety Co should pay the other eighteen claims aggregating #2196.87, and upon doing so (and paying all costs) should be allowed to withdraw from the registry of the court the #940 deposited by the Homestead and should further recover the sum of #200 from Gibbons to complete the amount due by him to the-contractor, and it should pay half the costs.

so Our decree will be framed as in substance and effect to accomplish just that result.

DECEBE.

*£■— It is- therefore ordered adjudged and decreed, that^the judgment appealed from, the paragraphs and items 1. 2. 3. 6. X. 8. 9. 10. 'll. 12. 13. 14. 16. 16. 17. 18. 19. and 20 be affirmed; with the added provision however, that if execution thereon or on any of them issue herein against C. ii. Gibbons, the said C. U. Gibbons shall thereupon be subrogated to the right of the claimant against the Eational Syrsty Co, and may in turn have execution issue for like emount against the said Eational Surety Co, with liberty to proceed by motion and rule herein to that effect.

It is further Ordered that paragraphs and items 4. 5. and 25 be amended by reversing, annulling and striking pit# therefrom any and all liability for said items on the part of the Eational Surety Co .and leaving the 3aid items and paragraphs as liabilities and judgments SGlel eolely against August Prank and OHas H3 Gibbons in solido; and as thus «mondod the said paragraphs -and Items are affirmed.

March 1919.

It .is further ordered that upon payment of the eighteen items mentioned in the first paragraph of this deoree, go nit, items one to twenty, both inclusive (exeppting items Pour and five) together with all the'costs of these proceedings, by the Rational Surety Co, the said Surety Company shall thereupon (and not before) be allowed to withdraw from the registry of the court the sum of $940, deposited therein by the plaintiff herein; and shall thereupon also have judgment against the said hr. C. K. Gibbons for the full sum of $200 ifwo hundred hollars) v/ith legal interest from July llth 1916 and one half of all oosts by it paid herein; save and except oosts of appeal; and leave to proceed herein by motion and rule for such judgment and for execution thereon against said Chas If. Gibbons.

It is further ordered that paragraph and item 22 be so amended that in calculating the limit of liability, of the national Surety Co (fixed at $1600) the oosts of these proceedings shall not be included, and that said limit of $1600 shall be taken to mean $1600 over and above the $940 to be withdrawn from the registry of the court and the $200 to he revovered from C. Is. Gibbons; and as thus amended the paragraph end item is affirmed.

^^It is further ordered that as to all other items, to wit, paragraphs 21. 23. 24. 26. and 27, the judgment is affirmed.

It is further ordered that the appellants herein each bear his own.costs of appeal, and that no account be taken thereof in the adjustment of costs between them.

Hew Orleans,' la  