Court Opinion

ID: 9832985
Source: CourtListenerOpinion
Date Created: 2023-09-01 22:21:16.64424+00
Date Added: 2024-06-11T07:43:57.023170
License: Public Domain

On Motion for Rehearing.
In its motion for rehearing, the Fidelity & Deposit Company of Maryland has asserted that appellant, having purchased of Barnes, the contractor, the note and mechanic’s lien contract executed by appellees to Barnes, is a mere volunteer, as that term is used in subrogation cases, and hence is not in a position to claim the right of subro-gation. If the Fidelity Company be correct in its assumption that appellant i® a mere volunteer, then the legal conclusion it draws must be allowed. However, is appellant a mere volunteer? The undisputed evidence is that, at the time the contract was entered into between appellees and Barnes, it was known that Barnes would have to be financed in the undertáking from some source, and the conclusion necessarily follows that the note and mechanic’s lien must form the basis for securing the necessary credit therefor. Before any sum of money was expended on the contract, the note and mechanic’s lien were transferred to appellant for the consideration of the furnishing the material and money necessary for Barnes to construct the building. Without this aid, the work of cpnstruction could not have been started. From this the conclusion necessarily follows that' appellant was not a mere volunteer, but that its financing Barnes was an essential and a contemplated part of the undertaking. Miller v. Guaranty Trust & Banking Co. et al. (Tex. Civ App.) 207 S. W. 642; Fievel v. Zuber, 67 Tex. 275, 3 S. W. 273.
When the Fidelity Company .executed the indemnity bond, its local manager must have known that Barnes had to be financed in his undertaking, because of the fact that the owners of the building were to pay no part of the consideration until there was a completed structure, and that the bond it was executing would become a necessary element in procuring the money to complete the contract it was guaranteeing. It is inconceivable that, without a bond guaranteeing performance by Barnes, with the mechanic’s lien contract allowing the owners of the building to charge the note they had executed with any excess price in the cost of construction, any business institution would finance the contractor on the security alone of the note and mechanic’s lien. The evidence of appellant’s manager warrants the conclusion that it would not have financed Barnes but for the indemnity bond. This-motion for rehearing is overruled.
Appellees, in their motion for rehearing,, point out an error of statement in regard to' the filing of certain cross-assignments of error in the lower court. In the view taken of’ the ease, this error was immaterial, but the erroneous statement has been corrected in the original opinion. This motion for rehearing is also overruled.