Court Opinion

ID: 9776757
Source: CourtListenerOpinion
Date Created: 2023-08-29 19:43:59.889859+00
Date Added: 2024-06-11T07:32:42.297893
License: Public Domain

KEITH, Justice
(concurring).
While I concur in the affirmation of the case, I do so upon grounds slightly different from those advanced by Chief Justice Dies. Just as does my dissenting brother, I will confine my remarks to the “retained percentage” of the two contracts.
The contracts provided that City would deduct two percent of the monthly estimates of the value of the work performed by the Contractor during each month “as an agreed amount to be retained by said City as security that the work described herein will be completed in accordance with this agreement and the plans and specifications attached hereto.” It further provided that “[w]hen the work provided for herein shall have been completed by said Contractor,” the retainage would be paid to the Contractor.
Aetna received the retained percentages from City because it was subrogated to all of City’s rights, not by virtue of any assignment from Contractor. Aetna, not the Contractor, completed the work. We do not have a question of priority involved. The Bank’s assignment was valid so long, and only so long, as Contractor complied with the terms of his contract with City. Upon default, he forfeited his rights to any sums of money in City’s hands which were then, according to the contract, to be applied to the completion of the contracted job. Had any sums remained after completion, Bank’s assignment would have been effective. As is usual in such a case, the surety took a substantial loss and Bank’s assignment was worthless.
In Travelers Indemnity Co. v. Snyder National Bank, 361 S.W.2d 926, 928-929 (Tex.Civ.App., Eastland, 1962, error ref. n.r.e.), it was held that since the contractor defaulted and the costs of completion were not paid by him, he was not entitled to the retainages. The court then made two significant holdings: (1) “The bank had no greater right to the disputed funds than Chastain [contractor] had.” (2) “Chastain could not have recovered because when he defaulted no money was due him. The bank stood in the shoes of Chastain under their assignment.” So it is here.
*309Although Art. 260-1 was not involved in the case of Trinity Universal Ins. Co. v. Bellmead State Bank, 396 S.W.2d 163, 168 (Tex.Civ.App., Dallas, 1965, error ref. n.r. e.), the portion of the opinion dealing with subrogation (syllabi 3 and 4) and the authorities therein discussed are applicable to the case at bar. The rule so announced is that generally prevailing throughout the nation. See annotations in 45 A.L.R. 380 (1926); 134 A.L.R. 738 (1941); and 164 A.L.R. 613 (1946).
Nor do I have any difficulty harmonizing the 1957 amendment to repeal Art. 260-1* with Art. 5160, § E. Before the 1957 amendment, the statute specifically provided that the word “account” should not include any sums of money accruing to a contractor for labor or material furnished on a construction contract where the contractor had furnished a performance bond. This was a statutory prohibition against assignment of such accounts and effectively prevented banks from engaging in interim financing in such area. The 1957 amendment made a change so as to include moneys accruing to such a contractor in the definition of “account”, if the assignee took the necessary steps to record the assignment.
Thus, the 1957 amendment made it possible for Deer Park Bank to have a valid assignment from Contractor in this case— and to receive more than $50,000 from City upon Contractor’s estimates before default. The amendment, however, did not say or infer that an owner should or must pay a defaulting contractor’s assignee any sum of money to which the contractor himself was not entitled and could not recover from the owner.
Bank’s reliance upon the Transamerica Case, cited in the majority opinion (405 S. W.2d 66), is misplaced. The Austin Court did not employ Art. 260-1 to create any rights or property interest in the assignee that were not vested in the assignor. The Court merely held that the prior protected assignment of funds then due the contractor was valid and that the assignee was entitled thereto. In our case, there is no stipulation of any amount “due” or “payable” to the Contractor. On the contrary, the entire record in the case before us supports the trial court’s finding that there were no sums due and payable to the Contractor at the time he walked off the job. A similar holding is to be found in Town of River Junction v. Maryland Casualty Co., (5th Cir. 1940) 110 F.2d 278, 281, interpreting the laws of Florida.
The University Bank Case (431 S.W.2d 561), relied upon by the Bank here, bears no resemblance to the case at bar. It was an interpleader case and the bank’s assign- or was an unbonded subcontractor. Again, as in Transamerica, sums were due the subcontractor for extra work agreed upon. The only surety in the case was the general contractor’s surety which sustained no loss and claimed no part of the fund inter-pleaded. University has no application here.
The case being tried upon an agreed statement of facts, we are without power to draw any inference, or find any facts, not embraced in the agreement. Hutcherson v. Sovereign Camp. W.O.W, 112 Tex. 551, 251 S.W. 491, 492 (1923); White v. State, 329 S.W.2d 446, 449 (Tex.Civ.App., Dallas, 1959, error ref. n.r.e); Shoppers World, Inc. v. State, 373 S.W.2d 374, 375 [Tex.Civ.App., San Antonio 1963; affirmed, 380 S.W.2d 107 (Tex.1964)]. The only inference which the trial court could have drawn from such stipulation was that there was no money due and payable to the contractor when he defaulted; thus, Transamerica is inapposite.
Under the prevailing case law in this state, the surety and not the assignee bank became entitled to the retained percentages. *310Hess & Skinner Engineering Co. v. Turney, 110 Tex. 148, 216 S.W. 621, 623 (1919); Employers’ Casualty Co. v. Rockwall County, 120 Tex. 441, 35 S.W.2d 690, 692 (1931); Trinity Universal Ins. Co. v. Bellmead State Bank, supra (396 S.W.2d at 168); and Trinity Universal Insurance Company v. United States (5th Cir. 1967) 382 F.2d 317, 321.
The judgment of the trial court was correct and I join in the affirmation thereof.

 According to “Disposition Table 1,” Vernon’s Business & Commerce Code, p. XVII (1968), § 6 of Art. 260-1 now appears in §§ 9.201, 9.302, 9.306, and 9.318 of the Bus. & Comm.Code.