Court Opinion

ID: 4138451
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:36:33.027179+00
Date Added: 2024-06-11T14:37:12.511109
License: Public Domain

Xoh. T, B. Warden, Me&r
           State Board of Control
          .Austin, Texas                      Ilo:     Whether the Board of
                              "'                     6 Control is authorized
                                                       under Artiols 5160,
    :                                                  v. c. so, to aooept a
                                   .'~ .(              payment bona in lieu
                                                       of wsatisraotorgevi-
                                                       denoe" that all bills
                                                       for labor and materials
                                                     " fuaished the oontno-
                                                       tor.have been paid+
    '~ D&r      Sir:
                        The basis of your request ?or an'epinion is an
           Interpretation     of the last paragraph of Article 5160,
        ~’ T. 0, 9.) whioh proridsa as follons:.             :.
             '
         .'             vroviaea    rurther thst arter oomple-
:                tlon and aooeptsnca of completed       project
                 all moneys due.contractorunder da            con-
                 track shall be hold by the State or its
                 ocuntles or school dlstrlote or other sub-
                 division thereof or any municipalityun-
                 til such a time that satisfaotoryevidence
                 is submitted and affidavits made by the
                 oontractor thst all just bills for labor
                 an% material under this contract haa been
                 paid
                 ..     in rull by the oontmo$or~”
                                                         .
         :...,          Acoordia to your letter, you construe the pro-
          vision for "satisfactoryevidencea to require %ceiptea
          bills”    furnished by the oontraotorto show that the ma-
          terials and labor have been rully paid for. You further
          say that this interpretationresults in hardship upon
          numerous,contrsotorsbecause of their inability to iur-
          nish   receipted     bills for every item pur0bssea     and whioh
          goeg into every project. You give as an example of the
          heraship rsrerrea to, the roilowing       set   cb facts:

                       WAcontractorpurohaaes and pays far
               a oar   load   of   cement.   The concretemade'
                                                     .
                                   .    .
     Hon. T. B. Warden, Page 2, V-321.

            from this oar load of cement &y go into
            as many projeots as there are sacks of
            oement in the car lead, and it would thers-
.           fore follow that the contractorwould be
            raqnimd to have as many reoeipts showin&
           'that the oar load of cement had been paid
            for. The efieot .otthis requirementhas
            0cluseamany competent contractorsto re-
           fuso to bid on any State project.*
               In oonnectionwith the above quoted statute
     and related feats, you ask two questions: (1) Whether
     it would be possibla to take a payment bona executed by
     a contractoras prinaipal ana a solvent surety company
     to.proteotlabor and material men after acceptance of
     the completed projeot. If the payment bona is possible
    you ask us to prepare the necessary form for such bond,
    ,(2)’ In the event the use of a payment bond is an im-
    possibility,what is the meaning of the term "satisfao-
    tory evidencan as used in the quoted part or the Arti-’
    0187

               We shall first determine whether in any case
     the Pinal payment of funds may be made to the oontmo-
     tor without his submitting satisfactoryevidence and
     his making affidavits that all past bills for labor and
    'materialunder the contraat hnve been paid in full by
    the oontmator.
               In addition to orrering proteotion to furnish-
    ers of labor and materials, this statute has been held
     in E&public National Bank & Trust Company v. Massaohu-
    setta Banking & Trust Company, 68 P (2%) k&5, and Frank-
    lin Broa. v. Standard Mfg. Company, 78 S. W. (26) 29&,
    error dismissed, to operate as additional security  for
    the surety on the performanoabond. In each oase the
    public body (being the State in the latter case) was
    held liable to the surety on the perrormanoabond for
    payments made by it on labor and material claims where
    final payment was made by the publio body to the con-
    tractor prior to the time allowed for filing such claims
    under  Artiole 5160 and without requiring the oontra'otor
    to furnish the required evidence and affidavits Of sat-
    isfaotion of suoh bills. It thereiore appears that the
    Board of Control would be acting at its and the State's
    peril in releasing the funds under any circumstances
    other than as authorized by Article 5160.   This it is
    not authorized to do. We do not mean to hold that a
    payment bona may not also be accepted; but we find no
 Hon. T. B. Warden, Page 3, V-321.

 authority to require it, nor to accept it in lieu of‘the
 requirementsof Article 5160.
           Since we have concludedthat a payment bond
 cannot be substituted for the prooedure under Artiale
 51.60,this brings us to your question as to the mean-
 ing of the term "satiafaotoryevidenoew as used in the
 quoted section of Article 5160. In Volume 1 of Jones
 Ccmmentarieson J8videnoe,pages 25 ana 26, wsatisfao-
 tory evidencew is aerinea as rollows:
          11
           . . D By satisraotoryevidence,whioh~
     is sometimes called suffioientevidsnoe, is
     intended that amount of prool.whioh ordinari-
     ly satisries an unprejudicedmind beyond rea-
     sonable doubt. The circumstanceswhich will
     amount to this degree of proof can never be.
     previously aarinea; the only legal test or
     which they are susceptibleis their suiii-
     oianoy to satisry the mind and conscience of
     a cOtmuonman; and so to convince him that he
     would venture to act upon that conviction,
     in matters oi the highest concern and impor-
     tanoe to his own interest e e .
          "That 8via8nce is deemed satisractory
     which ordinarilyproduces moral oertainty or
     conviotionin an unprejudicedtina . . ."
           While most of the authorities cited speak of
 "satisfactoryevidence" in connectionwith evidence in-
 troduced in litigation,nevertheless,the definitions
.are to our minds consistentwith the standard which
 should be applied by you in connectionwith your res-
 ponsibilitiesunder Article 5160. This same meaning
 has been expressed many times by the Courts. For a
 series of such delinitions,sea Words and Phrases, Vol*
 ume 38, page 266, et seq.
          The meaning of the term "satisfsctorysvi-
dence* is broad in its scope, and as stated "can never
be previously aerined,w It does not maan on8 specirio
kind 0r evidence as applied to a psrtioular situat%on;
it can mean other kinds of evidence -- any that "sat-
isfies an unprejudicedmind beyond reasonable doubt."
Applying these rules to the example stated in your let-
ter, "setisfaotoryevidanoe" as used in the statute can-
not be aOnrinad to a single constructionas "receipted
       E&n. T. B. Warden, Page Ic, V-321,

      ' bills." That is straining the rule -- rendering it too
        inflexibleto embrace such situationsas you have out-
        lined. This is not to say that receipted bills am not
        satisfaotoryevidence. It is, or should be in most in-
        stances. But where oiroumstanoesam different and un-
        usual, other evidenoe aould be just as desirable and
       work no hardship upon one who bears the burden of proof.
        The rule is not made to lax the requirements,but is
        laid down as a Klexible guide under which, with proper
       and reasonableapplication rendervarying circumstances,
        justice oan be obtained,
                 Under the two aeoisions first referred to here-
       in, the funds required to be held constitntea trust fund
       and the liability of the State arises upon a misapplica-
       tion of such funda, oontmry to the statute. since the
       term *satisieotoryeviaenoe* is not susceptibleof exaot
       aerinition,it necessarily follows that the Board or Con-
       trol must exercise sound discretion in each situation as
       it arises.

                 1. A payment bond executed by a oon-
            tractor operating under the provisions of
            Artiale 5160, V. C. S., msy not be 6Ocepted
            by the Board or Control in lieu of satisiao-
            tory aridence and affidavits that all just
            bills for labor and materials hsve been paid.
                 2.  *Satisfactoryevidence" of such pey-
            ment is such evidenos as convinoas the Boara
            of Control that the obligationsfor all labor
            ana material have been satisfied by the oon-
            tractor.
                                Yours very truly
      APPROVED:             ATTOBWBY GIIIWRALOF TEXAS

.:.   jz&      t&i?i?~;y        p-d.             Gzy+@J
      ATTORNEY GENRRAL.             Charles Bi Crenshaw
                                             Assistant.
      CRC:jmo