125 Cal. 585 | Cal. | 1899
Dewar & Chisholm, as contractors, entered into a contract with the board of trustees of the Southern California State Asylum for the insane and inebriates, January 5, 1894, by which they agreed to perform the labor and furnish the material required for the carpenters’ and plasterers’ work of a ward building for the asylum, at an agreed price to be paid as follows, viz., ninety per cent of the value of the materials used
The customary mode of making these estimates was as follows: A certificate showing the labor performed and materials furnished by the contractors subsequent to the preceding one, together with their value, was prepared in the form of a bill of account in behalf of the contractors, with the approval of the superintendent of construction indorsed thereon, and was presented to the board of trustees for its allowance and order for payment. Upon the allowance and order for payment of this bill a warrant was drawn by the state controller in favor of the trustees for the payment of ninety per cent of its amount and delivered to them. In this manner the eighth estimate, amounting to $2,814.75, was presented to the board of trustees, and by that body allowed and ordered paid January 14, 1895, and a warrant for ninety per cent thereof, viz., $2,533.28, was drawn by the controller in favor of the trustees March 2d, and thereafter paid to the trustees. The ninth estimate, for $649.75, was presented and allowed February 11th, and a warrant for ninety per cent thereof, viz., $584.78 was drawn March 29th and paid to the trustees. March 18th the tenth and final estimate, for
The plaintiff herein furnished materials to Dewar & Chisholm at various times prior to February 7, 1895, which were used in the performance of their contract, and on March 1, 1895, gave to the board of trustees a notice in writing of that fact, and that there was remaining unpaid thereof the sum of $6,654.10, and demanded payment to it of the balance then remaining unpaid to Dewar & Chisholm. Dewar & Chisholm borrowed money at different times during the performance of their contract from the Farmers’ Exchange Bank, one of the defendants herein, and in some instances executed their promissory notes therefor, and.assigned to the bank the estimates of the superintendent of construction as security for their payment. The superintendent of construction was accustomed to give to them informal certificates, or estimates, before presenting them to the board of trustees for allowance, and upon their receipt Dewar & Chisholm assigned them to the bank, as such security, with directions that the amount of the estimate be paid to the bank. Such informal certificate for the eighth estimate was made December 28, 1894, and was assigned to the bank on the next day as security for a note of two thousand dollars, with an order for its pajnnent to the bank. The ninth estimate is dated February 11, 1895, and was in like manner indorsed over to the bank February 13th. After the approval of these estimates by the board of trustees and an order for their payment, the cashier gave notice to the trustees that they had been assigned to the bank, and requested that the amount thereof should be paid to it. The tenth informal certificate is' dated February 15th, and states that it will be presented to the trustees for their approval March 11th. It was indorsed over to the bank on the day of its date, and on the same day the cashier gave notice thereof to the trustees, stating therein that the estimate would be presented to the board at its next meeting.
At the meeting of the trustees March 18th, at which the tenth estimate was approved, the above notice given by the
1. The effect of the notice of March 1st, given by the plaintiff to the trustees, was to intercept in their hands any money which Dewar & Chisholm were then entitled to receive, or which afterward might be payable to them in accordance with the terms of their contract. The notice was equivalent to a garnishment of the moneys then payable to them, and also operated as a notice to the trustees of the plaintiff’s claim against Dewar & Chisholm, and that the payment to the latter of any moneys that might thereafter become payable to them under the terms of the contract would be at the peril of the trustees. The contractor cannot prevent the effect of this notice as to any payments that may mature after it is given, but its effect upon payments that have matured before it is given, but which have not been made, is to be determined by the rights of the contractor in reference to them. If he is still entitled to demand their payment from the owner, such payment is intercepted by the notice, but if he has already assigned them to a third party the notice will be inoperative to prevent their payment to such party. (Code Civ. Proc., sec. 1184; Bates v. Santa Barbara County, 90 Cal. 543; First Nat. Bank v. Perris Irr. District, 107 Cal. 55.)
The provision in the contract for the payment of ninety per cent of the value of materials used and labor performed “as the work progresses," with the condition that, before any payment should be made, the superintendent of construction should, not oftener than once a month, furnish an “estimate" of such labor and materials, “with the amount due thereon," rendered
As seen above, the eighth and ninth estimates were approved and ordered paid before the plaintiff gave the notice of March 1st, but prior to the giving of the notice the contractors had assigned these estimates for value to the Farmers’ Exchange Bank and were no longer entitled to receive the amount of the warrants drawn therefor. The right of the bank to receive the amounts for which the warrants were drawn was not affected by the fact that the assignment had been made before the estimates were approved by the trustees. The contractors had assigned whatever claim they had by virtue of the “estimates,” and the subsequent approval by the trustees, prior to receiving the notice from the plaintiff, inured to the benefit of their assignee. At the time the tenth estimate was presented to the trustees the plaintiff had given notice of its claim, and had thus intercepted the payment to the contractors before their right to receive the money had accrued. Any assignment thereof by the contractors prior to the time when this estimate was payable was ineffective as against the plaintiff.
2. Each of the above estimates made by the superintendent of construction was presented to the board of trustees and approved by it, and is indorsed “Examined, allowed, and ordered paid by the board of trustees this-day of-, 1895,” with the date of such approval, and is authenticated by the signature, "H. L. Drew, chairman.” It is contended by the appellant that as Drew was at the times of such approval the president of the Farmers’ Exchange Bank, he was disqualified from acting as one of the trustees of the asylum in the approval of the estimates.
The board of trustees of the asylum consists of five members, and it does not appear from the record that Mr. Drew participated in the action of the board when it approved these estimates and directed their payment. The authentication by him of the action of the board was subsequent thereto and was only a ministerial act.
Drew’s position, however, as one of the trustees, was not such as to disqualify him from acting upon the estimates of the superintendent of construction. Under the provisions of section 7 of the “Act to regulate contracts on behalf of the state in relation to erections and buildings” (Stats. 1876, p. 430) it is made the duty of the “officer to whom is confided the duty of superintending the erection of any state asylum, building, or improvement,” at the times named in the contract for constructing such
The judgment and order denying a new trial are reversed.
Garoutte, J., and Van Dyke, J., concurred.;