Logan v. Grants Pass & Josephine Bank

Rehearing denied October 1, 1929. ON PETITION FOR REHEARING. (180 P. 877.) REHEARING DENIED. In a petition for a rehearing filed on behalf of the plaintiff and appellant it is contended, in effect, that in December, 1919, there were not funds enough available to pay Gilmore and Childers' notes to the bank in the hands of, or under the control of plaintiff Logan from the proceeds earned by Gilmore and Childers in executing the rock crushing contract. In the former opinion,ante, p. 530, relating to the case between plaintiff Logan and the defendant bank, after quoting a part of the contract of assignment wherein Logan assumed the Gilmore Childers contract and agreed to continue the same to completion, in accordance with the terms of the contract of August 9, 1919, wherein the plaintiff agreed that all moneys becoming due him under the agreement of August 9, 1919, as modified, should be paid to the Grants Pass Banking Company, under the terms of the agreement between the parties of the second part, Gilmore and Childers and the bank, all sums paid by the state for the credit of Gilmore and Childers, not "actually required to meet current bills and pay-roll," should be applied upon the Gilmore and Childers' note; the plain requirement of the contract was that all rock contract proceeds, not immediately necessary to pay for labor and like bills, should be applied on the Gilmore and Childers' note; we stated "the contract of Gilmore and Childers with the bank demanded this and the assignment contract of Gilmore and Childers to Logan called for the same thing."

Not only were the proceeds earned by Gilmore and Childers, excepting immediate running expenses and labor bills, required to be applied on the Gilmore and Childers' note due the bank, but by the plain terms of the agreement, Logan was required to apply the proceeds of the contract in the same manner after he took over the work. The memorandum, as to the time of adjusting the Gilmore and Childers obligations to the bank, in order not to be misunderstood, should be amplified so as to read as follows:

The time to square up the Gilmore and Childers' obligations to the bank was December, 1919, or as soon as the money was received for the work already done by Gilmore and Childers; or if at that time there were not sufficient funds available from the Gilmore and Childers contract, as soon thereafter as funds were available for that purpose from the rock-crushing contract operations which were assumed by Logan and continued by him. That is the meaning of the stipulation contained in the contract of December 1, 1919, wherein Logan agreed that all money becoming due to the party of the first part (Logan) under said agreement of August 9, 1919, as modified, should be paid to the Grants Pass Banking Company. Therefore, as we heretofore stated, the bank was not required to wait until the rock contract was completed to ascertain if there would be money available belonging to Gilmore and Childers to pay their notes.

It is not contemplated, as shown by the writings and the whole plan, that the bank should be deferred until the machinery and all other indebtedness should be paid. Undoubtedly if the plaintiff did not receive sufficient amount from the proceeds of the Gilmore and Childers contract due Gilmore and Childers December, 1919, he did receive sufficient funds thereafter which were not immediately necessary to meet current bills and pay-rolls. Such was the stipulation made by Gilmore and Childers in their contract with the bank and plaintiff Logan assumed that contract and agreed to carry it forward and it was incumbent upon him to carry it forward in the same manner as Gilmore and Childers had agreed to do.

The obligation of the bank, in furthering the assignment by Gilmore and Childers to Logan and which Logan agreed to, was to have someone proceed with the execution of the contract who would carry out the terms thereof and apply the proceeds not actually required to meet current bills and pay-rolls on the Gilmore and Childers notes.

Instead of doing this, the record, as we understand it shows Logan paid large sums for machinery, which he desired to use, and many other expenses, and left the amount, included in the decree due the bank, which should have been paid first after the payment of current bills.

Therefore, whether the figures relating to the Gilmore and Childers proceeds received by Logan in December, 1919, were accurate or not, undoubtedly he thereafter received sufficient funds as proceeds from the rock-crushing contract to pay the balance of the Gilmore and Childers notes to the bank.

The equities are with the defendant bank. Plaintiff Logan, under the terms of his agreement, and as the execution of the rock-crushing contract developed after Logan assumed the contract and proceeded with the work, was required to pay from the proceeds thereof obtained by him, the balance of Gilmore and Childers notes due the bank. Not only the written contracts show this, but Logan's acts in paying a part of the notes and the interest thereon; and as claimed by the bank, his request that the payment of the notes be deferred for a time for his convenience, all confirm the agreement and understanding.

With this explanation the petition for rehearing will be denied. REHEARING DENIED.