Union School District No. 3 v. Cloepfil

The opinion of the court was delivered by Marspiall, J.:

The plaintiff commenced this action against J. C. Cloepfil, N. B. Trowbridge, and others, for the purpose of having the claims of all the defendants against the plaintiff adjudicated. Several of the defendants were claiming liens on the property of the plaintiff for labor and material furnished in the erection of a school building. During the pendency of the action N. B. Trowbridge died, and Harry Gravatt was appointed the administrator. J. C. Cloepfil was the contractor and had given a bond signed by N. B. Trow-bridge and H. C. Paulsen to satisfy all claims and demands incurred in the construction of the building. J. C. Cloepfil did not have money with which to build the schoolhouse. He'made arrangements with the Vesper State Bank, an intervening defendant, to loan him money for that purpose. Notes were given by Cloepfil to the bank for the money borrowed by him. The last note for $700 was not paid, and Cloepfil overdrew his account in the bank to the amount of $44.68. For the purpose of this case, it may be assumed that all the payments made by the bank were for labor and material that went into the construction of the building. The bank asked to be subro-gated to'the lien rights of those who had furnished labor and material for the construction of the building. The school district paid into court all the money that remained due Cloepfil under the contract. Most of that money, by order of the court and by consent of all the parties to this action, was paid to those who had claims for labor and material. A jury was impaneled, but at the close of the *189 evidence the case was taken from the jury, and the court rendered judgment in favor of the bank against the bondsmen for the sum of $954.26. Harry Gravatt as administrator of the estate of N. B. Trowbridge, deceased, appeals from that judgment.

This case is controlled by Bank v. Insurance Co., 109 Kan. 562 , 200 Pac. 281 , where this court said:

“A bank loaned money to the contractor of a public building to pay and which was paid for labor and material used in the construction work, and took his notes drawing interest. The notes were not paid. The bank sued the bonding company, surety on the bond given by the contractor to the state conditioned that he should pay all indebtedness for labor or material furnished in the construction, and all claims which might be the basis of liens. Held, that by loaning the money to the contractor the bank acquired no interest in, and is not entitled to be subrogated to the rights of those whose claims, if not paid, might have been the basis for liens.” (Syl.)

The judgment as to Harry Gravatt, administrator, is reversed, and the trial court is directed to enter judgment in his favor.