Northwestern National Bank v. Guardian Casualty & Guaranty Co.

Citations

• 93 Wash. 635
• 161 P. 473
• 1916 Wash. LEXIS 1246

Syllabus

<p>Municipal Corporations — Public Works — Contracts — Assignments — Bond—Claim of Laborers — Priority. Where a bank, prior to notice of nonpayment for labor and material, took from a contractor on public works assignments of all moneys to become due to the contractor as security for advances to the contractor, and the contract contained no provision for a reserve of any percentage as security for labor and material claims but merely permitted the city to withhold payment until satisfied that all labor and material claims had been paid and on completion of the work the city paid the balance due into court, the assignments are valid appropriations of the fund afterwards paid by the city into court, prior and superior to any rights of laborers or materialmen, and hence superior to any right of subrogation in the surety on the contractor’s bond.</p> <p>Same. The fact that a bank had, pursuant to agreement, advanced money to a contractor on public works, does not prevent it from taking assignments of labor claims, or impose the duty of paying.</p> <p>Same. An assignment of claims for labor against a contractor on public works includes not merely a right to receive the pay due, but operates as an equitable assignment of the laborer’s rights against the contractor’s bond.</p> <p>Same. A contractor having assigned to a bank the sums to grow due on a city contract as collateral for advances, before any default of the contractor, sums due the contractor are to be first applied to repay the advances; and the balance, if any, pro tanto, to pay labor claims assigned to and held by the bank, and the bank is entitled to judgment against the contractor’s surety on its bond for the balance of the lienable labor claims.</p> <p>Same. In such a case, the bank holding assignments of claims by the contractors and their stenographer, which were not lienable claims, cannot assert any right therefor, against the fund due in court or against the bond, as against the surety on the bond payin