Hasse Contracting Company, Inc. v. Kbk Financial, Inc.

127 N.M. 316 (1999)

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Nature of the Case

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Facts

Hilfiker Systems, Inc. entered into a factoring agreement with D. Hilfiker expressly granted D a security interest in 'its inventory, accounts and contract rights and proceeds therefrom.' D's security interest included accounts and contract rights 'that may hereafter arise or be acquired' by Hilfiker. D recorded its security interest by filing a financing statement with the Texas secretary of state on February 22, 1994. In June 1994, Hilfiker signed a contract with P where Hilfiker agreed to supply precast concrete panels for a state highway construction project. A purchase order sent by Hasse to Hilfiker embodied the terms of the contract. The contract contained an anti-assignment clause. The contract expressly stated that the 'conditions and provisions of the general contract for which the material covered hereby is to be supplied are incorporated herein by reference and made a part hereof as fully as if written herein.' The general contract had been let by the state to Corn Construction Company. By law, a condition of the general contract bound Corn and its subcontractors on the project to 'make prompt payment to their subcontractors and suppliers.' The contract obliged Corn to post a payment bond to protect any unpaid 'person, firm or corporation who has furnished labor or material in the prosecution of work provided for in such contract.' Corn subcontracted most of the concrete work on the project to P, with the proviso that P would indemnify Corn if Corn had to pay claims against the payment bond by any of P's suppliers. P then sought a supply of precast concrete panels from Hilfiker. Hilfiker arranged for Gosney & Sons, Inc., a Colorado corporation, to cast the panels and deliver them to the job site. During one of its deliveries, on January 26, 1995, Gosney presented P with a bill for the panels. Upon learning that the deliveries were complete, Hilfiker also sent P an invoice for the panels (Invoice No. 0366) on February 14, 1995. In the midst of Gosney's delivery on or about February 1, 1995, P notified Hilfiker that it was terminating the factoring agreement, effective 30 days later as provided in the agreement. In the midst of Gosney's delivery on or about February 1, 1995, P notified Hilfiker that it was terminating the factoring agreement, effective 30 days later as provided in the agreement. On March 10, 1995, Hilfiker specifically assigned Invoice No. 0366 to D. On March 15, 1995, D notified P that payment of the invoice should be mailed to it and not Hilfiker. Later in March, Hilfiker filed for bankruptcy, and Hilfiker's trustee in bankruptcy subsequently abandoned any interest Hilfiker might have had in Invoice No. 0366. Gosney notified Corn of its intent to make a claim against the payment bond unless it was otherwise paid for supplying the concrete panels. P was already faced with Gosney's bill, Hilfiker's invoice, and D's claim for payment for the concrete panels. P filed this interpleader action naming Gosney and D as parties and depositing 49,004.58 with the clerk of the court. Everybody moved for summary judgment. The court awarded Gosney 'all proceeds and interest. D appealed, and the Court of Appeals upheld the district court. D appealed.