Irwin v. United States, 7784.

Citation122 F.2d 73,74 App. DC 296
Decision Date28 July 1941
Docket NumberNo. 7784.,7784.
PartiesIRWIN et al. v. UNITED STATES, to Use of NOLAND CO., Inc.
CourtU.S. Court of Appeals — District of Columbia Circuit

Amasa M. Holcombe and Prentice E. Edrington, both of Washington, D. C., for appellants.

Bynum E. Hinton and Alexander M. Heron, both of Washington, D. C., for appellee.

Before GRONER, Chief Justice, and MILLER and VINSON, Associate Justices.

GRONER, C. J.

In December, 1936, the United States entered into a contract with appellant, Irwin & Leighton, for the construction of a library building at Howard University in the District of Columbia. A performance bond and a payment bond were required in accordance with the Miller Act.1 The surety on the bonds was the other appellant, United States Guarantee Company. Irwin & Leighton completed the building in accordance with the contract and paid all subcontractors in full. Appellee, Noland Company, Inc., however, had furnished materials on the order of a subcontractor, for which it was not paid. Accordingly, it brought this action on the payment bond in the name of the United States. The general contractor and the surety moved to dismiss on the ground that the university building was not a "public building or public work of the United States" within the meaning of the Miller Act, under which the suit was brought. The trial court was of the opinion that it was the intention of Congress to include within the provisions of the Miller Act contracts for work such as the one involved in the suit, and rejected the motion. We granted a special appeal.

The established and admitted facts are as follows: By Act of February 14, 1931,2 Congress authorized the construction at Howard University of a library building to cost not to exceed $800,000, of which sum $400,000 was made immediately available. A small part of the latter sum was used for architectural fees, but shortly after the first election of President Roosevelt the original appropriation was "impounded" and no steps were taken to erect the library until after the enactment of the National Industrial Recovery Act, at which time the Administrator of Public Works (the Secretary of the Interior), with the approval of the President, allocated sufficient funds for the construction of the building under a section of that Act authorizing a program of public works projects.3 The plans and specifications were drawn by an architect selected by Howard University, and were approved by the Secretary. The contract was signed by the Assistant Secretary, and the funds were expended under the direction of the Administrator of Public Works.

The National Industrial Recovery Act contained no requirement for a bond to secure the faithful performance of contracts made pursuant to its provisions. But the Secretary, in preparing the contract and in his instructions to bidders, gave notice that two bonds would be required — one, a "performance bond" and the other, a "payment bond", both running to the United States "as required by the Act of Congress approved August 24, 1935" (the Miller Act, supra, footnote 1). When the suit in this case was instituted in the United States District Court for the District of Columbia, it was brought in the name of the United States and was expressly based on the provisions of the Miller Act. The main question, then, for decision is whether the bond sued upon was authorized to be demanded of the contractor under the provisions of that Act.

In Maiatico Construction Co. v. United States, 65 App.D.C. 62, 79 F.2d 418, certiorari denied, 296 U.S. 649, 56 S.Ct. 309, 80 L.Ed. 462, we dealt with a state of facts substantially identical with those we have narrated. That case, as this, involved a contract made by the United States for the construction of buildings for Howard University. There, as here, the government had appropriated the necessary funds. We held there that an unpaid materialman could not recover on a contractor's bond executed under the Heard Act, 40 U.S.C.A. § 270. We said in the Maiatico case that Howard University is a private corporation; that its charter gives it all the rights and powers usually vested in private corporations, including the right to purchase and sell real estate and the right to contract and to sue and to be sued; that its buildings are erected on its own lands; and that its general funds, including a large endowment fund, are under its control and its financial affairs are subject to the supervision of the Secretary of the Interior only as to the expenditure of federal moneys appropriated for university purposes. On this state of facts we held that the generosity of the government in providing buildings for the university from time to time did not of itself change Howard University from a private into a public institution. As a private corporation, it was, of course, subject to all mechanic lien statutes of the District of Columbia. Accordingly, we held that a bond taken under the Heard Act, which applies exclusively to the construction of public buildings of the United States, would not sustain the claim of a materialman for supplies furnished to buildings privately owned.4

Unless, therefore, a fair construction of the Miller Act, which in 1935 superseded the Heard Act, will justify a different result, as appellee insists it will, it follows that we must reverse the judgment of the court below.

The Heard Act, as has been often said, was passed in recognition of the inability of subcontractors to take liens upon the public property of the United States. Its practical effect was to substitute the required bond in place of the building on which the lien, in the case of non-public property, would attach. In 1935 bills were introduced in Congress for the purpose of enlarging this protection to subcontractors and supplymen in certain definite respects, resulting in the passage of the Miller Act. The purpose of the new Act was to relieve certain procedural troubles found to exist under the old Act and to shorten the period when, under that Act, suit might be instituted against the surety. To this end, the Miller Act provides a separate and direct right of action upon a bond called a payment bond, to be taken exclusively for the protection of laborers and materialmen, whereas the Heard Act required only one bond, primarily for the protection of the United States and secondarily for the protection of laborers and materialmen. The reasons and purpose of the change were stated by Congressman Dockweiler (H. R. 5054) as follows:

"The Heard Act as it stands today permits very substantial injustices to be done to laborers, materialmen, and subcontractors. There is only one bond written under that act, and it enures, respectively, to the benefit of the Government on the faithful performance of the contract, and to the benefit of the laborers and materialmen and subcontractors. But the right of the laborers, materialmen, and subcontractors is postponed to an unreasonable length of time. Action under it by the Federal Government must be awaited, on the faithful-performance bond, which action can be brought at any time within 6 months after the full and final completion of the contract; and only after the end of that time can laborers, subcontractors, and materialmen have any relief under the bond.

* * *

"All that the materialmen, subcontractors, and laborers desire is a separate and direct right of action upon a separate bond."

The Report of the House Judiciary Committee (No. 1263, 74th Cong., 1st Sess.) is of precisely the same tenor. All of the hearings and discussion centered around an effort to correct a purely procedural question. Accordingly, we think enough has been said to show that the Miller Act adds nothing over the Heard Act to appellee's rights. If appellee may maintain this action under the provisions of the Miller Act, it could in the same circumstances have maintained it under the provisions of the Heard Act prior to its repeal. In either case, the question would be whether an action could be maintained on a bond taken by the United States to secure the payment of laborers and materialmen in the construction of a building which was not a public building of the United States.

But appellee argues that when, in the passage of the National Industrial Recovery Act, Congress authorized the Administrator to prepare a "program of public works" to include "any projects of the character heretofore constructed or carried on either directly by public authority or with public aid to serve the interests of the general public", it thereby declared such work as is involved in the present contract a "public work of the United States" and brought the instant contract within the provisions of the Act. But we think this does not follow. Assuming, for the purpose at hand, that the building of a library at Howard University involves the extension of a project heretofore carried on with public aid to serve the interests of the general public, it would be going very far to say that, by including it within a "public works" program, Congress meant to change the well established definition of public buildings and works as those terms have been invariably understood in statutes requiring security for the performance of contracts made with the United States. And that Congress had no such thought or intent abundantly appears, we think, in considering the other items included in the "program", for these embrace loans for the construction or completion of hospitals, the operation of which is partly financed from public funds,...

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  • Sanford v. Howard University, Civ. A. No. 75-1034.
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