Standard Acc Ins Co v. United States Powell

• Decision Date: 03 January 1938
• Docket Number: No. 41,41
• Citation: 82 L.Ed. 350,58 S.Ct. 314,302 U.S. 442
• Parties: STANDARD ACC. INS. CO. v. UNITED STATES, for Use and Benefit of POWELL et al
• Court: U.S. Supreme Court

302 U.S. 442

58 S.Ct. 314

82 L.Ed. 350

STANDARD ACC. INS. CO.

v UNITED STATES, for Use and Benefit of POWELL et al.

No. 41.

Argued Dec. 8, 1937.

Decided Jan. 3, 1938.

Messrs. Stuart B. Warren and George W. Wylie, both of St. Petersburg, Fla., for petitioner.

Mr. John Bell, of Tampa, Fla., for respondents.

Mr. Justice McREYNOLDS delivered the opinion of the Court.

The petitioner is surety on a post office construction bond given pursuant to the Act of Congress approved August 13, 1894, c. 280, 28 Stat. 278, as amended, title 40 U.S.C.A. § 270, which provides:

'Any person or persons entering into a formal contract with the United States for the construction of any public building, or the prosecution and completion of any public work, or for repairs upon any public building or public work, shall be required, before commencing such work, to execute the usual penal bond, with good and sufficient sureties, with the additional obligation that such contractor or contractors shall promptly make payments to all persons supplying him or them with labor and materials in the prosecution of the work provided for in such contract; and any person, company, or corporation who has furnished labor or materials used in the construction or repair of any public building or public work, and payment for which has not been made, shall have the right to intervene and be made a party to any action instituted by the United States on the bond of the contractor, and to have their rights and claims adjudicated in such action and judgment rendered thereon, subject, however, to the priority of the claim and judgment of the United States.'

Respondent, common carrier by railroad, having transported material for the structure, sued on the bond to recover freight charges and prevailed in both courts below. They held it was a 'corporation who has furnished labor or materials used in the construction' of a public building. The correctness of this conclusion is the only question before us.

The cause is here because of conflicting opinions in Circuit Courts of Appeals. United States, etc., v. Hyatt, 5 Cir., 92 F. 442; Title Guaranty & Trust Co. v. Puget Sound Engine Works, 9 Cir., 163 F. 168; Mandel et al. v. United States, etc., 3 Cir., 4 F.2d 629; Maryland Casualty Co. v. Ohio River Gravel Co., 4 Cir., 20 F.2d 514; City of Stuart, for Use and Benefit of Florida East Coast R. Co. v. American Surety Co., 5 Cir., 38 F.2d 193; Standard Accident Insurance Co. v. United States, etc., 5 Cir., 89 F.2d 658.

Petitioner maintains that freight cannot be considered as 'labor or material' without doing violence to the words of the statute; also that Congress did not intend to extend further protection to carriers who could enforce their lien for charges by retaining and selling the materials.

City of Stuart, etc., v. American Surety Co., supra, Circuit Court of Appeals Fifth Circuit, 1930, carefully considered and denied these defenses and stated reasons therefor which we deem adequate. This was followed by the court below in present cause.

The statute often has been before us. Guaranty Company v. Pressed Brick Co., 191 U.S. 416, 24 S.Ct. 142, 48 L.Ed. 242; United States, for Use of Hill, v. American Surety Co. of New York, 200 U.S. 197, 201, 26 S.Ct. 168,...