Massachusetts Bonding & Ins. Co. v. Antonelli Const. Co., Civ. A. No. 58-1096.
| Citation | 173 F. Supp. 391 |
| Decision Date | 20 May 1959 |
| Docket Number | Civ. A. No. 58-1096. |
| Parties | MASSACHUSETTS BONDING & INSURANCE COMPANY v. ANTONELLI CONSTRUCTION CO., Inc., et al. |
| Court | U.S. District Court — District of Massachusetts |
Joseph K. Collins, Boston, Mass., for plaintiff.
Daniel F. Featherston, Jr., Choate, Hall & Stewart, Boston, Mass., for defendant Peabody.
Irvin M. Davis, Boston, Mass., for defendant R. I. Covering.
Jerome P. Facher, Mintz, Levin & Cohn, Boston, Mass., for defendant Struthers Wells.
Robert S. Jones, Sherburne, Powers & Needham, Boston, Mass., for defendant Control Instrument & Hays Corp.
This is an interpleader petition brought under 28 U.S.C.A. § 1335 by a Miller Act, 40 U.S.C.A. § 270a, surety on the bond of a government contractor against thirty subcontractors and suppliers. The prime contractor has failed, and the surety has recognized that the provable liabilities will exceed the penal sum of the bond. It brings this proceeding naming all creditors and alleged creditors as respondents, some being citizens of various states,1 pays the penal sum into court, and asks that it be discharged of all further liability. This procedure permits2 the creditors to litigate and determine as between themselves the amounts of their respective claims, and ultimately each receive a proportionate payment. This is an appropriate thing for petitioner to do. What seems less appropriate is that it asks costs to include counsel fees taxed as between solicitor and client to be paid out of the moneys deposited in court, thereby further reducing the "dividend" that will be paid to the creditors.
Petitioner points out that in interpleader proceedings counsel fees are frequently awarded. That is true, and properly so. When a stakeholder, customarily called "innocent" or "disinterested," finds himself faced with alternative, conflicting claims, the existence of which are no fault of his, there is no reason why he should be put to expense to resolve a dispute with which he has no connection. Petitioner here, however, is not a benign participant drawn into this matter by circumstances unrelated to itself. This is not an incidental, secondary, dispute. It is fundamental to the very occurrence which petitioner agreed to insure against.
Petitioner's position may be illustrated. The penal sum of the bond paid into court is $96,000. Had the claims been $96,000 petitioner would not, and could not have interpleaded—it would have paid the claims in full. But there being, say, $116,000 in valid claims, it pays $96,000 into court and asks for $1,500 back as counsel fees. In other words, having undertaken to secure obligations up to $96,000, it wishes to pay fewer because there are more.
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