City of Stuart v. American Surety Co.

• Decision Date: 26 February 1930
• Docket Number: No. 5691.,5691.
• Citation: 38 F.2d 193
• Parties: CITY OF STUART for the Use and Benefit of FLORIDA EAST COAST RY. CO. v. AMERICAN SURETY CO. OF NEW YORK.
• Court: U.S. Court of Appeals — Fifth Circuit

38 F.2d 193 (1930)

CITY OF STUART for the Use and Benefit of FLORIDA EAST COAST RY. CO. v. AMERICAN SURETY CO. OF NEW YORK.

No. 5691.

Circuit Court of Appeals, Fifth Circuit.

February 26, 1930.

Robert H. Anderson and John B. L'Engle, both of Jacksonville, Fla. (Robert H. Anderson, Russell L. Frink, and John B. L'Engle, all of Jacksonville, Fla., on the brief), for appellant.

W. McL. Christie, of Fort Myers, Fla. (Doggett, Christie & Doggett, of Jacksonville, Fla., and Stuart Mackenzie, of Miami, Fla., on the brief), for appellee.

Before BRYAN and FOSTER, Circuit Judges, and SIBLEY, District Judge.

SIBLEY, District Judge.

A suit at law in the name of city of Stuart, for the use of Florida East Coast Railway Company, was brought against American Surety Company, as surety on a contractor's bond, to recover for freight, switching, and demurrage charges on carload material used in the performance of a contract with the city for public work, and was dismissed on demurrer. The controlling questions are: (1) Whether the charges were owing by the contractor; (2) whether they are within the liability assumed under the bond.

1. The declaration avers generally that the services of the railway company were furnished to the contractor, John W. Rollins Company, and used by it in the performance of its contract. The bills of particulars annexed, however, under the column entitled "due from," say variously: "City of Stuart, care Rollins Construction Company," and "City of Stuart, care J. W. Rollins," and "City of Stuart, care J. W. Rollins Company." The declaration should control as to the person sought to be charged by this suit. It is urged, however, that the bills show that the shipments were consigned to the city of Stuart, and not to the contractor, and that the city, and not the defendant, necessarily owes the charges. Assuming the fact to be true, the consequence claimed would not follow. It does not appear that the city ordered the material, or authorized it shipped to it, or accepted delivery on its arrival. On the contrary, it is alleged that the contract required the contractor to furnish all labor and material, and that the service of the railroad in delivering the material was supplied to the contractor. The bills may be simply an error. The statements of the declaration control on demurrer.

2. The bond, which measures the defendant's liability, does not refer to any statute, but was required by section 5397 of Compiled General Laws of Florida of 1927, embracing an act of 1915 as amended in 1925. The bond should doubtless be construed in the light of the law requiring it, and be supposed to accomplish its purposes. Therefore, whether the statute intends to cover the charges of railroads for freight and demurrage is important. The precise point here presented has not been ruled on by the Florida Supreme Court, but that court recognizes that the Florida statute is an adoption of the statute of the United States on the subject, 40 U. S. Code, § 270 (40 USCA § 270), and that the authoritative construction of the latter prior to the enactment of the former was adopted with the statute, and that federal rulings since are highly persuasive as to the meaning of the Florida statute. Kidd v. Jacksonville, 97 Fla. 297, 120 So. 556. The federal decisions herein relied on were reviewed with approval by the Florida Court in Fulghum v. State of Florida, 92 Fla. 662, 109 So. 644. The particular words for construction in the Florida statute are those which require the contractor for public work to execute a bond "with the additional obligation that such contractor, or contractors, shall promptly make payments to all persons supplying him, or them, labor, material and supplies, used directly or indirectly by the said contractor * * * or sub-contractors in the prosecution of the work provided for in said contract." Laws 1925, c. 10035. The early constructions of the similar words of the federal statute were rather strict; this court in 1899, in United States v. Hyatt (C. C. A.) 92 F. 442, concluding that the services of a railroad were not "labor." This decision has been followed so recently as Mandel v. United States (C. C. A.) 4 F.(2d) 629.

Besides the narrow meaning given the word "labor," the main reasons advanced for the holding are that the common carrier has a lien, and does not need protection by a bond, and that on delivering the goods without payment he destroys the lien, and prejudices the surety in his right of subrogation. As to the first reason, we find in the statute no reference to liens. Protection is expressly extended to all persons who furnish the named things, whether under lien or not, whether individual or corporation, rich or poor, supplying in person or through agents and representatives. As to the last see Fulghum v. Florida, 92 Fla. 662, 109 So. 644. A railroad company is not excluded. In point of fact, many persons who have a lien enforceable by retention have been held to be within the statute. Nor is the nature of the work done in transportation such as to prevent its being...