George H. Sampson Co. v. Commonwealth

• Decision Date: 22 May 1909
• Citation: 88 N.E. 911,202 Mass. 326
• Parties: GEORGE H. SAMPSON CO. v. COMMONWEALTH et al. HERSEY v. SAME.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

202 Mass. 326

88 N.E. 911

GEORGE H. SAMPSON CO.

v.COMMONWEALTH et al.

HERSEY

v.SAME.

Supreme Judicial Court of Massachusetts, Suffolk.

May 22, 1909.

Appeal from Superior Court, Suffolk County.

Suits by the George H. Sampson Company and by Albert A. Hersey against the Commonwealth and others. From a decree denying relief in the first case, complainant appeals; and from a decree adjudging the rights of the parties in the second suit, certain of the defendants appeal. Decree in first case reversed, and in second case affirmed.

Fred L. Norton, for A. A. Hersey.

John H. Butler and C. H. Waterman, for Sampson Co.

Dana Malone, Atty. Gen., and Fred T. Field, Asst. Atty. Gen., for the Commonwealth.

Leslie K. Storrs, for Pope & Cottle and W. H. Wood & Co.

Wiggin & Wiggin, for Malden City Lumber Co.

Berry & Upton, for Locke Coal Co.

Elder & Whitman, J. T. Pugh, and H. W. Barnum, for U. S. Fidelity & Guaranty Co.

KNOWLTON, C. J.

The first of these suits is brought against the firm of Shanahan, Casparis & Co., the commonwealth of Massachusetts, and the United States Fidelity & Guaranty Company to recover for materials furnished to the above-mentioned firm in the construction of parts of an aqueduct for the supply of the city of Boston and its suburbs with water, which parts of the aqueduct the firm agreed to build under contracts entered into with the metropolitan water and sewerage board, under the provisions of St. 1901, p. 106, c. 168. Pub. St. 1882, c. 16, § 64, which were in force when these contracts were made, required the officers or agents contracting in behalf of the commonwealth for the construction or repair of public buildings or other public works, upon which liens might attach for labor or materials as against private owners, to ‘obtain sufficient security, by bond or otherwise, for payment by the contractor and by all subcontractors for all labor performed or furnished and for all materials used in such construction or repair.’ Bonds were given to the commonwealth by this firm, to secure the proper performance of these contracts and also payment for all labor performed or furnished and for all materials used in the carrying out of the contracts, which several bonds the United States Fidelity & Guaranty Company executed as a surety. The plaintiff furnished a large amount of gunpowder, which was used in the prosecution of the work, in excavating the rock by blasting for the trench, as required by the contracts. The greater part of this material so excavated was used in the construction of the aqueduct. The plaintiff seeks, by this suit, to obtain an enforcement of the liability of the surety on the bonds for the payment of the debt.

The first question is whether a remedy can be given by the court upon such a bond. The decision in Nash. v. Com., 174 Mass. 335, 54 N. E. 865, goes for towards answering this question. See, also, Kennedy v. Com., 182 Mass. 480, 65 N. E. 828;Burr v. Massachusetts School for the Feeble-Minded, 197 Mass. 357, 83 N. E. 883. The only difference between that case and the present one, in this particular, is that the payment in that case was enforced against the money due from the commonwealth upon the contract.

It was held that the various sections of chapter 195 of the Public Statutes of 1882, taken in connection with the board and comprehensive language of St. 1887, p. 879, c. 246, subjects the commonwealth to proceedings in its own courts, ‘for the determination of claims of the character which civilized governments have always recognized,’ even though satisfaction of them has usually been obtained only by a direct appeal to the sovereign, or, in our form of government, to the Legislature. See Murdock Parlor Grate Company v. Com., 152 Mass. 28, 31, 24 N. E. 854,8 L. R. A. 399. In the same decision it was held that the statute makes the commonwealth a trustee for persons having claims for labor and materials, and that this trust may be enforced by a court upon the fund due from the commonwealth under the original contract.

The reasoning on which the decision rests is equally applicable to the enforcement of the security furnished by a bond. By the terms of the statute, this security is for the benefit of those having claims for labor and materials. The statute implies the existence of a right, on the part of these persons, to an enforcement of the bond to obtain payment for their debts. No mode of enforcement is prescribed. The courts are left to take proper action upon the application of those seeking relief. A petition in equity, like that in Nash v. Com., ubi supra, in which orders and decrees can be made, protecting the rights of all parties, is a proper proceeding in a case like the present. In many cases of this kind there would be numerous persons entitled to share in the security, some of whom might not be known when the suit was brought, and a proceeding in equity would be the only adequate mode of adjusting the rights of the parties. Statutory rights of beneficiaries, under contracts to which they are not direct parties, have often been recognized and enforced by the courts. Harris v. First Parish in Dorchester, 23 Pick. 112-114;Stephenson v. Monmouth Mining Co., 28 C. C. A. 292, 84 Fed. 114. See, also, Ward v. Lewis, 4 Pick. 518;New England Bank v. Lewis, 8 Pick. 113;Frost v. Gage, 1 Allen, 262;Andrews v. Tuttle, Smith Co., 191 Mass. 461, 78 N. E. 99;Poland v. Beal, 192 Mass. 559, 78 N. E. 728;Burlew v. Hillman, 16 N. J. Eq. 23, 25. The present case differs materially from those in which it is held that, ordinarily, an action at law cannot be maintained in his own name by one who is not a party to a contract given to another person for his benefit. The right to compel the surety upon the bonds to make payment for the benefit of this plaintiff may well be enforced in this suit.

The next question is whether a claim for gunpowder, used in blasting to excavate the trench and to put the rock in condition for use in the construction of the aqueduct, comes within the provisions of the statute. The right to security is given, under the statute, only for labor and materials for which a lien might attach if the building or other public works belonged to private persons. Pub. St. 1882, c. 16, § 64; Rev. Laws, c. 6, § 77; Kennedy v. Com., 182 Mass. 480, 65 N. E. 828. It has been held, under the law relative to mechanics' liens, that the statute did not cover materials ‘that did not form a part of the completed structure.’ Boston Furnace Co. v. Dimock, 158 Mass. 552, 33 N. E. 647. This is undoubtedly true in reference to such materials as were under consideration in these cases. But this court has never had occasion to consider a case like the present, where the material was used directly upon the work of the structure in process of construction, for the purpose of bringing it into proper form or condition, and was entirely consumed in the use. In such a case it may be said that, in a general sense, the material enters into the completed structure. In this broad sense it forms a part of it, as it loses its identity and ceases to exist as a separate substance, in producing a direct effect upon the construction, which effect remains as a part of the result shown in the completed structure. In Rapauno Chemical Company v. Greenfield & N. Ry. Co., 59 Mo. App. 6, the court used this language: ‘Hence we think that the argument is unsound that the lien in the cases here must fall because the powder was entirely consumed, and therefore could not have been actually incorporated in the work. Such a construction of the statute we conceive to be a strained one, and not within its equity or spirit. What was said on this subject by the Supreme Court in the case of Simmons v. Carrier, 60 Mo. 581, must be read in the light of the particular facts of that case. There the claim was for lumber. The court held that a lien could not be maintained for such material, unless it actually entered into the construction of the building. This was undoubtedly the proper construction of the statute as applicable to lumber and such like materials, to be used in or on the improvements. But in our opinion it is unreasonable to apply such a test to powder, which is entirely consumed in its use.’

The same thought is expressed in Hercules Powder Company v. Knoxville, etc., Railway Company, 113 Tenn. 382, 83 S. W. 354,67 L. R. A. 487, 106 Am. St. Rep. 836, as follows: ‘The fact that the materials were consumed in the use and were thus destroyed in the construction, we think does not deprive the furnisher of his lien. The consumption of explosives is the only use that can be made of them, and their consumption is absolutely necessary to the excavation of tunnels through rock. In other works, they are material which enter into the building and grading of the road, as much so as trestles, bridges and culverts contain materials which are necessary to the grading of the road, at such places as require trestles and bridges and culverts. * * * All of the decisions upon this subject, draw a clear distinction between explosives and explosive supplies, used in the construction of a railroad company's roadway, and which are necessarily consumed in the use thereof, and machinery and tools, furnished for that purpose, which are held to be a part of the contractor's plant, and which do not go into the building of the roadway, but retain their identity and fitness for future use, saving the limited and gradual wear and tear incident to such use.’

In an opinion of the Court of Appeals in New York we find these statements: ‘The argument that dynamite is not a material, but a part of the contractor's plant, which, like picks and shovels or mechanical appliances, are used in the performance of work, but are not considered materials furnished, within the purview of the statutes, seems to us inherently unsound. A steam shovel, an engine and boiler, picks, shovels, crowbars and the like, are tools and appliances which, while used...