Glen Const. Co., Inc. v. Bank of Vienna

• Decision Date: 30 June 1977
• Docket Number: No. 76-1812,76-1812
• Citation: 557 F.2d 1050
• Parties: GLEN CONSTRUCTION COMPANY, INC., Appellant, v. BANK OF VIENNA, Chantilly Crushed Stone, Scott Kurt Construction Co., Fairfax Equipment Rental Corp., W. B. Clark, United States of America, Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1050

557 F.2d 1050

GLEN CONSTRUCTION COMPANY, INC., Appellant, v. BANK OF VIENNA, Chantilly Crushed Stone, Scott Kurt Construction Co., Fairfax Equipment Rental Corp. W. B. Clark, United States of America, Appellees.

No. 76-1812.

United States Court of Appeals Fourth Circuit.

Argued Feb. 16, 1977.

Decided June 30, 1977.

Carol A. Sigmond, Arlington, Va. (Miller, Miller, Patterson & Reese, Arlington, Va., on brief), for appellant.

Arthur B. Vieregg, Jr., Fairfax, Va. (Frank D. Swart, Fairfax, Va., on brief), for appellees.

Before HAYNSWORTH, Chief Judge, and BUTZNER and RUSSELL, Circuit Judges.

BUTZNER, Circuit Judge:

Glen Construction Co. appeals a judgment in favor of Chantilly Crushed Stone, Inc., in an amount of approximately $10,000 for the cost of stone delivered to a building site. We reverse because a subcontractor, Scott Kurt Construction Co., instead of Glen, was obligated to pay for the stone.

As general contractor for the Sherwood Medical Building, Glen subcontracted with Scott Kurt in February, 1975, to provide the project with a site water line, sanitary lines and storm drains. In turn, Scott Kurt arranged to purchase crushed stone from Chantilly for the work. During the summer of 1975, both Glen and Chantilly realized that Scott Kurt was in financial trouble. Because Chantilly was reluctant to deliver the stone which Scott Kurt ordered for July and August, Glen offered to pay Chantilly directly or to issue checks payable jointly to Chantilly and Scott Kurt. Ultimately, Glen and Chantilly settled on the joint check arrangement. Chantilly continued to make deliveries and to bill Scott Kurt, sending copies of the bills to Glen.

In June, July, and August, 1975, the United States filed tax liens against Scott Kurt, and in the latter part of July, it served the first of two levies on Glen. Glen then issued joint checks pursuant to the agreement. However, upon advice of counsel that such payment might be illegal because of the levy, Glen stopped payment on the checks.

Glen then filed an interpleader action in the district court and paid into its registry all of the funds it owed Scott Kurt, including the amount due for the stone. Chantilly filed its claim against the deposit in the interpleader action and also filed a cross-claim against Glen, asserting that Glen had promised to pay it for the stone.

The district court awarded all the funds deposited by Glen to the Internal Revenue Service on the basis of its priority over the claims of Scott Kurt's other creditors. ^* The court also ruled that Glen was independently indebted to Chantilly, or alternatively, that it was liable as a guarantor. The court's decision required Glen to pay twice for the stone.

In Lawson v. States Constr. Co., 193 Va. 513, 518, 69 S.E.2d 450, 453 (1952), involving a dispute between a general contractor and a subcontractor's supplier, the Supreme Court of Virginia stated:

In ascertaining to whom credit was extended, the intention of the parties governs. This intention is to be ascertained from the words used by the parties and all of the circumstances surrounding the transaction. The...