J. J. Struzziery Co. v. A. V. Taurasi Co.
| Decision Date | 08 March 1960 |
| Citation | 340 Mass. 481,165 N.E.2d 120 |
| Parties | J. J. STRUZZIERY CO., Inc. v. A. V. TAURASI CO., Inc. et al. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Joseph H. Elcock, Jr., Boston, Asst. Atty. Gen., for the Commonwealth.
Francis C. Zacharer, Lowell, for Oak Hill Granite Co., Inc., intervener.
Henry Gesmer, Newton, for Atlantic Corporation, intervener.
Benjamin C. Perkins, Boston (Edward R. Thomas, Boston, with him), for Whittemore Co., intervener.
John W. Blakeney, Boston, for Continental Casualty Co.
Alphonse Sancinito, Robert K. Lamere, Howard W. Robbins & Joseph E. Levine, Boston, for certain interveners, were present but did not argue.
Bernard V. Martin, Walpole, and Walter F. Maguire, Boston, for certain interveners joined in a consolidated brief.
Before WILKINS, C. J., and SPALDING, WILLIAMS, COUNIHAN and CUTTER, JJ.
This is a petition under G.L. c. 30, § 39, by J. J. Struzziery Co., Inc., to enforce a claim against A. V. Taurasi Co., Inc. (Taurasi), for material furnished it in performing a contract with the Commonwealth of Massachusetts made by the department of public works for the construction of a section of State highway (Route 128) in the towns of Dedham, Westwood and Needham. The Commonwealth, Taurasi, and Continental Casualty Company, the surety on a performance and payment bond given by Taurasi, are joined as respondents. The petitioner seeks the establishment of its claim; a determination that money retained by the Commonwealth under the contract with Taurasi is security for the payment of the claim; an order that on its establishment the Commonwealth satisfy it from the money retained; and, if this money is insufficient, an order that the casualty company pay so much of the claim as remains unsatisfied. Other subcontractors with claims for labor, materials, appliances and equipment furnished Taurasi in the work of construction have intervened as petitioners.
The Commonwealth in its answer lists the statements of claim which have been filed, states that it holds a 'reserve' of money retained under the contract, and alleges that this money is subject to its right 'to assert a claim for liquidated damages should the circumstances so require.' The casualty company in its answer asserts by way of counterclaim that as part consideration for its suretyship Taurasi assigned to it all moneys which should become due Taurasi under the contract with the Commonwealth and that it is entitled to the funds retained by the Commonwealth.
The execution of the contract between the Commonwealth and Taurasi and the giving of a performance and payment bond by Taurasi and the casualty company are undisputed. A master to whom the petition was referred found that Taurasi contracted with the Commonwealth (No. 5669) on March 30, 1954, to construct a highway at a price of $4,499,538.33 and gave a bond with the casualty company as surety under G.L. c. 30, § 39, for that amount. The total value of the work performed by Taurasi was $4,414,498.47 and the amount paid it by the Commonwealth was $4,086,945.43. The Commonwealth 'has retained as statutory security' $327,553.04, which sum 'is held by reason of and on account of claims filed with it' under c. 30, § 39. Said sum, 'together with the bond executed by the respondent, Continental Casualty Company, as surety herein, constitutes the statutory security taken by the officers and agents who contracted on behalf of the Commonwealth' for the benefit of those complying with the statutory provisions.
The master further found that twelve intervening creditors of Taurasi with claims totaling $316,550.53 are entitled to the benefits of the statutory security, and that other intervening creditors including Oak Hill Granite Company, Inc., with a claim for $8,083.73, although having valid claims against Taurasi, are not entitled to participate in the security.
None of the respondents filed objections to the master's report and on motion of the casualty company it was confirmed by interlocutory decree on July 31, 1958.
On the same day the Commonwealth moved to recommit the report for further findings on the grounds that as a result of Taurasi's suggested bankruptcy and its default in completing the contract the sum which had been withheld by the Commonwealth had become subject to encumbrances not reported by the master, namely, (1) a tax lien by the United States on the goods, effects and credits of Taurasi, (2) a claim of Atlantic Corporation as assignee of Taurasi, (3) a claim of priority to the retained fund by Taurasi's receiver in bankruptcy, and (4) a counterclaim by the Commonwealth for Taurasi's default amounting to $37,040.54. The motion for recommittal was denied and the Commonwealth appealed. A final decree was entered in which the indebtedness of Taurasi to the twelve creditors found by the master to be entitled to statutory security was established and it was declared that the bond on which the casualty company was surety and the moneys retained by the Commonwealth 'together constitute the statutory security.' The decree further established the indebtedness of Taurasi to seven other claimants including Oak Hill Granite Company, Inc., in the sum of $8,083.73 which were not entitled to participate in this security. The Commonwealth was ordered to pay the amounts due the secured claimants and in the event the funds retained by the Commonwealth were insufficient for this purpose the casualty company was ordered to make up the deficiency. It was provided that all claims of Taurasi, the casualty company and the Commonwealth against each other arising out of the contract 'are hereby expressly reserved with the right to pursue [them] in some further proceeding.'
From this final decree the Commonwealth and Oak Hill Granite Company, Inc., appealed. On July 31, 1958, the same date as that of the final decree, Atlantic Corporation filed a petition for leave to intervene which was denied and Atlantic appealed.
In a report of material facts the judge found that the claim of Atlantic against Taurasi appeared to be based on various notes given by Taurasi between October 18 and December 20, 1956, that they totaled $106,444.90 and were set out in a pending suit by Atlantic against Taurasi. He found that Atlantic was a creditor of Taurasi 'pure and...
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...8 Cf. Pacific Indem. Co. v. Grand Ave. State Bank, 223 F.2d 513, 518 (5 Cir.). Compare also J. J. Struzziery Co., Inc. v. A. V. Taurasi Co., Inc., 340 Mass. 481, 486, 165 N.E.2d 120, 123, S.C. 342 Mass. 113, 172 N.E.2d 264, treating 'retained funds * * * [as] in the nature of a trust' (emph......
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