LP Friestedt Co. v. US Fireproofing Co.

• Decision Date: 23 March 1942
• Docket Number: No. 2355.,2355.
• Citation: 125 F.2d 1010
• Parties: L. P. FRIESTEDT CO. et al. v. U. S. FIREPROOFING CO. et al.
• Court: U.S. Court of Appeals — Tenth Circuit

125 F.2d 1010 (1942)

L. P. FRIESTEDT CO. et al. v. U. S. FIREPROOFING CO. et al.

No. 2355.

Circuit Court of Appeals, Tenth Circuit.

January 14, 1942.

Rehearing Denied March 23, 1942.

Lowell White, of Denver, Colo. (J. K. Jepson, of Denver, Colo., on the brief), for appellants.

L. Ward Bannister, of Denver, Colo. (Bannister & Bannister, of Denver, Colo., on the brief), for appellees.

Before PHILLIPS, HUXMAN, and MURRAH, Circuit Judges.

HUXMAN, Circuit Judge.

The United States brought this action on behalf of the Farney Electric Company¹ against the U. S. Fireproofing Company² and the Fidelity and Deposit Company of Maryland.³ The petition set out five separate counts. Only the fourth and fifth causes of action are involved in this appeal. The petition, so far as material herein, in substance alleged that the contractor entered into a contract with the United States to furnish the labor and material to erect an addition to the United States Customs House in Denver, Colorado; that plaintiff entered into a sub-contract with the contractor, agreeing to furnish the labor and material to complete the conduit and wiring for the addition for a consideration of $17,200; that it was agreed that said work could be done in 150 days; that because of delay caused by the contractor in completing preliminary work necessary to be done first, plaintiff was delayed in its work; that by reason of such delays plaintiff was prevented from completing the work within the 150 days; that by reason thereof it incurred additional expense for labor and material in the sum of $5,238.55; and that by reason of such undue delay plaintiff was compelled to pay out additional sums for office expense, telephone and telegraph expense, traveling, hotel and executive expense, in maintaining an organization for supervision during the time it was delayed in its work. Plaintiff seeks recovery of these sums from the surety on its performance bond.

L. P. Friestedt Company⁴ filed an intervening petition in which it alleged that it entered into a sub-contract with the contractor by which it agreed to furnish labor and materials for the erection of the structural steel necessary for the construction of the addition, for which it was to receive $15.50 per ton of steel erected. It alleged the same delay on the part of the contractor charged by plaintiff; that as a result thereof it was compelled to hoist all the steel by hand and was also required to rent additional equipment; that as a result thereof it was damaged to the extent of $6,732.49, for which it prayed judgment against the contractor as principal and the surety on its performance bond. The trial court sustained a motion to dismiss the intervening petition and the fourth and fifth causes of action of the petition. The parties have appealed.

The bond sued on was given pursuant to the provisions of Title 40 U.S.C.A. § 270, commonly known as the Heard Act. The Act provides: "Any person or persons entering into a formal contract with the United States for the construction of any public building, or the prosecution and completion of any public work, or for repairs upon any public building or public work, shall be required, before commencing such work, to execute the usual penal bond, with good and sufficient sureties, with the additional obligation that such contractor or contractors shall promptly make payments to all persons supplying him or them with labor and materials in the prosecution of the work provided for in such contract; * * *."

The Act is to be liberally construed for the protection of those furnishing labor or materials in the prosecution of the work. United States, for Use of Hill, v. American Surety Co., 200 U.S. 197, 26 S.Ct. 168, 50 L.Ed. 437; Brogan v. National Surety Co., 246 U.S. 257, 38 S.Ct. 250, 62 L.Ed. 703, L.R.A.1918D, 776; Standard Accident Ins. Co. v. United States, 302 U.S. 442, 58 S.Ct. 314, 82 L.Ed. 350.

Stripped of all technicality, plaintiff and intervenor seek to recover damages claimed to have been incurred because of the breach by the contractor of an implied covenant in the sub-contract against unreasonable delays preventing the subcontractors from proceeding with their work. The parties recognize this, because in the only point relied upon in their designation of points, it is asserted that: "* * * a subcontractor can recover his damages consisting of expenses made necessary by the delay of...