Moran v. Guardian Casualty Co.

• Decision Date: 25 February 1935
• Docket Number: No. 6309.,6309.
• Citation: 64 App. DC 188,76 F.2d 438
• Parties: MORAN v. GUARDIAN CASUALTY CO.
• Court: U.S. Court of Appeals — District of Columbia Circuit

64 App. DC 188, 76 F.2d 438 (1935)

MORAN v. GUARDIAN CASUALTY CO.

No. 6309.

United States Court of Appeals for the District of Columbia.

Argued January 10, 11, 1935.

Decided February 25, 1935.

John Philip Hill and Francis W. Hill, Jr., both of Washington, D. C., for appellant.

Edward S. Bailey and James C. Rogers, both of Washington, D. C., for appellee.

Before MARTIN, Chief Justice, and ROBB, VAN ORSDEL, HITZ, and GRONER, Associate Justices.

GRONER, Associate Justice.

This is a contest between appellant and appellee over a fund amounting to $4,068.05 found to be due by the United States to a contractor for work done under a contract with the United States. The government has paid the money to a receiver appointed in the cause. The suit below was begun by Stephens and others claiming to be creditors of the contractor, alleging its bankruptcy and asking for the appointment of a receiver to collect its assets, including the amount due by the United States, and for distribution in accordance with the equities and priorities established. Appellant, North Capitol Savings Bank, intervened, alleging it had loaned the contractor $3,800, on the contractor's promissory note, for the purpose of providing funds for labor and material furnished in the prosecution of the government work; that the contractor had then and there made and delivered to it a power of attorney to receive, indorse, and collect in its name checks drawn on the Treasurer of the United States and delivered on account of the work; and prayed that it be decreed to have a prior equitable lien upon the fund.

During the progess of the litigation the bank was placed in the hands of Moran, receiver, who was duly substituted in the place and stead of the bank.

Thereafter appellee, Guardian Casualty Company, filed its intervening petition, alleging that it had become surety for the contractor and, as a result of contractor's default, had paid out sums in excess of the fund remaining in the hands of the government, and was entitled to reimbursement to the whole extent of the fund. The cause was in due time referred to an auditor, who reported that the contractor and the United States had entered into a contract, as the result of which the contractor had agreed to furnish labor, materials, etc., in connection with certain government work in the Anacostia river at Washington; and that appellee, in order to secure the performance of the contract and the payment for labor, materials, and supplies furnished in the work, had executed the usual statutory bond as surety; that in consideration of its becoming surety contractor agreed to indemnify it against all loss sustained or incurred by it as surety, and had assigned to it all percentages retained on account of the contract, and any and all sums that might be due by the United States at the time of any abandonment, forfeiture, or breach. The contract was terminated by the United States before the completion of the work because of breach of contract by contractor, and the amount paid by the United States to the receiver was the amount then due the contractor. The auditor further reported...