Nickell v. United States

• Decision Date: 12 January 1965
• Docket Number: 7690.,No. 7689,7689
• Citation: 340 F.2d 117
• Parties: Cecil NICKELL, d/b/a Cecil Nickell Construction Company, and United Benefit Fire Insurance Company of Omaha, Nebraska, Appellants, v. UNITED STATES of America for the use and benefit of TEXAS VITRIFIED PIPE COMPANY, Appellee. Cecil NICKELL, d/b/a Cecil Nickell Construction Company, and United Benefit Fire Insurance Company of Omaha, Nebraska, Appellants, v. UNITED STATES of America for the use and benefit of TEX-VIT MANUFACTURING COMPANY, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

340 F.2d 117 (1965)

Cecil NICKELL, d/b/a Cecil Nickell Construction Company, and United Benefit Fire Insurance Company of Omaha, Nebraska, Appellants, v. UNITED STATES of America for the use and benefit of TEXAS VITRIFIED PIPE COMPANY, Appellee.

Cecil NICKELL, d/b/a Cecil Nickell Construction Company, and United Benefit Fire Insurance Company of Omaha, Nebraska, Appellants, v. UNITED STATES of America for the use and benefit of TEX-VIT MANUFACTURING COMPANY, Appellee.

Nos. 7689, 7690.

United States Court of Appeals Tenth Circuit.

January 12, 1965.

Paul A. Phillips, Albuquerque, N. M., for appellants.

Lon Sailers, of Turner, Rodgers, Winn, Scurlock & Terry, Dallas, Tex. (Olson & Harris, Albuquerque, N. M., on the brief), for appellee.

Before LEWIS, BREITENSTEIN and HILL, Circuit Judges.

HILL, Circuit Judge.

These actions were brought under the provisions of the Miller Act, 40 U.S.C.A. § 270a et seq., by unpaid materialmen against a contractor and his surety to recover for materials furnished to the contractor. The appeals are from judgments in favor of the unpaid materialmen and against the contractor and his surety.

On March 23, 1961, the appellant, Nickell, entered into a contract with the United States Government which provided for the construction by him of sewer facilities on the Zuni Indian Reservation in New Mexico. On the same date Nickell, as principal, and the appellant, United Benefit Fire Insurance Company (United), as surety, executed a standard government form of payment bond to the United States pursuant to the provisions of 40 U.S.C.A. § 270a and, also, a standard government performance bond. The bonds were accepted and the contract was awarded to Nickell.

Subsequent to May 1, 1961, the appellees, Texas Vitrified Pipe Company and Tex-Vit Manufacturing Company, commenced to furnish material to Nickell which he used in constructing the sewer facilities. From that date until December 1, 1961, the appellees furnished material in the total sum of $44,892.44. Nickell was unable to pay for the material and after appellees' demand upon Nickell and United was refused, the instant actions were commenced.

As a defense to the suits, appellants alleged that the Internal Revenue Service had levied upon the proceeds due under the construction contract, for federal taxes owed by Nickell; that the Government honored the levy and refused to pay those proceeds either to Nickell or United; that United's performance bond was intended to pay for labor and materials only and did not contemplate the payment by the surety of Nickell's back taxes; that the use of the contract proceeds to pay the taxes would require the surety to pay them; and that the Government owed a sufficient amount of money on the contract which it should be required to pay either to United or to the appellees. Appellants prayed for an order dismissing the complaint.

The lower court in entering judgment for the appellees found and determined that the materials had been furnished to Nickell and used by him in the project; that the amounts claimed were due and owing to appellees and they should have judgment against Nickell and United for those amounts; and that the defense asserted by appellants was "* * * insufficient in Law." The sole issue on this appeal is whether the levy by the Government upon the funds due under the contract, to pay the...