Pederson v. United States

• Decision Date: 14 October 1918
• Docket Number: 3164.
• Citation: 253 F. 622
• Parties: PEDERSON et al. v. UNITED STATES, for the Use of WASHINGTON IRON WORKS, et al.
• Court: U.S. Court of Appeals — Ninth Circuit

253 F. 622

PEDERSON et al. v. UNITED STATES, for the Use of WASHINGTON IRON WORKS, et al.

No. 3164.

United States Court of Appeals, Ninth Circuit.

October 14, 1918

Pederson to be called defendant, made a contract, dated September 8 1914, with the United States through an engineer officer of the army to furnish and install valve and electrical equipment for the operation of locks of the canal at Ballard Wash. The National Surety Company, also a defendant below became bondsman for Pederson to secure payment by Pederson to those who supplied labor or material; the bond being such as is required by Act of Congress (Act Aug. 13, 1894, c. 280, 28 Stat. 278, and as amended by Act Feb. 24, 1905, 33 Stat. 811 (Comp. St. 1916, Sec. 6923)), 'An act for the protection of persons furnishing material and labor for the construction of public works,' etc. After the making of the contract just referred to, Pederson sublet to the Washington Iron Works, also a plaintiff below, that part of the contract which provided for the furnishing of the valves and machinery, and to the Western Electric Company, a defendant below, the portion for furnishing the electrical equipment. Upon a settlement between the United States and Pederson, found by the District Court to have been on or after July 14, 1916, $5,411 was withheld from Pederson because of delay in completing the contract and on account of certain inspection charges.

In January, 1917, the Iron Works filed a suit in equity in the United States District Court in Washington against Pederson, contractor, and the National Surety Company, for $11,281.53 for material furnished under the contract with Pederson and for extras and interest. The defendants admitted furnishing valves and valve machinery, but denied that $11,281.53 was due. Pederson also pleaded the withholding of $5,411 for pumping and inspecting charges due to delay by the Iron Works, which sum he had held out from payments to the Iron Works, and he also claimed damages for negligence and delay and for moneys spent in correcting defects in work rejected by the United States engineer.

In July, 1917, the Western Electric Company (a defendant in error herein) intervened and sought to recover against Pederson for certain extras and balances alleged to have been left unpaid. Pederson and the Surety Company answered, denying the right of the Electric Company, upon the grounds that the complaint in intervention was not filed within one year after complete performance and settlement, denying that interest was recoverable, and pleading that for the extras no recovery could be had. It came about that before the action was brought to trial the Supreme Court, in Illinois Surety Co. v. Peeler, 240 U.S. 214, 36 Sup.Ct. 321, 60 L.Ed. 609, decided that an action under the act of Congress as amended, as hereinbefore cited, was not to be determined in equity, but is one at law, and the bill of exceptions herein shows that, when trial of the action was called, a jury was waived and the case was tried by the court, with the result that the Iron Works recovered a judgment against Pederson for $9,597.48 and against the Surety Company for $9,556.63, and the Western Electric Company recovered judgment for $1,934.80 against Pederson and for $1,724.71 against the Surety Company.

Writ of error was thereafter sued out by Pederson and wife and the Surety Company. The assignments are to the effect that the trial court erred: (1) In holding that there was a balance of $9,462.69 unpaid on the contract between Pederson and the Iron Works; (2) in denying the motion to dismiss the complaint of the Western Electric Company in intervention: (3) in holding that final payment was made by the United States to Pederson on July 14, 1916; (4) in sustaining claims of the Iron Works for extras; (5) in allowing interest; (6) in not holding the Iron Works liable to Pederson for $5,411.83, the sum deducted by the United States for inspection and pumping, and for damages.

Roberts, Wilson & Skeel and Lee Johnston, all of Seattle, Wash., for plaintiffs in error.

C. B. White, of Seattle, Wash., and H. W. Henderson, of New York City, for plaintiff in error National Surety Co.

R. A. Ballinger, Alfred Battle, R. A. Hulbert and Bruce C. Shorts, all of Seattle, Wash., for defendant in error Washington Iron Works.

Wright, Kelleher & Allen and George E. Wright, all of Seattle, Wash., for defendant in error Western Electric Co.

Before GILBERT and HUNT, Circuit Judges, and WOLVERTON, District judge.

HUNT Circuit Judge (after stating the facts as above).

The findings were made with great care and detailed reference to the evidence. In them reference is made to specific items in the specifications attached to the contract between Pederson and the Iron Works, and to the manner of payment by installments, as well as to the amounts payable under the contract. Various aggregate sums are set forth, and the balance on the contract unpaid by Pederson is found to be $9,462.69, together with $234.85 due for extras furnished. The court disallowed Pederson's claim of $5,411.83, offset, except in certain items, and found that Pederson broke his contract with respect to certain items. The court fixed July 14, 1916, or afterwards, as the time of the full completion of the work and final settlement therefor, and found that no suit upon the contract was commenced by the United States, that action by defendant in error was begun within one year from the completion of the work and final settlement therefor, and that the intervener filed its complaint in due time as required by the act of Congress heretofore cited.

The claim of the intervener Electric Company was also carefully examined and included in the findings, and the court, after referring to the provisions of the contract between the company and Pederson, found that the company fully performed, and that under the contract interest from August 25, 1914, became due upon the purchase price of the materials furnished, and that certain extra material was furnished under an agreement that the purchase price therefor should bear interest from 30 days after the date of shipment.

From the foregoing history of the case it is apparent that, trial of the issues having...