Peterson v. United States

• Decision Date: 14 April 1941
• Docket Number: No. 8507.,8507.
• Citation: 119 F.2d 145
• Parties: PETERSON et al. v. UNITED STATES, for Use of MARSH LUMBER CO.
• Court: U.S. Court of Appeals — Sixth Circuit

119 F.2d 145 (1941)

PETERSON et al. v. UNITED STATES, for Use of MARSH LUMBER CO.

No. 8507.

Circuit Court of Appeals, Sixth Circuit.

April 14, 1941.

C. W. Sellers, of Cleveland, Ohio (C. W. Sellers and Thompson, Hine & Flory, all of Cleveland, Ohio, and R. H. Treffinger and Henderson, Burr, Randall & Porter, all of Columbus, Ohio, on the brief), for appellants.

C. A. Fisher, of New Philadelphia, Ohio (C. A. Fisher and Fisher, Limbach, Smith & Renner, all of New Philadelphia, Ohio, and Richard T. Rector and Wilson & Rector, all of Columbus, Ohio, on the brief), for the United States, for Use of March Lumber Co., and Pure Oil Co., appellees.

D. Curtis Reed and Jos. F. Hogan, both of Columbus, Ohio, Carl Phares, of Cincinnati, Ohio, and Charles B. Johnson and Johnson & Johnson, all of Clarksburg, W. Va., on the brief, for Atlas Powder Co., Dravo-Doyle Co., and Lehigh Portland Cement Co., appellees.

Before SIMONS, HAMILTON, and MARTIN, Circuit Judges.

HAMILTON, Circuit Judge.

This is an action under the Heard Act, 40 U.S.C.A. § 270. Appellants are the contractor and his surety, respectively. Appellees are mechanics, laborers or materialmen of a subcontractor.

On June 3, 1933, the Muskingum Watershed Conservancy District was organized as a body corporate and political subdivision of Ohio, under authority of the State Conservancy Act (Sections 6828-1 to 6828-79 of the Ohio General Code). The purpose of its organization was flood prevention and regulation of the flow of streams in the drainage basin of Muskingum River, which empties into the Ohio River, both streams being navigable.

On March 29, 1934, the Federal Emergency Administrator of Public Works of the United States entered into an agreement with the Conservancy District, under the authority of Section 202 of Title 2 of the National Industrial Recovery Act, approved June 16, 1933, 48 Stat. 195, 40 U.S.C.A. § 402 and Section 23 of the Conservancy Act of Ohio, for execution and operation of the Project and Official Plan of the Conservancy District for flood control and improvement of navigation on the two rivers involved. Under said agreement the United States Corps of Engineers were to assist in the preparation of the official plan, the construction of flood control reservoirs and the relocation of public utilities affected by the construction and operation of the reservoirs necessary in carrying out the plan. The Conservancy District was to obtain the lands and easements necessary for the project and were to maintain, operate and protect the same in such manner as the Chief of the Corps of Engineers of the United States decided would best serve the purposes of navigation and flood control on the Muskingum and Ohio Rivers.

The official plan and project included the Wills Creek Dam and Reservoir, located on Wills Creek in Guernsey County, Ohio, and a tributary of the Muskingum River. This dam and reservoir is gate controlled and has a spillway elevation of 779 feet above sea level. The Pennsylvania Railroad Compay had some tracks in the reservoir area below the spillway elevation of the dam which it was necessary to relocate to prevent their being flooded. The construction of Kimbolton Tunnel was a part of the railroad project.

For the purpose of effecting the relocation of the railroad tracks and roadbed, the United States of America, on June 27, 1935, entered into a formal contract with appellant Edward Peterson for the construction of the new railroad roadbed and tunnel in which contract he agreed to furnish the necessary labor and material and to prosecute and complete the work according to plans, surveys and specifications prepared by the War Department between Station 1332/24.6 and Station 1506/48.64. Simultaneously with the execution of the contract, appellant executed to the United States of America the usual penal bond pursuant to the requirements of Title 40 U.S.C.A. § 270 in the sum of $210,462.63, with appellant, American Surety Company of New York, as surety thereon. The conditions of the obligation are found in the margin.¹

Appellant Peterson subcontracted a part of the work to Millson's Construction Company, which company defaulted in payments for supplies and services to mechanics, laborers and materialmen and, as a result, this action was instituted. Appellants answered and denied all liability on the bond on the sole ground that the United States of America did not at any time and does not now own any of the lands, buildings or works which were the subject matter of the contract between appellant Peterson and the United States and that the work done or to be done under the contract was neither public buildings nor public works within the meaning of the Heard Act. The court held the answers insufficient; hence this appeal, with this single issue presented.

The Heard Act (of August 13, 1894, as amended by Act of February 24, 1905, 40 U.S.C.A. § 270) provides that any person contracting with the United States for construction of a public building or prosecution and completion of any public work, shall execute bond, conditioned that the contractor shall promptly make payment to all persons who supply him with labor and materials for the prosecution of the work, and gives to all such persons the right to intervene in a suit on the bond.

The term "public work" as used in the act is without technical meaning and is to be understood in its plain, obvious and rational sense. The Congress was...