Price v. HL COBLE CONSTRUCTION COMPANY

• Decision Date: 08 May 1963
• Docket Number: No. 19951.,19951.
• Citation: 317 F.2d 312
• Parties: W. Harrison PRICE, Appellant, v. H. L. COBLE CONSTRUCTION COMPANY et al., Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

317 F.2d 312 (1963)

W. Harrison PRICE, Appellant, v. H. L. COBLE CONSTRUCTION COMPANY et al., Appellees.

No. 19951.

United States Court of Appeals Fifth Circuit.

May 8, 1963.

Roderick M. MacLeod, Jr., Birmingham, Ala., Leader, Tenenbaum, Perrine

& Swedlaw, Birmingham, Ala., of counsel, for appellant.

Kenneth Perrine, Birmingham, Ala., for appellees.

Before TUTTLE, Chief Judge, and POPE^* and JONES, Circuit Judges.

POPE, Circuit Judge.

The appellee H. L. Coble Construction Company (Coble), as prime contractor, entered into a contract with Housing Authority of the City of Bessemer, Alabama, for the construction of a multiple dwelling project known as Low Rent Housing Project No. Alabama 125-1-12. The applicable Alabama statute, Code of Alabama 1940, Tit. 50, § 16, provided that any person entering into such a contract with the State or any municipal corporation should be required to execute a performance bond "and in addition thereto, another bond with good and sufficient surety, payable to the state, county or municipal corporation or subdivision, letting the contract, * * * with the obligation that such contractor or contractors shall promptly make payments to all persons supplying him or them with labor, materials, feed-stuffs or supplies for or in the prosecution of the work * * *; and any person, firm or corporation that has furnished labor, materials feed-stuffs or supplies for or in the prosecution or repair of any public building or public work, * * * and payment for which has not been made, shall be authorized to institute an action upon said bond in his or their name or names and to have their rights and claims adjudicated in such action and judgment rendered thereon * * *."

Coble furnished the bonds required by the statute and the other appellees above named executed the bonds as sureties. Coble then entered into subcontracts with Bessemer Materials, Inc., (Bessemer) whereby the latter undertook to complete certain specified parts of the work contracted for by Coble and to furnish all materials, equipment and labor required in connection therewith.

This action is concerned with the furnishing of labor and materials in the construction of the roofs of the buildings in the housing project from the plate-line up. This included the construction of roofs on some 288 buildings.

After Bessemer had completed the work of constructing the roofs on the first of such 288 units, it was ascertained that the cost of labor alone for the installation of the materials, which included the installation of trusses, decking and roof frame, amounted to a sum in excess of $600. After that first unit was so constructed Bessemer sought to secure the furnishing of such labor at a lesser cost and entered into an agreement with appellant Price, which agreement is the basis of the action in the court below in which Price sought to recover upon the statutory bonds thus furnished by Coble.

Price, who was an experienced construction worker with special experience in building residences and in framing and constructing roofs, was asked by Bessemer to estimate the cost of furnishing the labor only for this roof work. He turned up with an estimate of $300 per unit. As Bessemer had originally estimated these labor costs at $352 to $399 per unit, Price's estimate of $300 per unit was extremely satisfactory to it. Price was instructed to go ahead with the work and to select and employ carpenters and workmen to provide the labor. He was to proceed until he had completed roofs on some thirty units, with the understanding that, if the work on the thirty units were satisfactory to Bessemer, he should proceed with the completion of the remainder of all 288 units.

Price was to supervise this work and was paid foreman's wages calculated at $3.37½ per hour for a 40-hour week. Price testified that it was the agreement that if the total cost of this labor on these roofs came to less than $300 per unit, he, Price, was to be paid by Bessemer the difference between this cost and what the $300 per unit would have amounted to. The wages were to be paid by Bessemer on the basis of the payroll sheets kept by Price and furnished to Bessemer. There was no undertaking by Price to keep within the $300 figure and, so far as the evidence shows, if the total cost had amounted to $350 or $400 per unit, Bessemer would have been responsible therefor.

After the first 30 buildings had been completed, it was ascertained that the labor costs on those buildings were close to $300 per unit. Price was then instructed to go ahead and complete the 288 units, and he did so. There is no question but that the labor was performed and completed in satisfactory fashion.

At the time the agreement was made between Price and Bessemer, a writing was drawn up which referred to the agreement and set forth portions of what had been agreed upon. That writing is set out in the margin.¹ It is obviously not complete. Its effect we shall discuss hereafter.

The record shows that in carrying out his supervisory duties in connection with this work, Price was required to work early in the morning and late at night beyond the time which would normally be required of him as a foreman. He worked Saturdays and evenings; his pay as foreman did not include any overtime and it was calculated on the basis of an eight hour day and 40 hour week. When he made up the payroll sheets they were delivered to Bessemer who in turn submitted them every week to Coble.

The agreement between Price and Bessemer was made early in March, 1960. Price's work was finally completed the last of July. During this period of time Bessemer failed and ultimately went into bankruptcy. Beginning in May Coble was obliged to take over the work and it advanced the money for the payrolls from that time on. Although Price had no direct dealings with Coble, Coble's superintendent in charge of the work testified that he had learned from Price during the progress of the work that he, Price, had "an agreement of some sort with Bessemer Materials on a profit sharing basis." Coble had also received from Price a letter dated March 22, 1960, (which is referred to more fully hereafter) which was signed "Harrison Price, Roof Framing Man."

The evidence on behalf of Price was that the total labor costs on the entire 287 units amounted to $16,208.25 less than the total of $300 times 287. Price asked for judgment for this sum together with interest, attorneys' fees and costs. Upon trial of the action before a jury, the court at the conclusion of all the evidence, directed a verdict for the defendants and judgment against the plaintiff and in favor of the defendants was entered thereon. This appeal followed.

The theory upon which appellant asserts that he was entitled to recover is a simple one. Referring to the Alabama statute he says that he is a person "that has furnished labor * * * for or in the prosecution" of a "public building or public work * * * payment for which has not been made." In arguing their respective positions here, both the appellant and the appellees have agreed that the Alabama statute was patterned upon the Miller Act, 40 U.S.C. §§ 270a-270d; that the purposes of the Miller Act and the Alabama statute are identical, and that they should be interpreted in the same manner. They agree that cases decided under the Miller Act are applicable to cases under the Alabama statute; and both parties rely heavily upon Miller Act decisions in undertaking to support their respective positions.

The appellee first contends that the judgment in its favor was compelled because Price was a subcontractor under a subcontractor, or as appellee put it, a sub-subcontractor. It argues that such a person is not covered by the provisions of the Alabama statute. To support this position it relies heavily upon Hardaway v. National Surety Co., 211 U.S. 552, 29 S.Ct. 202, 53 L.Ed. 321, and MacEvoy Co. v. United States for Use and Benefit of Calvin Tomkins Co., 322 U.S. 102, 64 S.Ct. 890, 88 L.Ed. 1163.

The Hardaway case involved application of an earlier Act which preceded the present Miller Act. The earlier Act, called the Heard Act, was not in any respect here relevant different from the Miller Act. The bond in that case related to a contract for the construction of a lock and dam in Alabama, and Hardaway and his partner were denied recovery upon the bond. The court said that "they were not subcontractors in our view who undertake to furnish labor and materials upon a contract with the original contractor."

However, that case cannot aid the position of the appellees here for Hardaway and his partner obviously were not persons who furnished labor or materials since their agreement was one primarily to furnish funds to finance the completion of work under the contract. We can see no resemblance between the facts in the Hardaway case and the case now before us.

In the MacEvoy case, MacEvoy entered into a contract with the United States for the construction of a housing project and furnished the bonds required by the Miller Act. MacEvoy purchased building materials for use in the construction of the work from James H. Miller & Company. Miller in turn purchased these materials from the Calvin Tompkins Company. It failed to pay Tompkins and Tompkins caused the action to be brought against the prime contractor and his bondsman.

The Court noted that § 2(a) of the Act, 40 U.S.C. § 270b(a), contained the following proviso: "Provided, however, That any person having direct contractual relationship with a subcontractor but no contractual relationship express or implied with the contractor furnishing said payment bond shall have a right of action upon the said payment bond upon giving written notice to said contractor within ninety days from the date on which such person did or performed the last of the labor or furnished or supplied the last of the material for which such claim is made." (p. 106 64 S.Ct. p. 893) It held that the meaning of...