U.S. v. U.S. Fid. & Guar. Co.

• Decision Date: 27 February 1909
• Citation: 82 Vt. 94,71 A. 1106
• Court: Vermont Supreme Court
• Parties: UNITED STATES, to Use of ELIAS LYMAN COAL CO. v. UNITED STATES FIDELITY & GUARANTY CO.

71 A. 1106

82 Vt. 94

UNITED STATES, to Use of ELIAS LYMAN COAL CO.

v. UNITED STATES FIDELITY & GUARANTY CO.

Supreme Court of Vermont. Chittenden.

Feb. 27, 1909.

Exceptions from Chittenden County Court; George M. Powers, Judge.

Action by the United States of America, for use of the Elias Lyman Coal Company, against the United States Fidelity & Guaranty Company.Judgment for plaintiff, and defendant excepts.Reversed and remanded.

Argued before ROWELL, C. J., and TYLER, MUNSON, and WATSON, JJ.

Horace H. Chittenden and Max L. Powell, for plaintiff.

E. M. Horton and J. E. Cushman, for defendant.

WATSON, J. Chapter 280 of the United States Statutes at Large for 1894 provides: "That hereafter any person or persons entering into a formal contract with the United States for the construction of any public building, * * * shall be required before commencing such work to execute the usual penal bond, with good and sufficient sureties, with the additional obligations that such contractor or contractors shall promptly make payments to all persons supplying him or them labor and materials in the prosecution of the work provided for in such contract," etc.ActAug. 13, 1894, 28 Stat. 278(U. S. Comp. St.1901, p. 2523).

On March 16, 1903, E. H. Denniston Company entered into such a contract in writing with the government to "furnish all labor and materials necessary for the construction of the following buildings at Fort Ethan Allen," this state, namely, one bachelor officer's quarter, two barracks, and two stables, "all in accordance with the plan and specifications hereto attached and which are made a part of this agreement."Pursuant to the requirements of the statute, the bond on which this action is based was executed to the government by the contractor as principal and the defendant as surety.The use plaintiff, the Elias Lyman Coal Company, furnished coal to the contractor at the times, in the amounts, and at the prices charged in the plaintiff's specifications, it having been delivered to the contractor at Fort Ethan Allen while the company was constructing the buildings named in the contract.Subject to defendant's objection and exception on the ground that the coal thus furnished was not "material" within the meaning of the bond in suit and of the federal statutes, evidence was introduced tending to show that the coal mentioned was furnished to the contractor at the place, on the dates, and in the amounts specified, for the agreed price charged; that the coal was used in the heating plants and three of the buildings named in the contracts then being constructed by the contractor; that at the time the coal was used work of plastering, laying floors, putting on interior finish, painting, and varnishing was being done in said buildings.No evidence was introduced by the plaintiff tending to show that any other use was made of the coal, and no evidence was introduced by the defendant.The same question in effect is raised by exception to the overruling of defendant's motion for a verdict at the close of the evidence.An exception on the same ground was also allowed the defendant to the court's ordering a verdict for the plaintiff.

As before seen, the terms of the contract are that the contractor shall furnish "materials for the construction of" the buildings named therein, "all in accordance with the plans and specifications" attached to and made a part of the agreement.The condition of the bond, stating that part of the contract to be for furnishing "materials necessary for the construction of," etc.—the same language used in the contract—is for the performance of "all and singular the covenants, conditions, and agreements in and by said contract agreed and covenanted by said E. H. Denniston Co. to be observed and performed according to the true intent and meaning of said contract, * * * and shall promptly make full payments to all persons supplying it labor or materials in the prosecution of the work provided for in said contract," etc.Here are two distinct and separate covenants, the former for the purpose of securing to the government the performance of the contract for the construction of the buildings, and the latter solely for the protection of persons supplying labor and materials in the prosecution of the work."These covenants are to be read together, and the latter interpreted in the light of the former."United States F. & G. Co. v. United States, 191 U. S. 416, 24 Sup. Ct. 142, 48 L. Ed. 242.The same court later said that in construing the latter obligation we must not overlook the manifest purpose of the statute to require that labor and material actually contributed to the construction of public buildings shall be paid for, and to provide security to that end; also, that the language used in that obligation, read in the light of the statute, looks to the protection of those who supply the labor or materials provided for in the contract.United States, for Use of Hill, v. American Security Co., 200 U. S. 107, 26 Sup. Ct. 168, 50 L. Ed. 437.

Article 11 of the contract is indicative of the intention of the parties thereto in this respect.It reads: "That all materials and workmanship shall be subject during the entire progress of the construction to the inspection and acceptance or rejection of the officer in charge or his agent, and any material or work not accepted shall be replaced by the said E. H. Denniston Co., at their own expense; the rejected materials to be immediately removed from the premises."Does not this article strongly show that the word "materials" as used in the contract has reference to such materials only as are within the purview of that instrument?For what purpose would such a provision respecting other materials be there made?

In City of Philadelphia v. Malone, 214 Pa. 90, 63 Atl. 539, Malone & Co. entered into a contract with the plaintiff city to excavate and construct certain reservoirs.The agreement required the contractors to furnish all the materials and perform all the labor necessary in constructing the reservoirs in strict and exact accordance with the proposal and specifications attached to and made a part thereof.A bond was given by the contractors as required by a city ordinance.The use plaintiff furnished coal to a subcontractor excavating one of the reservoirs, which coal was used for generating steam to run the steam shovel and the locomotive used in excavating and removing dirt in constructing the reservoir.The bond on which the suit was brought,...