United States Fidelity Guaranty Company v. United States of America

• Decision Date: 25 February 1907
• Docket Number: No. 173,173
• Citation: 51 L.Ed. 516,27 S.Ct. 381,204 U.S. 349
• Parties: UNITED STATES FIDELITY & GUARANTY COMPANY, Plff. in Err., v. UNITED STATES OF AMERICA, Suing for the Benefit of James S. Kenyon, Doing Business as Burrows & Kenyon
• Court: U.S. Supreme Court

204 U.S. 349

27 S.Ct. 381

51 L.Ed. 516

UNITED STATES FIDELITY & GUARANTY COMPANY, Plff. in Err.,

v UNITED STATES OF AMERICA, Suing for the Benefit of James S. Kenyon, Doing Business as Burrows & Kenyon.

No. 173.

Argued January 18, 1907.

Decided February 25, 1907.

By an act of Congress approved August 13th, 1894, entitled 'An Act for the Protection of Persons Furnishing Materials and Labor for the Construction of Public Works,' it was provided: 'That hereafter any person or persons entering into a formal contract with the United States for the construction of any public building, or the prosecution and completion of any public work, or for repairs upon any public building or public work, shall be required, before commencing such work, to execute the usual penal bond, with good and sufficient sureities, 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; and any person or persons making application therefor, and furnishing affidavit to the department under the direction of which said work is being, or has been, prosecuted, that labor or materials for the prosecution of such work has been supplied by him or them, and payment for which has not been made, shall be furnished with a certified copy of said contract and bond, upon which said person or persons supplying such labor and materials shall have a right of action, and shall be authorized to bring suit in the name of the United States for his or their use and benefit against said contractor and sureties, and to prosecute the same to final judgment and execution: Provided, That such action and its prosecutions shall involve the United States in no expense. Sec. 2. Provided, that in such case the court in which such action is brought is authorized to require proper security for costs in case judgment is for the defendant.' 28 Stat. at L. 278, chap. 280, U. S. Comp. Stat. 1901, p. 2523.

On the same day—August 13th, 1894—Congress passed an act providing that whenever any recognizance, stipulation, bond, or undertaking conditioned for the faithful performance of any duty, or for doing or refraining from doing anything in such recognizance, stipulation, bond, or undertaking specified, is, by the laws of the United States, required or permitted to be given with one or more sureties, it should be lawful to accept such instrument from a corporation having power to guarantee the fidelity of persons holding positions of public or private trust, and to execute and guarantee bonds and undertakings in judicial proceedings. The act provided that any surety company doing business under the provisions of that act 'may be sued in respect thereof in any court of the United States which has now or hereafter may have jurisdiction of actions or suits upon such recognizance, stipulation, bond, or undertaking, in the district in which such recognizance, stipulation, bond, or undertaking was made or guaranteed, or in the district in which the principal office of such company is located.' 28 Stat. at L. 279, § 5, chap. 282. U. S. Comp. Stat. 1901, p. 2316.

Proceeding under the above acts the United States, in 1899, made a written contract with one Churchyard to furnish labor, materials, tools, and appliances for the construction of a public building, taking from him the required bond with the United States Fidelity & Guaranty Company, a corporation, as surety.

The present action, brought in the circuit court on that bond, was by the United States, 'suing herein for the benefit and on behalf of James S. Kenyon,' who furnished a contractor, for use in the construction of the proposed government building, materials of the value of $66.05, for which the latter neglected and refused to pay. Damages to the amount of $500 were claimed in the declaration.

The defendant, the United States Fidelity & Guaranty Company, pleaded that it did not owe the sum demanded. The plaintiff introduced testimony, but the defendant introduced none, and it appearing upon the face of the declaration that the value of the matter in dispute was less than $2,000, it moved that the action be dismissed for want of jurisdiction in the circuit court. That motion was denied, and judgment for $206.47 was entered against the Fidelity & Guaranty Company for the use and benefit of Kenyon. United States v. Churchyard, 132 Fed. 82.

Messrs. Seeber Edwards,with whom Mr. George S. Cooper and Mr. James E. Smith were on brief, for plaintiff in error:

George S. Cooper, and James E. Smith for plaintiff in error. [Argument of Counsel from pages 352-353 intentionally omitted] Mr. Edward D. Bassett for defendant in error.

[Argument of Counsel from pages 352-353 intentionally omitted] Mr. Justice Harlan delivered the opinion of the court:

This case is here upon a certificate as to the original jurisdiction of the circuit court of the United States of this action.

A circuit court of the United States, as provided in the judiciary acts of 1887, 1888, may take original cognizance of any suit, at common law or in equity, arrising under the laws of the United States, if the value of the matter in dispute exceeds $2,000, exclusive of interest and costs. [24 Stat. at L. 552, chap. 373] 25 Stat. at L. 433, chap. 866, U. S. Comp. Stat. 1901, p. 508. But if, within the meaning of that act, the United States is the plaintiff in the action, then jurisdiction exists in a circuit court without regard to such value. United States v. Sayward, 160 U. S. 493, 40 L. ed. 508, 16 Sup. Ct. Rep. 371; United States v. Shaw, 3 L.R.A. 232, 39 Fed. 433; United States v. Kentucky River Mills, 45 Fed. 273; United States v. Reid, 90 Fed. 522.

The contention of the Fidelity Company is that the government, in this case, is to be beemed a nominal party only, its name being used as plaintiff simply under the authority of the above act of 1894, chap. 280. In support of this position our attention is called to the following, among other cases: Browne v. Strode, 5 Cranch, 303, 3 L. ed. 108; McNutt v. Bland, 2 How. 9, 14, 11 L. ed. 159, 161; Maryland use of Markley v. Baldwin, 112 U. S. 490, 28 L. ed. 822, 5 Sup. Ct. Rep. 278; Stewart v. Baltimore & O. R. Co. 168 U. S. 455, 42 L. ed. 537, 18 Sup. Ct. Rep. 105.

Browne v. Strode was a suit in the circuit court for the district of Virginia in which the persons named in the declara- tion as plaintiffs were justices of the peace, all citizens of Virginia. The suit was on a bond given by an executor in conformity with a Virginia statute, and was for the recovery of a debt due from the testator in his lifetime to an alien, a British subject. The defendant was a citizen of Virginia. This court held that the circuit court had jurisdiction, notwithstanding the justices and the defendant were all citizens of the same state. This was, we assume, upon the ground that the justices were nominal parties only, while the beneficial party was an alien, and the defendant a citizen of the state in which the suit was brought.

McNutt v. Bland was a suit upon a bond given by a sheriff and running to the governor of the state, conditioned for the faithful performance of the duties of his office. The statute authorized suit to be brought and prosecuted from time to time at the cost of any party injured until the whole amount of the penalty was recovered. The suit was brought in the name...