United States of America For the Use and Benefit of Alexander Bryant Company v. New York Steam Fitting Company

• Decision Date: 07 December 1914
• Docket Number: No. 67,67
• Citation: 35 S.Ct. 108,59 L.Ed. 253,235 U.S. 327
• Parties: UNITED STATES OF AMERICA FOR THE USE AND BENEFIT OF ALEXANDER BRYANT COMPANY, Plff. in Err., v. NEW YORK STEAM FITTING COMPANY and the Title Guaranty & Surety Company
• Court: U.S. Supreme Court

235 U.S. 327

35 S.Ct. 108

59 L.Ed. 253

UNITED STATES OF AMERICA FOR THE USE AND BENEFIT OF ALEXANDER BRYANT COMPANY, Plff. in Err.,

v NEW YORK STEAM FITTING COMPANY and the Title Guaranty & Surety Company.

No. 67.

Argued November 9, 1914.

Decided December 7, 1914.

Mr. George B. Class for plaintiff in error.

[Argument of Counsel from Page 328 intentionally omitted] Messrs. John R. Halsey and Adrian T. Kiernan for defendants in error.

[Argument of Counsel from Page 329 intentionally omitted] Mr. Justice McKenna delivered the opinion of the court:

The United States, suing for the use of the Alexander Bryant Company, plaintiff in error, was plaintiff in the court below, and the defendants in error defendants.

The complaint alleged the following facts: The New York Steam Fitting Company entered into a contract with the United States for the mechanical equipment of the New York custom house at New York. It gave bond for the faithful performance of its contract with defendant in error the Title Guaranty & Surety Company, as surety. One of the conditions of the bond was that the Steam Fitting Company would, among other things, promptly make a payment to all persons supplying it labor and material in the prosecution of the work contemplated by the contract of the Steam Fitting Company with the United States.

The bond was accepted and the work undertaken and duly completed on or about February 19, 1908, the Alexander Bryant Company having, in pursuance of a contract with the Steam Fitting Company, furnished all the materials and performed all of the work, upon which there is a balance due to the Bryant Company of $5,431.18. Under the terms of the agreement between it and the Steam Fitting Company it should have been paid as the government paid the former; and as final payment was made by the government February 15, 1908, interest is demanded.

No action, it is alleged, had been brought by the United States against defendant within six months after, nor had one year elapsed since, the performance and final settle- ment of the contract by the New York Steam Fitting Company prior to the commencement of this action.

It is alleged that, in pursuance of the requirements of the act of Congress of August 13, 1894 (28 Stat. at L. 278, chap. 280), as amended February 24, 1905 (33 Stat. at L. 811, chap. 778, Comp. Stat. 1913, § 6923), under and by virtue of which this action is brought, complainant served personal notice of the pendency of this action upon all known creditors, informing them of their right to intervene as the court might order, and in addition thereto published the notice in a newspaper of general circulation in the city, county, and state of New York for three successive weeks, the last publication of which was three months before the time limited therefor as in the acts of Congress provided.

A bill of particulars was furnished defendants, of which the following is a copy:

'The plaintiff as and for a bill of particulars, demanded by the Title Guaranty & Surety Company herein avers—

'That, pursuant to the requirements of the acts of Congress under which this action is brought, the plaintiff herein made personal service of notice of the pendency of this action upon all known creditors of the New York Steam Fitting Company as follows:

'On Messrs. Peet and Powers, November 21st, 1908; on Hermann & Grace, November 21st, 1908; on Henry R. Worthington, November 19th, 1908; on John Simmons Company, November 20th, 1908; on Cutler Hammer Company, November 19th, 1908; on Rob't A. Keasby Company, November 20th, 1908.

'That under date of November 21st, 1908, Messrs. Hardy & Shellabarger, attorneys for New York Steam Fitting Company and the Title Guaranty & Trust Company of Scranton, Pennsylvania (now the Title Guaranty & Surety Company), stipulated with the attorney for the plaintiff as follows:

"It is hereby consented on the part of the defendants that defendants waive any failure on the part of the plaintiff to notify creditors under the third proviso of the statute, provided no more such notices are sent.'

'That on the 5th day of November, 1908, and on each day thereafter to and including November 25th, 1908, there was published in the New York press of New York city, New York, a notice of the pendency of this action, addressed to all known creditors of the defendant, the New York Steam Fitting Company. Attached hereto and forming a part of this bill of particulars is a copy of the form in which personal notice of the pendency of this action was served upon all known creditors of the New York Steam Fitting Company, and a copy of the notice which was given by publication in the New York press to aforesaid creditors. Dated, New York, December 7th, 1909.'

Copies of the notices are inserted in the margin. It

'Please take notice that the abovenamed Alexander Bryant Company has commenced an action in the name of the United States of America under the provisions of the act of Congress of August 13th, 1894 (as amended by act of Congress of February 24th, 1905), to recover a judgment against the defendant New York Steam Fitting Company and its surety, the Title Guaranty & Trust Company of Scranton, Pennsylvania, for a sum of money alleged to be due and owing to the aforesaid Alexander Bryant Company for work, labor, materials, and services furnished as subcontractors under the contract and bond entered into by the New York Steam Fitting Company for the mechanical equipment of the new customhouse at New York city, New York, in which bond the defendant, the Title Guaranty & Trust Company of Scranton, Pennsylvania, is joined as surety.

'As required by the express provisions of the aforementioned acts of Congress, and as one of the creditors of the New York Steam Fitting Company, under aforesaid contract, you are hereby notified of your right to intervene and be made an additional party plaintiff in this action, as the court may order, so as to have the rights and claims of any and all existing creditors under said contract and bond adjudicated in one and the same action.

'Dated, New York, Nov. 2d, 1908.'

'Pursuant to the requirements of an act of Congress of August 13th, 1894, and of February 24th, 1905, amendatory thereof, notice is hereby given to all creditors of the above named defendant New York Steam Fitting Company under the contract between the plaintiff and the said lastnamed defendant (and the codefendant as their surety) for work incident to the construction of the customhouse, that the above entitled action has been instituted upon the bond of the defendant-contractor, and against said surety, and that any creditor may file his claim in this action and be made a party herein as in said acts of Congress provided.

'New York, October 16th, 1908.'

Both notices were signed by plaintiff's attorney was stipulated that certain of the creditors who were served with personal notice appeared in the action and filed pleas of intervention. The action was subsequently discontinued as to them, they having been settled with by the Surety Company.

The answer of the Surety Company is unimportant except so far as it raises the issue, which is the crux of the case, whether the action was brought in time, or whether proper notice of it was given to other creditors.

The answer of the Steam Fitting Company is also unimportant.

The case, by consent of the parties, was referred to a referee, upon whose report judgment was to be entered 'as if said cause had been heard before the court.'

The referee found and reported the basic facts of liability of the Surety Company, but found besides that the action was not commenced in time, as provided by the acts of Congress, nor was notice given to creditors as required, and therefore directed a judgment dismissing the complaint. A judgment was subsequently entered by the court after motion for a new trial was denied by the referee.

The following facts appear from the report of the referee: The date of final settlement between the United States and the Steam Fitting Company was February 19, 1908, and to show compliance with the provisions of the act of Congress set out below, the Bryant Company offered evidence of the publication of notice to creditors in the New York press, beginning November 5, 1908, and also introduced in evidence a stipulation between it and the defendants made November 21, 1908, by which defendants' time to move of plead was extended, and by which it was stipulated as follows:

'It is hereby consented on the part of the defendants that defendants waive any failure on the part of the plaintiff to notify creditors under the third proviso of the statute, provided no more such notices are sent.'

Prior to the execution of the stipulation the Bryant Company had personally served all known creditors with notice in the form hereinbefore given. Notwithstanding the stipulation, notice by publication continued for the full twenty-one days, to and including November 25, 1908.

The Surety Company moved to strike out the evidence of publication as incompetent, irrelevant, and immaterial on the grounds: (1) That there was no order of the court obtained for the giving of the notice. (2) That under the act of Congress the last publication of such a notice must expire three months before the end of the year after the final completion of the contract; that is, on November 18th, 1908, whereas the last publication of the notice offered in evidence was on November 25, 1908, seven days beyond the time.

The motion was based on certain provisos of the act of Congress already referred to. The act is entitled, 'An Act for the Protection of Persons Furnishing Materials and Labor for the Construction of Public Works.' It provides for the execution of a bond by any person entering into any formal contract with the United States for any public work, and that in any action instituted by the United States any person who has furnished materials or labor to the contractor may...