United States v. D.L. Taylor Co.

• Decision Date: 25 October 1920
• Citation: 268 F. 635
• Parties: UNITED STATES, to Use of NORFOLK SOUTHERN RAILROAD CO. et al., v. D. L. TAYLOR CO. et al.
• Court: U.S. Court of Appeals — Fourth Circuit

268 F. 635

UNITED STATES, to Use of NORFOLK SOUTHERN RAILROAD CO. et al., v. D. L. TAYLOR CO. et al.

United States District Court, E.D. North Carolina.

October 25, 1920

[Copyrighted Material Omitted]

Small McLean, Bragaw & Rodman, of Washington, N.C., for plaintiff.

Edward R. Baird, Jr., and R. C. Dozier, both of Norfolk, Va., for interveners.

Julius F. Duncan, of Beaufort, N.C., and Manning & Kitchin, of Raleigh, N.C., for defendants.

CONNOR District Judge.

This action was brought by the United States of America for the use of the Norfolk Southern Railroad Company against the defendants D. L. Taylor & Co. and Fidelity Deposit Company of Maryland for the recovery of $22,000, alleged to be due from D. L. Taylor & Co. Jury trial was waived, and stipulation filed that the court find the facts.

Plaintiff alleged that D. L. Taylor & Co. on March 2, 1915, entered into a contract with the United States whereby said company undertook to construct for the United States, in accordance with certain plans and specifications, a breakwater and shore connection at Cape Lookout, N C.; that, pursuant to the provisions of the statute (section 6923, Comp. St. 1916), the contractors executed a bond in the penal sum of $315,000 with the defendant Fidelity & Deposit Company of Maryland surety, with the condition that said contractors should perform the covenants, conditions, and agreements contained in said contract, and 'should promptly make full payment to all persons supplying them labor or materials in the prosecution of the work provided for in said contract. ' The bond is specifically referred to and made a part of the complaint.

The work provided for by the contract of March 2, 1915, between the United States and D. L. Taylor 3 Co., was completed by the contractors on or about August 31, 1917, and final payment was made on or about September 14, 1917. This action was brought within the time prescribed by the statute.

The Norfolk Southern Railroad Company, pursuant to the provisions of a contract entered into with D. L. Taylor & Co., hauled large quantities of stone from the quarry near Neverson, N.C., to Morehead City, N.C. Plaintiff alleged that the contractors, D. L. Taylor & Co., were indebted to the said railroad company on account of the price stipulated for said service in the sum of $22,930, for which the railroad company demanded judgment against the bonding company. The Delaware Dredging Company and L. R. Connett intervened and filed claims, to which specific reference will be hereafter made.

The claim of the Norfolk Southern Railroad Company was adjusted and judgment rendered for the amount agreed upon.

Delaware Dredging Company.-- The Delaware Dredging Company in its intervening petition alleges that Mitchell & Seely made a contract with D. L. Taylor & Co. to dredge a channel from the railroad pier at Morehead City to deep water at Point Lookout, at which place the stone to be used in constructing the breakwater was to be brought on cars to Morehead City, so that the scows could be brought to the pier, and the stone loaded on them and towed to the site of the breakwater. Mitchell & Seely were to furnish the scows for the transportation of the stone. They sublet this contract to the Rickards Dredging Company, which performed the service, and assigned to the Delaware Dredging Company its claim for the amount due therefor.

The Delaware Dredging Company, assignee of the Rickards Dredging Company, filed a claim for removing 18,213 cubic yards of earth which, at the contract price of 18 cents per cubic yard, amounts to $3,278.34. The basis of this claim is that, in the performance of their contract with the United States, D. L. Taylor & Co. were to receive the stone at the quarry at or near a point on the Norfolk Southern Railroad, and convey it in cars to the pier of said company at Morehead City, N.C. It was to be removed from the cars at the pier, placed on scows, and from that point towed to Point Lookout, the site of the breakwater, a distance of about 12 miles, and dumped into the water.

The depth of the water at the pier was not sufficient to permit the scows to be towed to the pier in a position to receive the stone from the railroad cars. To meet this condition and overcome this difficulty, it was necessary to dredge the channel to a depth sufficient to enable the scows to be placed at the pier to receive the stone. While the defendant D. L. Taylor & Co. and the Bonding Company deny such necessity, the evidence amply sustains the allegation in that respect. The dredging was done along the side of the pier to deep water.

After the dredging the scows were taken to the pier, and the stone was loaded on it, and the scows towed to the breakwater. D. L. Taylor was present when the dredging was done. He pointed out the place at which it was done. That was the method adopted by D. L. Taylor & Co. for getting the stone from the railroad pier to the breakwater.

Defendants contend that because of a provision in the contract between Mitchell & Seely and D. L. Taylor & Co. that the contract should not be sublet without the written consent of D. L. Taylor & Co., the intervener Delaware Dredging Company cannot maintain its claim for the dredging. Whatever effect this provision may otherwise have had on the right of the intervener, the evidence shows conclusively that D. L. Taylor & Co. had notice of and knew that the work was being done by the Rickards Dredging Company, the assignors of the Delaware Company, and assented thereto. D. L. Taylor directed the place at which it was to be done, and used the channel after the dredging-- unloaded stone on the scows at the pier. When the Rickards Dredging Company demanded payment for the dredging Taylor made no other objection than that Mitchell & Seely had not approved the bill. D. L. Taylor says that 'the dredging was necessary in handling the stone from Morehead City. Seely advised us that he was going to have Rickards do the dredging there and we sent the telegram. ' The telegram was introduced. It is addressed to John A. Seely at New York. 'please answer immediately, will Rickards do pier dredging. ' Signed D. L. Taylor & Co. Taylor said it was sent 'for the express purpose of rushing the work. ' Seely had advised Taylor, before the telegram was sent, that he had engaged Rickards Dredging Company to do the work. It is not open to D. L. Taylor & Co., in the light of this evidence, to deny that they consented to the employment of the Rickards Dredging Company. This contention is without merit.

It is next insisted that if Mitchell & Seely had done the dredging, under contract with Taylor & Co., it does not come within the condition of the bond. This is the only serious question raised by the defendants. It is suggested that the work to be done, under the terms of the contract between the United States and D. L. Taylor & Co., was the 'construction of the breakwater, including shore connection at Cape Lookout, N.C.,' and that this language excludes from the condition of the bond labor and materials performed or furnished in preparing for the construction of the breakwater.

As this contention is directed to other claims made by the interveners, and, if successful, destroys the validity of several of them, it will be well to dispose of it at this time.

An elementary rule invoked in the construction of contracts requires the court to ascertain the intention of the parties, and to do this note must be taken of the purpose to be accomplished, the situation of the parties when they made, and the subject-matter of the contract.

We learn from an examination of the specifications which constituted the basis upon which the contract was made that the government desired to construct a breakwater at Cape Lookout, on the eastern coast of North Carolina, 12 miles east of Beaufort Inlet. The map of the locality was in the office of the United States engineer at Wilmington, N.C., and at the suboffice at Newbern, N.C., 'to be examined by prospective bidders. ' This map shows that Cape Lookout, the site of the proposed breakwater, is about 12 miles from Beaufort, on the Atlantic Coast; that the nearest point on the railroad from which stone of the character and size to be used could be loaded upon barges or scows is at Morehead City, about 2 miles from Beaufort. The breakwater was to be constructed of stone, extending from the high-water line, 2,200 feet, and connecting with the shore. The quantity of stone necessary for the construction of the breakwater was fixed at 1,230,000 tons. It was manifest, and well understood by the parties to the contract, that this quantity of stone, of the character required, could be found or quarried only at some place quite a distance from the work; that it could be placed at the breakwater only by a long haul over a railroad to some point from which it could be carried in barges or scows and towed to the breakwater. That it was to be delivered at the breakwater in vessels or barges is manifest from the Twenty-Seventh section of the specification, in which the character of the vessels, the manner of weighing in, etc., is specifically provided. That these conditions were all well understood is further shown by the fact that the quarry from which the stone could be secured was located at or near Neverson, a depot on the Norfolk Southern Railroad, about 120 miles from Morehead City.

In the light of these and other well-understood conditions, it does violence to the language used to confine the word 'construction' to the last act in the process putting the stone in the water, and exclude the essential steps for getting it to the breakwater. The language of the contract which is to be 'read into' the condition of the bond has been construed by the...