United States v. Fleisher Engineering & Const. Co.

• Decision Date: 13 November 1939
• Docket Number: No. 75.,75.
• Citation: 107 F.2d 925
• Parties: UNITED STATES, for Use and Benefit of HALLENBECK, v. FLEISHER ENGINEERING & CONSTRUCTION CO. et al.
• Court: U.S. Court of Appeals — Second Circuit

107 F.2d 925 (1939)

UNITED STATES, for Use and Benefit of HALLENBECK, v. FLEISHER ENGINEERING & CONSTRUCTION CO. et al.

No. 75.

Circuit Court of Appeals, Second Circuit.

November 13, 1939.

Gibbons, Pottle & Pottle, of Buffalo, N. Y. (Frank Gibbons, of Buffalo, N. Y., of counsel), for defendants-appellants.

Edwin J. Culligan, of Buffalo, N. Y., for plaintiff-appellee.

Before L. HAND, SWAN, and AUGUSTUS N. HAND, Circuit Judges.

AUGUSTUS N. HAND, Circuit Judge.

George S. Hallenbeck, doing business under the name of Hallenbeck Inspection & Testing Laboratory, performed certain work during the months of March, April and May, 1937, in inspecting and testing materials on the Kenfield Housing Project No. H-6703 at Buffalo under an agreement with Easthom-Melvin Co., Inc., whereby he was to be paid by the latter $1,012.87.

The United States acting through the Federal Administrator of Public Works entered into a contract with Fleisher Engineering & Construction Co. and Joseph A. Bass (doing business as Joseph A. Bass Co.) whereby the latter were to furnish all the labor and materials and perform all work required for the construction of the superstructure for the Housing Project. The Easthom-Melvin Co., Inc., was a subcontractor of these concerns, and the labor performed by Hallenbeck under his agreement with the Easthom-Melvin Co., Inc., was required to be performed by Fleisher Engineering & Construction Co. and Bass under their contract with the United States and actually was performed with the knowledge, consent and approval of the main contractors. The Easthom-Melvin Co., Inc., neglected to pay Hallenbeck the amount which was admittedly owing to him. Thereupon, within ninety days after the date when payment became due, he wrote to the project engineer who represented the government in superintending the performance of the contract a letter notifying the engineer of his claim and of the default of Easthom-Melvin Co., Inc., in paying it and sent a copy of the letter by mail in a postpaid envelope to Fleisher Engineering & Construction Co. Each notification was received, but the letter sent to Fleisher Company was sent by ordinary, and not by registered, mail. A copy of the letter of notification was not mailed to Bass. The notice showed on its face the amount claimed by Hallenbeck, that his contract was with the Easthom-Melvin Co., Inc., and that the items were for inspection and testing work.

The United States brought the present suit on behalf of Hallenbeck to recover upon a payment bond furnished by Fleisher Engineering & Construction Co. and Joseph A. Bass, the contractors, and by Royal Indemnity Company and Maryland Casualty Company as sureties. Under this bond, which was in standard government form, the contractors and the sureties bound themselves in the amount of $79,988 jointly and severally as follows: "If the principal shall promptly make payment to all persons supplying labor and material in the prosecution of the work provided for in said contract, and any and all duly authorized modifications of said contract that may hereafter be made, notice of which modifications to the surety being hereby waived, then this obligation to be void; otherwise to remain in full force and virtue."

The plaintiff moved for a summary judgment upon the claim of Hallenbeck which was granted by Judge Knight. From that judgment an appeal was taken to this court.

The Miller Act, 40 U.S.C.A. § 270a (2), requires persons entering into a contract for the construction of any public work of the United States to furnish "a payment bond with a surety or sureties * * * for the protection of all persons supplying labor and material in the prosecution of the work provided for in said contract for the use of each such person." The bond upon which this suit was brought was furnished in pursuance of the Act.

The Act, 40 U.S.C.A. § 270b, subdivisions (a) and (b), defines the rights of persons furnishing labor or materials for a public contract in respect of which a payment bond has been furnished as follows:

"(a) Every person who has furnished labor or material in the prosecution of the work provided for in such contract, * * and who has not been paid in full therefor before the expiration of a period of ninety days after the day on which the last of the labor was done or performed by him or material was furnished or supplied by him for which such claim is made, shall have the right to sue on such payment bond for the amount, or the balance thereof, unpaid at the time of institution of such suit and to prosecute said action to final execution and judgment for the sum or sums justly due him: 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, stating with substantial accuracy the amount claimed and the name of the party to whom the material was furnished or supplied or for whom the labor was done or performed. Such notice shall be served by mailing the same by registered mail, postage prepaid, in an envelop addressed to the contractor at any place he maintains an office or conducts his business, or his residence, or in any manner in which the United States marshal of the district in which the public improvement is situated is authorized by law to serve summons.

"(b) Every suit instituted under this section shall be brought in the name of the United States for the use of the person suing, in the United States District Court for any district in which the contract was to be performed and executed and not elsewhere, irrespective of the amount in controversy in such suit, but no such suit shall be commenced after the expiration of one year after the date of final settlement of such contract. The United States shall not be liable for the payment of any costs or expenses of any such suit."

The only question for consideration is whether in view of the provisions of Section 270b, subdivision (a) of the Miller Act, Hallenbeck, called in the briefs "the use plaintiff", gave sufficient notice to the original contractors to enable him to bring suit on the payment bond.

We feel no doubt that the notice complied with the statute as to its contents. It was not, however, sent by registered but only by ordinary mail and therefore did not conform to the provisions of Section 270b (a) in respect to method of mailing. Furthermore, it was...