United States v. Gunnar I. Johnson & Son, Inc.

• Decision Date: 28 January 1963
• Docket Number: No. 17074.,17074.
• Citation: 310 F.2d 899
• Parties: UNITED STATES of America for the use of GENERAL ELECTRIC COMPANY, a corporation, Appellant, v. GUNNAR I. JOHNSON & SON, INC., a corporation, and St. Paul Fire and Marine Insurance Company, a corporation, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

310 F.2d 899 (1962)

UNITED STATES of America for the use of GENERAL ELECTRIC COMPANY, a corporation, Appellant, v. GUNNAR I. JOHNSON & SON, INC., a corporation, and St. Paul Fire and Marine Insurance Company, a corporation, Appellees.

No. 17074.

United States Court of Appeals Eighth Circuit.

December 28, 1962.

Rehearing Denied January 28, 1963.

Harold Jordan, St. Paul, Minn., made argument for appellant and filed brief.

George X. Connor, Hopkins, Minn., made argument for appellee and filed brief.

Before MATTHES and BLACKMUN, Circuit Judges, and REGISTER, District Judge.

REGISTER, District Judge.

This is an action commenced under the provisions of the Miller Act, 40 U.S.C.A. § 270b, for the recovery of a certain sum alleged to be due the appellant for materials furnished the appellee Gunnar I. Johnson & Son, Inc., a corporation. The sole issue is whether the written notice of claim given by the use plaintiff (appellant) to the prime contractor, Gunnar I. Johnson & Son, Inc., (appellee) was given within ninety days from the date on which said appellant furnished the last of the material for which such claim is made, as required by said statute.¹

This case was submitted on a written Stipulation of Facts, which facts, as so stipulated, constitute the sole evidence herein. On June 29, 1959, the appellee, Gunnar I. Johnson & Son, Inc., as prime contractor, entered into a written contract with the United States of America, Department of the Army, for the construction of certain facilities at the United States Air Force Base at Willmar, Minnesota. The bond required by the Miller Act (40 U.S.C.A. § 270a) was executed by the prime contractor, as principal, and by St. Paul Fire and Marine Insurance Company, as surety. The electrical work was subcontracted to John M. Schroeder, Inc. Said subcontractor entered into a contract with the appellant (use-plaintiff) wherein appellant agreed with subcontractor to supply various items of electrical materials to such job. It will be helpful to quote specific portions of the Stipulation which are of vital importance to the disposition hereof.

"Subcontractor ordered from plaintiff from time to time various items of electrical equipment and materials for delivery to the job site for use in prosecution of the contract. Plaintiff maintained a running account for the materials so furnished to said job site under a separate job account * * *. As each delivery was made, plaintiff sent subcontractor an invoice as to the materials so delivered. A monthly statement of the balance in the job account was sent to subcontractor.

"The materials shipped by plaintiff to said job site were ordered by the subcontractor by means of a series of written purchase orders * * *.

"Except for Purchase Order 15276 (dated July 29, 1959) all other purchase orders covered miscellaneous electrical supplies. The main purchase order was No. 15276 which covered an entire electrical equipment distribution system. The component parts making up said system were delivered in sections over a period of time. Until all of the component parts were delivered to the job site the distribution system engineered for this project was incomplete. With respect to the shipment dated December 23, 1959, there was returned to the factory two bus duct elbows which required alteration before they could be installed in the project. Said items were reshipped from the factory to the job site on April 5, 1960 on a `NO CHARGE' basis.

"On April 6, 1960, plaintiff mailed a letter of notification of a claim with respect to materials furnished by plaintiff on said job site * * *.

"On April 7, 1960, Mr. Gunnar I. Johnson, in order to induce plaintiff to complete delivery of materials on all of the job sites² covered by this suit, promised plaintiff that the Johnson Corporation would guarantee payment for all materials thereafter to be delivered by plaintiff for completion of said contracts. At the time of the making of such promise, the said Gunnar I. Johnson was informed of the inability of subcontractor to make payment for said materials."

Attached to, and constituting a part of such Stipulation, is a correct statement of the entire account for said job taken from plaintiff's records, copies of all of said purchase orders, and a table showing dates on which the materials called for in such purchase orders were shipped to the job sites.

The amount of the claim here in suit is $7,383.73. This claim is comprised of the sum of $7,003.71 as balance unpaid on the main purchase order, and of the sum of $380.02 balance remaining unpaid on four small purchase orders for miscellaneous items, on April 6, 1960, which respective balances remained after the proper allocation of payments and credits to which the subcontractor was entitled at that time on the purchase price of items previously purchased and furnished. The shipping dates of such four miscellaneous items were October 21, November 21, December 15, and December 30, 1959, respectively. The shipping dates and amounts of the shipments of component parts of the entire electrical system (main purchase order) here involved are:

                  November 10, 1959 ............... $ 210.25
                  December 3, 1959 ................  4899.00
                  December 23, 1959 ...............  2014.00
                         Total ....................$ 7123.25
                  on which there is a credit of ...   119.54
                  leaving balance of such claim
                      of ..........................$ 7003.71
                

The only notice served or given by appellant was dated and mailed on April 6, 1960, and was received by the prime contractor, Gunnar I. Johnson & Son, Inc., (appellee) on April 7, 1960. No question is raised herein as to the adequacy of the contents of the notice or of the validity of its service.

From the stipulated facts it is apparent that the main purchase order covered an entire electrical distribution system which was to be engineered, manufactured and prepared at appellant's factory for this job and delivered to the job site; that said main purchase order constituted one entire contract; that the component parts making up the entire system were delivered in sections over a period of several months; that on April 6, 1960, not all of the component parts had been shipped; that on April 6, 1960, the performance of such contract was incomplete, and that the remainder of the component parts were shipped subsequent to the date on which the notice of claim was made. The record discloses that the component parts of such system which were furnished after April 7, 1960, were furnished pursuant to a direct contractual relationship then existing between the appellant and said appellee Gunnar I. Johnson & Son, Inc., that the cost of all thereof was paid by the said appellee, and that no part thereof is included in the claim here involved. Such direct contractual relationship between the appellant and said appellee Gunnar I. Johnson & Son, Inc., was created on April 7, 1960, and related only to materials furnished on and after that date.

This direct contractual relationship arose from said appellee's express promise to appellant, made on April 7, 1960, that it "would guarantee payment for all materials thereafter to be delivered by plaintiff for completion of said contracts". See "Bonds of Contractors on Federal Public Works — Miller Act", Boston University Law...