United States v. James Baird Co.

• Citation: 64 App. DC 12,73 F.2d 652
• Decision Date: 25 June 1934
• Docket Number: No. 6013.,6013.
• Parties: UNITED STATES, to Use of GALLIHER & HUGUELY, Inc., et al. v. JAMES BAIRD CO. et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

64 App. DC 12, 73 F.2d 652 (1934)

UNITED STATES, to Use of GALLIHER & HUGUELY, Inc., et al. v. JAMES BAIRD CO. et al.

No. 6013.

United States Court of Appeals for the District of Columbia.

Decided June 25, 1934.

Rehearing Denied October 27, 1934.

H. Winship Wheatley, George E. Hamilton, John J. Hamilton, George E. Hamilton, Jr., Henry R. Gower, James E. Shifflette, and J. A. Marshall, all of Washington, D. C., for appellants.

Leon Tobriner, G. Thomas Dunlop, Edwin A. Swingle, and Walter N. Tobriner, all of Washington, D. C., for appellees.

Before MARTIN, Chief Justice, and ROBB, VAN ORSDEL, and HITZ, Associate Justices.

HITZ, Associate Justice.

This is an appeal from a judgment of the Supreme Court of the District of Columbia on a verdict for the defendants ordered by the court. The action is based upon a bond executed by the James Baird Company, as principal, and the Fidelity & Casualty Company of New York, as surety, pursuant to the provisions of the Hurd Act, 33 Stat. 811, 40 USCA § 270.

The Baird Company entered into a written contract on January 21, 1929, with the United States for the construction of a building in the city of Washington to be known as the Internal Revenue building. As required by the Hurd Act, the contractor executed a bond to the United States, dated January 23, 1929, upon which the Fidelity & Casualty Company of New York is the surety, one condition of which is the prompt payment of "all persons supplying the principal with labor and materials in the prosecution of the work" provided for in the construction contract.

The contractor made a subcontract with the James H. Elkins Construction Company for the erection of the structural steel used in the building. The plaintiffs and interveners in this action supplied lumber to this subcontractor, the bulk of which was used for decking in connection with erecting the steel, while certain heavier timbers were used to form a base for a derrick.

The subcontractor went into bankruptcy after about 90 per cent. of the steel erection work had been completed, whereupon the decking was seized in July, 1929, by creditors of the subcontractor under an attachment. On March 31, 1931, the plaintiffs brought this action upon the bond executed by the contractor. The court ruled that the lumber in question did not come within the terms of the bond, and directed the jury to return a verdict for the defendants. From a judgment entered on the verdict, this appeal was taken.

So much of the Hurd Act (40 USCA § 270) as is pertinent reads as follows:

"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 sureties, with the additional obligation that such contractor or contractors shall promptly make payments to all persons supplying him or them with labor and materials in the prosecution of the work provided for in such contract; and any person, company, or corporation who has furnished labor or materials used in the construction or repair of any public building or public work, and payment for which has not been made, shall have the right to intervene and be made a party to any action instituted by the United States on the bond of the contractor, and to have their rights and claims adjudicated in such action and judgment rendered thereon, subject, however, to the priority of the claim and judgment of the United States. If the full amount of the liability of the surety on said bond is insufficient to pay the full amount of said claims and demands, then, after paying the full amount due the United States, the remainder shall be distributed pro rata among said interveners.

"If no suit should be brought by the United States within six months from the completion and final settlement of said contract, then the person or persons supplying the contractor with labor and materials shall, upon application therefor, and furnishing affidavit to the department under the direction of which said work 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, be furnished with a certified copy of said contract and bond, upon which he or they shall have a right of action, and shall be, and are hereby, authorized to bring suit in the name of the United States in the district court of the United States in the district in which said contract was to be performed and executed, irrespective of the amount in controversy in such suit, and not elsewhere, for his or their use and benefit, against said contractor and his sureties, and to prosecute the same to final judgment and execution. * * *"

The facts with relation to the character of the lumber and the uses to which it was put are set forth in a stipulation filed March 11, 1933:

"All of the lumber furnished by the foregoing parties, except certain heavy timbers hereinafter mentioned, consisted of heavy pine, fir, and spruce planks, generally three inches in thickness by twelve in breadth and of lengths varying from ten to twenty feet. This lumber was used exclusively by the Elkins Construction Company for what is known in the trade as `decking', in connection with the performance of its contract for erecting the steel on said building, which `decking' consists in placing temporary flooring over the beams or girders on the floor level where the derrick employed in raising the steel is located and also on the next floor beneath.

"Erecting structural steel in a building of this type cannot be accomplished without such lumber, as its use, as hereinbefore set out, is universally required either by statute or positive rules of interested labor unions, or is dictated by considerations of safety. Its purpose is to afford a landing place for the steel raised by the derrick, as well as protection to workmen who may be employed about the building on levels lower than the story on which the derrick for the time being may be located. This lumber, which for convenience, is referred to as `decking' was not attached to the building in any way, but was laid across the steel floor beams and was moved from floor to floor as the steel work progressed. The `decking' was not consumed by the construction work, but, as in the usual course of like operations, some of it became broken by handling and having heavy weights fall upon it, and some of it became dirty and greasy and somewhat burned by hot iron rivets and grease falling upon it and none of the `decking' could be sold thereafter as new lumber. The Elkins Construction Company had completed the steel work to the top floor of the Internal Revenue Building when it became financially embarrassed. * * * Thereafter, on July 31, 1929, the Elkins Construction Company was adjudicated a bankrupt, and said lumber so previously seized was sold by the trustee in bankruptcy. * * *

"The purchaser from the trustee in bankruptcy, Koch, was and had been for thirty years in the business of steel erection for buildings and bridges, was in Washington and knew that the James H. Elkins Construction Company was engaged in the erection of the steel on the Internal Revenue Building, which was the same kind of steel erection that he did. * * * About the time Koch started the Commerce Building job he purchased at the site of the Internal Revenue Building lumber which had been used by the ...