United States v. McIntyre

• Decision Date: 05 November 1901
• Docket Number: 4,049.
• Parties: UNITED STATES, to Use of SCHUMACKER, v. McINTYRE et al.
• Court: U.S. District Court — District of Colorado

111 F. 590

UNITED STATES, to Use of SCHUMACKER, v. McINTYRE et al.

No. 4,049.

United States Circuit Court, D. Colorado.

November 5, 1901

Edward L. Shannon and Thomas, Bryant & Lee, for plaintiff.

Hartzell & Steele and A. W. Gillette, for defendants.

RINER District Judge.

It is alleged in the complaint, and admitted in the answer, that in March, 1898, the defendant McIntyre entered into a contract with the United States of America to furnish material and to perform the work required for the construction of the foundation, superstructure, and roof of the United States Mint building in the city of Denver. The record further shows that stone from the Cotapaxi quarries had been selected to be used in the superstructure of the building. In April, 1898 McIntyre furnished his bond to the government, with the defendant the United States Fidelity & Guaranty Company as surety. The bond is set out at length in the complaint, and it is unnecessary to be stated here. It is sufficient to say that it is in the usual form of such surety bonds. In July 1898, McIntyre entered into a contract with one John H Routt, under which Routt was to furnish McIntyre stone from the Cotapaxi quarry for the superstructure of the mint building. The testimony tends to show that, at the time Routt made the contract with McIntyre to furnish the stone, he did not have sufficient means, to carry on the work of opening the quarry. He applied to Schumacker, the present plaintiff for a loan of $1,500. The loan was made; Schumacker taking Routt's note for the amount, and Routt assigning to Schumacker, as security, his interest in the contract with McIntyre. At that time a tripartite agreement between Routt, McIntyre, and Schumacker was entered into in respect to the repayment to Schumacker of the $1,500 loaned by him to Routt. The $1,500 proving insufficient to open and operate the quarry, Routt applied to Schumacker for an additional loan of $1,000, which was made, and a new note for $2,750 was given by Routt to Schumacker, dated September 30, 1898. This note was secured by Routt's reassignment of the contract between Routt and McIntyre, and a new tripartite agreement was entered into between these parties with respect to the repayment of this sum of $2,750, including the interest due upon the original loan. The stone from the Cotapaxi quarries proving not satisfactory, the government, as it had a right to do under its contract with McIntyre, changed the stone from the Cotapaxi to Arkins stone, and a new contract, dated October 15, 1898, was entered into between Routt and McIntyre with respect to furnishing the stone from the Arkins quarry, whereby McIntyre agreed to pay Routt 55 cents per cubic foot for all stone delivered and accepted, f.o.b. the cars at Arkins; payments to be made on the measured stone in the building, monthly, from estimates given by the proper government officers, less 10 per cent., which 10 per cent. was to be paid upon the final estimate. Routt's interest in this contract was also assigned to Schumacker as security for the payment of the $2,750 and the interest, and a new tripartite agreement, dated the same day, was entered into between Routt, McIntyre, and Schumacker, whereby it was provided, among other things, that Routt should assign his interest in his contract with McIntyre to Schumacker as security for his loan; that he would keep Schumacker fully informed with respect to the quantities of stone furnished under said contract, the time of the monthly estimates to be made by the proper government official, and the times when payments of money were to be made by the said McIntyre on account of said contract; that he would not draw any money from McIntyre under the contract without first informing Schumacker in writing of his intentions so to do; that he would, upon the written request of Schumacker, furnish written statements from time to time as to the amount of stone furnished, amounts received therefor or due therefor; and that he would faithfully perform the contract. He further expressly authorized McIntyre to pay over to Schumacker from time to time all moneys due and coming to him upon the contract when the same should become due, payments being based upon the monthly estimates of government officers as set forth in the original contract, until the note and the interest thereon, at the rate of 6 2/3 per cent. per month, should be fully paid. He further agreed to furnish McIntyre with a good bond as in the original contract provided. McIntyre, upon his part, agreed that Routt might assign his contract to Schumacker for the purposes above stated; that, in case of default on the part of Routt in the performance of the contract, he would give Schumacker or his legal representatives the eight days' notice provided for in the contract between Routt and McIntyre; that Schumacker, or his legal representatives or assigns, might carry out and perform the contract in the same manner and to the same effect as though the original contract had been entered into with him; and that, upon three days' notice in writing from Schumacker of his intentions to do so, he (Schumacker) should have the right and privilege of entering into possession of the quarry and performing the contract between McIntyre and Routt. He further agreed that he would accept the order of Routt to pay Schumacker all moneys becoming due to Routt from him as the same should become due under the original contract, payments to be based upon the estimates of the proper officials of the government as set forth in the contract between Routt and McIntyre, and that he would immediately pay to Schumacker all moneys becoming due from time to time to Routt from him under said contract between Routt and McIntyre, until Schumacker's note had been paid in full; and he further agreed that in case he (McIntyre) should enter into possession of the quarries and perform the contract, as therein provided he might do in a certain event, he would pay to Schumacker any moneys due from him (McIntyre) to Routt, up to the amount of the note and the interest. He further agreed that, until the note and the interest had been fully paid according to its tenor, he would, at all proper, seasonable, and necessary times, provide and furnish Routt sufficient money, or available and marketable credit, to enable Routt to open up and operate the quarries known as the 'Chambers Quarries,' to remove the stone therefrom and to keep the men working at that place paid; the amount to be furnished and provided not to exceed $1,500 prior to the 15th of November, 1898. Schumacker, upon his part, agreed that all notices provided for by the contract might be sent to his attorney; that out of the moneys paid to him by McIntyre he would turn over to Routt such an amount as might be necessary to enable Routt to meet the running and operating expenses of the quarry, not to exceed 50 per cent. of the amount so by him (Schumacker) received under the first two estimates, and not to exceed 40 per cent. of the amount received by him under subsequent estimates, and to turn over to McIntyre 20 per cent. of the balance left at such times in the hands of Schumacker, until McIntyre should be fully reimbursed for his advances of cash and credit furnished to Routt. The parties then agreed as follows (and I quote from the contract):

'It is agreed by all of the parties hereto that the said contract of July 6, 1898, and the said tripartite agreement of September 30, 1898, shall not be considered abrogated, annulled, or superseded, so far as the said Schumacker is concerned, or the rights or claims of the said Schumacker thereunder waived, surrendered, canceled,

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