United States v. Scheurman

• Decision Date: 09 November 1914
• Citation: 218 F. 915
• Parties: UNITED STATES, to Use of PITTSBURG PLANING MILL CO. et al. v. SCHEURMAN et al.
• Court: U.S. District Court — District of Idaho

218 F. 915

UNITED STATES, to Use of PITTSBURG PLANING MILL CO. et al. v. SCHEURMAN et al.

United States District Court, D. Idaho, Central Division.

November 9, 1914

F. B Wheeler, of Pittsburg, Kan., and Geo. G. Pickett, of Moscow Idaho, for plaintiffs.

Forney & Moore, of Moscow, Idaho, for defendants.

DIETRICH District Judge.

The plaintiff brings this suit under the provisions of an act of February 24, 1905, c. 778, 33 Stat. 811 (Comp. St. 1913, Sec 6923), conferring upon persons who have furnished labor or material for the construction of public works the right under certain conditions, to claim the protection of the bond given to the government by the contractor for the faithful performance of his contract.

The contract presently involved, which was for the construction of the post office building at Moscow, Idaho, was completed, and final settlement thereof made, on July 3, 1912. The complaint herein was filed June 21, 1913. Originally the Interstate Construction Company, which was the contractor, and the Bankers' Security Company, its surety, were named as defendants; but in an amended complaint filed June 10, 1914, the Maryland Casualty Company was joined as defendant, with the explanation that after the execution of the bond in question the casualty company had, by a written agreement, and for a valuable consideration, succeeded to the business of the security company, and had assumed all the liabilities of the latter, including the obligations of this bond.

Among other provisions, the act of 1905, supra, contains the following:

'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 * * * 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 Circuit 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. Provided, that where such suit is instituted by any of such creditors on the bond of the contractor it shall * * * be commenced within one year after the performance and final settlement of said contract, and not later: And provided further, that where suit is so instituted by a creditor or by creditors, only one action shall be brought, and any creditor may file his claim in such action and be made party thereto within one year from the completion of the work under said contract, and not later. * * * Provided further, that in all suits instituted under the provisions of this act such personal notice of the pendency of such suits, informing them of their right to intervene as the court may order, shall be given to all known creditors, and in addition thereto notice of publication in some newspaper of general circulation, published in the state or town where the contract is being performed, for at least three successive weeks, the last publication to be at least three months before the time limited therefor.'

The limitation of time thus prescribed for bringing suit conditions the right to sue, and does not merely bar the remedy. Baker Contract Co. v. United States, 204 F. 390, 122 C.C.A. 560. Invoking this principle, the casualty company, by general demurrer, raises the objection that the complaint fails to exhibit an existing cause of action. In the first place, conceding that the suit was originally instituted within a year from the time the final settlement was made, it urges that it was too late, for the reason that the statute provides that, after action is commenced, notice by publication for at least three weeks must be given of the pendency thereof, the publication to be complete at least three months prior to the expiration of the year, and that compliance with this provision was no longer possible when the suit was commenced. Reliance is placed upon United States v. Stannard (D.C.) 206 F. 326, which it is to be admitted apparently supports the proposition. Under this view, while the act in express terms provides that the suit may be brought within a year, it must in reality be instituted in approximately eight months, and, inasmuch as it cannot be brought within the first six months of this period, the creditor has in fact only a little more than two months in which to commence it. While doubtless such a construction is possible, it not only harshly restricts the remedy which it was the purpose of the statute to afford, but it is in the face of language the meaning of which, if standing alone, could not be mistaken, and therefore it should not be adopted except for reasons of the most cogent character.

For the necessities of this case it will suffice to inquire for whose benefit and for what object this proviso was inserted. Clearly it was not for the protection of the government, for suits of this character cannot be instituted until it has been fully indemnified or has waived its right by failure to sue. It was not for the benefit of the contractor, for he is of course, liable, regardless of the statute. Nor was it for the protection of the surety, for in no contingency...