Under the Act of August 13, 1894, 28 Stat. 278, as construed in
the light of the act passed the same day, 28 Stat. 282, and of the
act amending the latter passed January 24, 1905, 33 Stat. 811, in
suits brought in the name of the United States for the benefit of
materialmen and laborers on bonds given in pursuance of the act,
the United States is a real litigant, and not a mere nominal party,
and the Circuit Court of the United States has jurisdiction of such
suits without regard to the value of the matter in dispute.
By an Act of Congress approved August 13, 1894, entitled "An Act
for the Protection of Persons Furnishing Materials and Labor for
the Construction of Public Works," it was provided:~ That hereafter
any person or persons entering into
Page 204 U. S. 350
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 obligations that such contractor or contractors shall
promptly make payments to all persons supplying him or them labor
and materials in the prosecution of the work provided for in such
contract, and any person or persons making application therefor,
and furnishing affidavit to the department under the direction of
which said work is being, or 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, shall be
furnished with a certified copy of said contract and bond, upon
which said person or persons supplying such labor and materials
shall have a right of action, and shall be authorized to bring suit
in the name of the United States for his or their use and benefit
against said contractor and sureties, and to prosecute the same to
final judgment and execution: Provided, That such action and its
prosecutions shall involve the United States in no expense. Sec. 2.
Provided, that in such case the court in which such action is
brought is authorized to require proper security for costs in case
judgment is for the defendant.
28 Stat. 278, c. 280.
On the same day -- August 13, 1894 -- Congress passed an act
providing that whenever any recognizance, stipulation, bond, or
undertaking conditioned for the faithful performance of any duty,
or for doing or refraining from doing anything in such
recognizance, stipulation, bond, or undertaking specified is, by
the laws of the United States, required or permitted to be given
with one or more sureties, it should be lawful to accept such
instrument from a corporation having power to guarantee the
fidelity of persons holding positions of public or private trust,
and to execute and guarantee bonds and undertakings in judicial
proceedings. The act provided that
Page 204 U. S. 351
any surety company doing business under the provisions of that
act
"may be sued in respect thereof in any court of the United
States which has now or hereafter may have jurisdiction of actions
or suits upon such recognizance, stipulation, bond, or undertaking,
in the district in which such recognizance, stipulation, bond, or
undertaking was made or guaranteed, or in the district in which the
principal office of such company is located."
28 Stat. 279, § 5, c. 282.
Proceeding under the above acts the United States, in 1899, made
a written contract with one Churchyard to furnish labor, materials,
tools, and appliances for the construction of a public building,
taking from him the required bond with the United States Fidelity
& Guaranty Company, a corporation, as surety.
The present action, brought in the circuit court on that bond,
was by the United States, "suing herein for the benefit and on
behalf of James S. Kenyon," who furnished a contractor, for use in
the construction of the proposed government building, materials of
the value of $66.05 for which the latter neglected and refused to
pay. Damages to the amount of $500 were claimed in the
declaration.
The defendant, the United States Fidelity & Guaranty
Company, pleaded that it did not owe the sum demanded. The
plaintiff introduced testimony, but the defendant introduced none,
and it appearing upon the face of the declaration that the value of
the matter in dispute was less than $2,000, it moved that the
action be dismissed for want of jurisdiction in the circuit court.
That motion was denied, and judgment for $206.47 was entered
against the Fidelity & Guaranty Company for the use and benefit
of Kenyon.
United States v. Churchyard, 132 F. 82.
Page 204 U. S. 354
MR. JUSTICE HARLAN delivered the opinion of the Court.
This case is here upon a certificate as to the original
jurisdiction of the circuit court of the United States of this
action.
A circuit court of the United States, as provided in the
Judiciary Acts of 1887, 1888, may take original cognizance of any
suit at common law or in equity arising under the laws of the
United States if the value of the matter in dispute exceeds $2,000,
exclusive of interest and costs. 25 Stat. 433, c. 866. But if,
within the meaning of that act, the United States is the plaintiff
in the action, then jurisdiction exists in a circuit court without
regard to such value.
United States v. Sayward,
160 U. S. 493;
United States v. Shaw, 39 F. 433;
United States v.
Kentucky River Mills, 45 F. 273;
United States v.
Reid, 90 F. 522.
The contention of the Fidelity Company is that the government in
this case is to be deemed a nominal party only, its name being used
as plaintiff simply under the authority of the above act of 1894,
c. 280. In support of this position, our attention is called to the
following, among other cases:
Browne v. Strode, 5 Cranch
303 [omitted];
McNutt v. Bland,
2 How. 9,
43 U. S. 14;
Maryland v. Baldwin, 112 U. S. 490;
Stewart v. Baltimore & O. R. Co., 168
U. S. 455.
Browne v. Strode was a suit in the Circuit Court for
the District of Virginia in which the persons named in the
declaration
Page 204 U. S. 355
as plaintiffs were justices of the peace, all citizens of
Virginia. The suit was on a bond given by an executor in conformity
with a Virginia statute, and was for the recovery of a debt due
from the testator in his lifetime to an alien, a British subject.
The defendant was a citizen of Virginia. This Court held that the
circuit court had jurisdiction, notwithstanding the justices and
the defendant were all citizens of the same state. This was, we
assume, upon the ground that the justices were nominal parties
only, while the beneficial party was an alien, and the defendant a
citizen of the state in which the suit was brought.
McNutt v. Bland was a suit upon a bond given by a
sheriff and running to the governor of the state, conditioned for
the faithful performance of the duties of his office. The statute
authorized suit to be brought and prosecuted from time to time at
the cost of any party injured until the whole amount of the penalty
was recovered. The suit was brought in the name of the governor for
the use of certain parties who were citizens of New York. The court
held that the sheriff and his sureties, citizens of Mississippi,
could be sued by the parties in interest in their own name, and
that no sound reason could be perceived
"for denying the right of prosecuting the same cause of action
against the sheriff and his sureties in the bond, by and in the
name of the governor, who is a purely naked trustee for any party
injured. He is a mere conduit through whom the law affords a remedy
to the person injured by the acts or omissions of the sheriff; the
governor cannot prevent the institution or prosecution of the suit,
nor has he any control over it. The real and only plaintiffs are
the plaintiffs in the execution, who have a legal right to make the
bond available for their indemnity, which right could not be
contested in a suit in a state court of Mississippi, nor in a
circuit court of the United States, in any other mode of proceeding
than on the sheriff's bond."
Maryland v. Baldwin, 112 U. S. 490,
112 U. S. 492,
was an action in a state court on an administrator's bond in the
name of the
Page 204 U. S. 356
state for the benefit of one Markley, a citizen of New Jersey,
the obligors in the bond being citizens of Maryland. The action was
removed to the circuit court of the United States. After referring
to the cases of
Browne v. Strode and
McNutt v.
Bland, the Court said:
"The justices of the peace in the one case and the governor in
the other were mere conduits through whom the law afforded a remedy
to persons aggrieved, who alone constituted the complaining
parties. So, in the present case, the state is a mere nominal
party; she could not prevent the institution of the action, nor
control the proceedings or the judgment therein. The case must be
treated, so far as the jurisdiction of the circuit court of the
United States is concerned, as though Markley was alone named as
plaintiff, and the action was properly removed to that court."
Stewart v. Balt. & O. R. Co. was an action against
a railroad company by an administrator to recover damages for the
benefit of a widow whose husband's death was alleged to have been
caused by the negligence of the defendant company. In the course of
the discussion of the controlling questions in that case, the court
observed, in passing, that, "for purposes of jurisdiction in the
federal courts, regard is had to the real, rather than to the
nominal party," and that, even in an action of tort, "the real
party in interest is not the nominal plaintiff, but the party for
whose benefit the recovery is sought."
This case differs from those just cited, and stands, we think,
on exceptional grounds. The United States is not here a merely
nominal or formal party. It has the legal right, was a principal
party to the contract, and, in view of the words of the statute,
may be said to have an interest in the performance of all its
provisions. It may be that the interests of the government, as
involved in the construction of public works, will be subserved if
contractors for such works are able to obtain materials and
supplies with certainty and promptly. To that end, Congress may
have deemed it important to assure those who furnish such materials
and supplies that the government would exert its power directly for
their protection. It
Page 204 U. S. 357
may well have thought that the government was under some
obligation to guard the interests of those whose labor and
materials would go into a public building. Hence the statute
required that, in addition to a penal bond in the usual form, one
should be taken that would contain the specific, special obligation
directly to the United States that the contractor or contractors
"shall promptly make payments to all persons supplying him or them
labor and materials in the prosecution of the work." The government
is a real party here, because the declaration opens, "The United
States, suing herein for the benefit of and on behalf of James
Kenyon . . . comes and complains," and alleges that the "defendants
became and are indebted to the United States for the benefit of the
said James S. Kenyon." In a large sense, the suit has for its main
object to enforce that provision in the bond that requires prompt
payments by the contractor to materialmen and laborers. The bond is
not simply one to secure the faithful performance by the contractor
of the duties he owes directly to the government in relation to the
specific work undertaken by him. It contains, as just stated, a
special stipulation with the United States that the contractor
shall promptly make payments to all persons supplying labor and
materials in the prosecution of the work specified in his contract.
This part of the bond, as did its main provisions, ran to the
United States, and was therefore enforceable by suit in its name.
We repeat, the present action may fairly be regarded as one by the
United States itself to enforce the specific obligation of the
contractor to make prompt payment for labor and materials furnished
to him in his work. There is therefore a controversy here between
the United States and the contractor in respect of that matter. The
action is nonetheless by the government as a litigant party,
because only one of the persons who supplied labor or materials
will get the benefit of the judgment. We are of opinion, in view of
the peculiar language of the act of 1894 for the protection as well
of the United States as of all persons furnishing materials and
labor
Page 204 U. S. 358
for the construction of public works, that it is not an
unreasonable construction of the words in the Judiciary Act of
1887, 1888, "or in which controversy the United States are
plaintiffs or petitioners," to hold that the United States is a
real, and not a mere nominal, plaintiff in the present action, and
therefore that the circuit court had jurisdiction.
This interpretation of the statute finds some support in the
above act of 1894, c. 282, passed the same day as the act c. 280,
for the protection of materialmen and laborers, and which provides
that suits against a fidelity or guaranty corporation, accepted as
surety in any recognizance, stipulation, bond, or undertaking given
to the United States, may be sued in any court of the United States
having jurisdiction of suits upon such instrument. There is in that
act no express limitation as to the amount involved in suits of
that character in either of the acts passed in 1894. Taking the two
acts together, there is reason to say that Congress intended to
bring all suits embraced by either act, when brought in the name of
the United States, within the original cognizance of the circuit
courts of the United States, without regard to the amount in
dispute. And this view as to the intention of Congress is
strengthened by an examination of the Act of February 24, 1905, 33
Stat. 811, c. 778, which amends the above statute of 1894, c. 280.
After providing that persons supplying labor and materials for the
construction of a public work shall have the right to intervene in
any suit brought by the United States against the contractor, that
act declares that, if no such suit is brought by the United States
within six months after completion of the contract, then the person
supplying labor or material to the contractor
"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,
Page 204 U. S. 359
and to prosecute the same to final judgment and execution."
It is true that this statute can have no direct application
here, because the present action was instituted long prior to its
passage and after the trial court had decided the question of the
jurisdiction of the circuit court. As the act of 1905 does not
refer to cases pending at this passage, the question of
jurisdiction depends upon the law as it was when the jurisdiction
of the circuit court was invoked in this action. Nevertheless, that
act throws some light on the meaning of the act of 1894, c. 280,
for the protection of materialmen and laborers, and tends to
sustain the view based on the latter act -- namely that, in suits
brought in the name of the government for their benefit, the United
States is a real litigant, not a mere nominal party, and that, of
such suits, the government being plaintiff therein, and having the
legal right, the circuit court may take original cognizance without
regard to the value of the matter in dispute. There are cases which
take the opposite view, but the better view, we think, is the one
expressed herein.
The judgment is
Affirmed.
MR. JUSTICE BREWER dissents.
