Under the labor and material law of February 24, 1905, c. 778,
33 Stat. 811, amending the Act of August 13, 1894, c. 280, 28 Stat.
278, indemnity is provided for persons furnishing labor and
materials to a subcontractor as well as to the contractor in chief
for the construction of a public building.
The indemnity extends to the full amount furnished
notwithstanding the contractor may have already paid the
subcontractor in full or
Page 215 U. S. 534
in part. Provisions in state statutes limiting recovery against
contractor to amount remaining unpaid to subcontractor do not
affect suit under the federal statute which contain no such
provisions. The decision in
Hill v. American Surety Co.,
200 U. S. 197, in
regard to claims against subcontractors under the act of 1894
followed as to such claims under the statute as amended in
1905.
158 F. 1021, affirmed.
The facts, which Involve the construction of the federal labor
and material act of February 24, 1905, c. 778, 33 Stat. 811, are
stated in the opinion.
Page 215 U. S. 535
MR. JUSTICE DAY delivered the opinion of the Court.
This is a writ of error to the Circuit Court of Appeals for the
Fifth Circuit wherein a judgment of the circuit court of the United
States for the Southern District of Mississippi in favor of the
defendants in error was affirmed. The facts are: the Mankin
Construction Company, on February 27, 1905, entered into a contract
with the Secretary of the Treasury for the
Page 215 U. S. 536
construction of a certain post office building in the City of
Natchez, Mississippi, and gave bond under the Act of February 24,
1905 (33 Stat. 811, c. 778), amending the Act of August 13, 1894
(28 Stat. 278, c. 280). This bond was conditioned that the Mankin
Construction Company should "promptly make payment to all persons
supplying them labor or materials in the prosecution of the work
contemplated by said contract." Upon this bond the Title, Guaranty
& Trust Company of Scranton, Pennsylvania, was surety.
The Mankin Construction Company, on April 29, 1905, entered into
a written contract with one W. E. Smythe, as subcontractor, by the
terms of which Smythe agreed to furnish certain plumbing,
gas-fitting, sheet metal, tile roofing, etc., to be used in the
construction and erection of the post office building. The building
was completed about July 12, 1906, was accepted by the government,
and payment therefor was made to the Mankin Construction Company,
in accordance with the terms of the contract.
The defendants in error, the Ludowici-Celadon Company, the
Nelson Manufacturing Company, and the J. L. Mott Iron Works,
respectively, sold and delivered to Smythe, the subcontractor,
certain materials which he used in the construction of the post
office building, as required by the original contract. Smythe
failed to make full payment on account of such purchases, and no
suit having been brought by the United States under the act of
Congress (33 Stat. 811) within six months, affidavit was made by
the Ludowici-Celadon Company that it had supplied labor and
material for the prosecution of the work of constructing the post
office building, and it was furnished with a copy of the contract
and bond, as required by the act, and thereupon instituted suit in
the name of the United States in the United States Circuit Court
for the Southern District of Mississippi against the Mankin
Construction Company and its surety.
The Nelson Manufacturing Company and the J. L. Mott Iron Works
intervened in the action, and claimed the right
Page 215 U. S. 537
also to recover on account of the materials furnished by them
respectively. There was a judgment upon the bond in favor of the
claimants. It also appears that the Mankin Construction Company had
paid Smythe, the subcontractor, the amount due him under the
contract, less $644.57, before receiving any notice from either of
the claimants of their respective claims against Smythe. The
judgment upon the bond was in favor of the United States for the
use of the Ludowici-Celadon Company in the sum of $1,217.78, for
the use of the Mott Iron Works in the sum of $709.97, for the use
of the Nelson Manufacturing Company in the sum of $2,129.47. The
amount due upon the accounts not being disputed, the court
instructed the jury to find for the claimants.
Upon writ of error to the Circuit Court of Appeals for the Fifth
Circuit, that court affirmed the judgment of the circuit court upon
the authority of
Hill v. American Surety Co., 200 U.
S. 197. In the
Hill case, this Court held that
one who furnished labor or materials in the carrying out of a
contract for public works, although such materials were furnished
to a subcontractor, to whom a part of the work had been let, could
recover upon a bond given under the Act of August 13, 1894 (28
Stat. 278, c. 280). In the
Hill case, it was held that,
construing the bond in the light of the statute, and the purpose of
Congress to provide security for payment for labor and material
going into the construction of a public building, it was intended
thereby to provide indemnity for a person or persons who furnished
labor or materials to the subcontractor, thereby enabling the
contractor to meet his engagement to supply the material and labor
necessary to the construction of a public building.
The present action accrued after the passage of the statute of
February 24, 1905, amending the Act of August 13, 1894, in which
original act a right of action was given in the name of the United
States for the use and benefit of the persons supplying the labor
or materials in the prosecution of the work provided for in the
contract, and requiring a bond for the benefit
Page 215 U. S. 538
of such persons. In that act, there was no limitation upon the
number of actions which might be brought, nor was there any
preference given to the United States in a recovery upon the bond.
In the amended act, a single action was provided for, and priority
was given to the claim and judgment of the United States. In such
suit, any person or company who had furnished labor or material
used in the construction or repair of any public building was
allowed to intervene in the suit by the United States on the bond,
and to have their rights and claims adjudicated, and it was further
provided that, if no suit should be brought by the United States
within six months of the completion and final settlement of the
contract, then the person or persons supplying the labor or
materials should, upon filing an affidavit in the department under
the direction of which the work had been done, or the materials
furnished, be furnished with a certified copy of the contract and
bond, and might thereupon bring an action in the name of the United
States in the circuit court of the United States in the district
where the contract was performed and executed. There are other
provisions looking to the distribution of the recovery upon the
bond and providing for bringing all creditors into the single suit
which is authorized to be instituted.
In respect to the condition of the bond required to be given,
the language of the amended act is precisely the same as that
contained in the act of August 13, 1894, and the condition is
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."
It is the contention of the plaintiffs in error that the Act of
February 24, 1905, differs from the Act of August 13, 1894, in that
a copy of the contract and bond is to be furnished for the purpose
of suit to the "person or persons supplying the contractor with
labor and materials," and upon furnishing an affidavit to the
department under whose direction the work has been prosecuted, that
the labor and materials for the
Page 215 U. S. 539
prosecution of said work have been supplied, but payment for
which has not been made; whereas, in the act of August 13, 1894, it
is provided that any person or persons making an application
therefor, and furnishing an affidavit to the Department that the
labor and materials for the prosecution of such work had been
supplied by him or them, payment for which had not been made, shall
have a certified copy of the contract and bond for the purpose of
bringing suit thereon.
In both statutes, a copy of the contract and bond is to be
furnished upon an affidavit that labor and materials for the
prosecution of the work have been supplied by the persons applying
for such copy. In the amended statute it is provided that, if the
action is not instituted by the United States within six months,
then the person or persons supplying the contractor with labor and
materials, and furnishing the affidavit that the same were supplied
for the prosecution of such work, shall have a certified copy of
the contract and bond for the purposes of the suit. The additional
phrase used in this connection, "the person or persons supplying
the contractor with labor and materials," it is contended, shows
that only those who furnish labor and materials directly to the
contractor come within the benefit of the act. We cannot agree with
this contention. The phrase, "person or persons supplying the
contractor with labor and materials," are the words embodied in
both statutes alike in the requirement of a bond for their benefit.
In the
Hill case, it was distinctly held that "persons
supplying the contractor with labor and materials" included not
only the subcontractor, but anyone who furnished labor and
materials to the subcontractor for carrying out the work contracted
for. There is nothing in the provision as to who shall have a copy
of the bond for the purpose of suit which changes or limits the
obligation of the bond under identical requirements in both
statutes, alike embracing, as construed in the
Hill case,
persons furnishing labor and materials to a subcontractor.
As to the other point, that the Mankin Construction Company
Page 215 U. S. 540
had paid to Smythe, the subcontractor, the amount due him,
except the sum of $644.57, before receiving notice of the claims of
the outstanding debts recovered in this case, there is no provision
in the statute that notice shall be given to the contractor of
claims against the subcontractor, and limiting the recovery to the
amount unpaid at the time of such notice. Such provision is found
in some of the state statutes, and is made a condition of recovery
in some of the mechanics' lien acts; but this case is controlled by
the federal act under consideration and the obligation of the bond,
which requires payment to all persons supplying labor and material
in the prosecution of the work contemplated by the contract.
As was said in the
Hill case, the contractor can
protect himself by requiring a bond securing him against liability
on account of engagements of the subcontractor with persons who
furnish labor and material upon his order. Indeed, the present
contract contained, as the record shows, a provision that the
general contractor reserved the right to require a full release
from all claims for which he had become liable for materials
furnished to, or work done for, the subcontractor, on account of
materials and work required by the contract, with the right to
withhold any amount due to the subcontractor until such release
should be furnished.
We agree with the circuit court of appeals that this case is
ruled by the decision made in
Hill v. American Surety Co.
supra. The judgment of the circuit court of appeals, affirming
the judgment of the Circuit Court, is therefore
Affirmed.