200 U.S.

Argument for Plaintiffs in Error.





No. 39.

Submitted November 3, 1905.-Decided January 2, 1906.

The act of August 13, 1894, 28 Stat. 278, was passed, as its title declares,

for the protection of persons furnishing materials and labor for the construction of public works, and nothing in the statute, or in the bond therein authorized, limits the right of recovery to those furnishing material or labor to the contractor directly; but all persons supplying the contractor

with labor or materials in the prosecution of the work are to be protected. The rule which permits a surety to stand upon his strict legal rights does

not prevent a construction of the bond with a view to determining

the fair scope and meaning of the contract. Such statutes are to be liberally interpreted and not to be literally con

strued so as to defeat the purpose of the legislature. Under the circumstances of this case, a material man, who had complied

with the provisions of the statute as to filing notice, was entitled to recover from the surety company on a bond given under the statute although the materials were furnished to a subcontractor and not directly to the contractor.

The facts are stated in the opinion of the court.


Mr. Albert W. Buddress for plaintiffs in error:

The act of Congress and bond were intended to cover just such cases as this, and to prevent such a miscarriage of justice. The original contractor could easily kill the effects of the statute, and avoid all liability on the bond by merely subletting all of its work.

Of the two classes of laborers, the employés of subcontractors stand most in need of the protection of the statute. Redmond v. Galena, &c. R. Co., 39 Wisconsin, 426; Mullin v. United States, 48 C. C. A. 677; United States v. Farley, distinguished, and see Sepp v. McCann,'47 Minnesota, 364; Fidelity Co. v. United States, 191 U. S. 416.

Principals and sureties on such bonds are liable, under simi

Argument for Plaintiffs in Error.

200 U. S.

lar state statutes, for labor and material furnished to subcontractors Cases supra and Mullin v. United States, 48 C. C. A. 677; George v. Washington &c. R. Co., 93 Maine, 134; Branin v. Connecticut &c. R. Co., 31 Vermont, 214; Kent v. New York &c. R. Co., 12 N. Y. 628; Mundt v. Sheboygan &c. R. Co., 31 Wisconsin, 451; Mann v. Corrigan, 28 Kansas, 194; Peters v. St. Louis &c. R. Co., 24 Missouri, 586; Grannahan v. Hannibal &c. R. Co., 30 Missouri, 546; French v. Powell, 135 California, 636; Gilmore v. Westerman, 13 Washington, 390; Abbott v. Morrissette, 46 Minnesota 10; Bassett v. Mills, 89 Texas, 162; Garrison v. Borio, 61 N. J. Eq. 236; Ferguson v. Despo, 8 Ind. App. 523; 23 Am. & Eng. Ency. of Law, 2d ed., 723. Diligent search has not revealed any case holding the contrary.

The object of the bond cannot be defeated by any narrow interpretation of its provisions, nor by adopting a construction favorable to the company, if there be another construction equally admissible under the terms of the instrument executed for the protection of the beneficiary. Guarantee Co. v. Mechanics' Savings &c. Co., 183 U. S. 402. A remedial statute should be liberally construed with reference to the purpose of its enactment. Bechtel v. United States, 101 U. S. 597. The “intent" of the law must prevail over the letter of the statute. Lionberger v. Rowse, 6 Wall. 468; Smythe v. Fiske, 23 Wall. 374; United States v. Freeman, 3 How. 556; Durousseau v. United States, 6 Cranch, 308.

What is implied in a statute is as much a part of it as what is expressed. United States v. Hodson, 10 Wall. 395; Baltimore v. Root, 8 Maryland, 95; Broom's Leg. Max., 611; Rutledge v. Crawford, 91 California, 523.

The meaning of the legislature may be extended beyond the precise words used in the law, from the reason or motive upon which the legislature proceeded, from the end in view, or the purpose which was designed. Bell v. New York, 105 N. Y. 139; Bullock v. Horn, 24 Ohio St. 420; Tuttle v. Montford, 7 California, 358; Barnes v. Thompson, 2 Swan (Tenn.),

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313; Sedgwick, Stat. Con., 308; Jones v. Great Southern Hotel, 30 C. C. A. 108.

Public property cannot be the subject of a lien, unless the statutes shall expressly so provide; it is by implication excepted from lien statutes, as much as from general tax laws, and for the same reasons. Knapp v. Swaney, 56 Michigan, 345; Bates v. Santa Barbara, 90 California, 543. But it is also true that “the State when engaged in the construction of public buildings, is chargeable with a moral duty to protect persons furnishing labor and material therefor.” Korsmeyer v. McClay, 43 Nebraska, 649; Knapp v. Swaney, 56 Michigan, 345; Baker v. Bryan, 64 Iowa, 561; Philadelphia v. Stewart, 195 Pa. St. 309; St. Louis v. Von Phul, 133 Missouri, 564.

The right of plaintiff in error, however, does not depend only on a substitute for a lien but also on the implied agency of the subcontractor for the contractor. Bates v. Santa Bar. bara, 90 California, 543; Kent v. New York Central R. Co., 12 N. Y. 628; Surety Co. v. Cement Co., 110 Fed. Rep. 717; Garrison v. Borio, 61 N. J. Eq. 236. See also Parker v. Gray, 7 Gray, 429.

Mr. Henry C. Willcox for defendant in error, cited United States v. Farley, 91 Fed. Rep. 477; United States v. Simon, 98 Fed. Rep. 73; United States v. Mullin, 48 C. C. A. 677.

MR. JUSTICE Day delivered the opinion of the court.

This case was decided on demurrer in the court below. It was held that no cause of action was stated by the plaintiff, and judgment was rendered accordingly. Plaintiffs brought action as partners against the American Surety Company upon a bond given in pursuance of the act of August 13, 1894. 28 Stat. 278, c. 280. The allegations of the petition, so far important as to be noticed here, are: The defendant is a corporation duly authorized to do a general insurance and bonding business. On February 14, 1891, the New Jersey Foundry and Machine Com

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pany entered into a written contract with the United States, for the construction of four observation towers, for the agreed compensation of $2,575. That, among other things, it was stipulated in the contract “that the said New Jersey Foundry and Machine Company shall be responsible for and pay all liabilities incurred in the prosecution of the work for labor and material,” the work to be completed within seven months from date of contract. The United States required of the said New Jersey Foundry and Machine Company a bond, which was executed by the company and the American Surety Company as surety, on the fourteenth day of February, 1901, in the penal sum of $1,000, to be paid unto the United States of America, which bond contained the condition: “Now, therefore, if the above bounden New Jersey Foundry and Machine Company shall and will in all respects duly and fully observe and perform all and singular the covenants, conditions and agreements in and by said contract agreed and covenanted by said New Jersey Foundry and Machine Company to be observed and performed, according to the true intent and meaning of said contract, and as well during any period of extension of said contract that niay be granted on the part of the United States, as during the original terms of the same, and shall promptly make full payments to all persons supplying it labor or materials in the prosecution of the work provided for in said contract, then the above obligation shall be void and of no effect; otherwise, to remain in full force and virtue." That afterwards the said New Jersey Foundry and Machine Company entered into a contract with the Richard Manufacturing Company for certain portions of the work, and said Richard Manufacturing Company entered upon the performance of the contract, and in the performance thereof between the third day of April and the seventeenth day of May, of the same year, Daniel H. Hill and Howard II. Hill, the plaintiffs, at the special instance and request of the said Richard Manufacturing Company, scraped and painted the four observation towers, to be constructed under the contract, with the said New Jersey Foundry and Machine Company, for which said

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Richard Manufacturing Company agreed to pay the said plaintiffs the sum of $246.80, of which there is unpaid the sum of $141.80. That on the eleventh day of August, 1903, plaintiffs made the affidavit required by the statute, and procured from the Secretary of War of the United States certified copies of the original contract and bonds; that the said New Jersey Foundry and Machine Company, the Richard Manufacturing Company and the United States accepted the said scraping and painting so done and performed by the plaintiffs in the necessary prosecution of the work required by the original contract.

The statute under consideration is entitled “An act for the protection of persons furnishing materials and labor for the construction of public works.” It provides, in substance, that persons entering into formal contracts with the United States for the construction or repair of public buildings and works shall be required, before performing such work, to execute the usual penal bond with good and sufficient surety, with the additional obligation “that such contractor or contractors shall promptly make payments to all persons supplying him or them labor or materials in the prosecution of the work provided for in such contract.” The statute further provides for the furnishing of a copy of the contract and bond to persons furnishing an affidavit that labor and materials for the prosecution of such work have been supplied by him or them, and giving a right of action in the name of the United States for the benefit and use of said person or persons against the contractor and his sureties.

We may remark, before considering the construction to be given this act, that it has been materially amended by the act of February 24, 1905. 33 Stat. 811. The amended act makes provision for preference in payment in favor of the United States, limits the time in which actions may be brought, provides for bringing all the creditors into one action, and for the prosecution of the same in the name of the United States in the Circuit Courts of the United States in the district in which the contract was to be performed, and not elsewhere. In respect to the persons entitled to the benefit of the bond there has been

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