R. P. Farnsworth & Co. v. Electrical Supply Co.

McCORD, Circuit Judge.

I concur in the reversal of this cause but I disagree with that portion of the opinion which holds that Electrical Supply Company filed suit in time. The Hurd Act, 40 U.S.C.A. § 270 , provides that suits by furnishers of labor and materials “shall be commenced within one year after the performance and final settlement of said contract, and not later.” The pivotal words in the' statute are not “final payment”, but “final settlement”. Illinois Surety Company v. United States, 240 U. S. 214, 218 , 36 S.Ct. 321 , 60 L.Ed. 609 .

Farnsworth’s contract called for the construction of a $1,178,000 building on the Marine Hospital Grounds. The record shows that the contract was completed within the agreed time and the letter from the Assistant Secretary of the Treasury on July 2, 1932, recited this fact. The letter further stated, “There is a balance due you under this contract of $4,332.80. You will be paid at this time on account of your said contract the sum of four thousand two hundred fifty dollars ($4,- *155 250), the balance retained ($82.80), being considered sufficient to protect the Government's interests pending final settlement of your contract.”

Farnsworth had removed a portion of a brick wall on the hospital grounds to make a driveway to facilitate the moving of materials to the work site. The record shows that the $82.80 referred to in the letter of July 2, 1932, was retained by the Government to take care of the cost of replacing the brick wall in the event Farnsworth did not do so. This small sum was not being withheld pending final settlement of the $1,178,000 contract. Final - settlement was in all things consummated as shown by the letter. The opening in the wall was being kept open by the contractor to move materials to another building which was being constructed by him and under another and different contract from the one here under consideration. The Government, through duly authorized channels, determined the final balance due Farnsworth on the contract on July 2, 1932, and I think that for this reason the suit filed by Electrical Supply Company was filed too late. Illinois Surety v. United States, 240 U.S. 214 , 36 S.Ct. 321 , 60 L.Ed. 609 ; Globe Indemnity Company v. United States, 291 U. S. 476 , 54 S.Ct. 499 , 78 L.Ed. 924 ; Consolidated Indemnity & Ins. Company v. W. A. Smoot & Co., 4 Cir., 57 F.2d 995 .