Petition for Writ of Certiorari — Fleisher Engineering & Constr. Co. v. United States Ex Rel. Hallenbeck

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7 Oe j Yice- Supcame Court, U.S

Fi | oh vr Y ) FILED

FER 14 1940 |

: SEARLES ELMORE nia

SUPREME COURT OF THE UNITED -StATEs——

OCTOBER TERM, 1939

FLEISHER ENGINEERING & CONSTRUCTION CO.

anp JOSEPH A. BASS, Done Bustness as JOSEPH

A BASS CO., ET AL.,

Petitioners,

vs.

UNITED STATES OF AMERICA For THE Use anv BENE-

rir or GEORGE S. HALLENBECK, Dorye Business

Uxper THE AssuMED Name anp Styte or HALLEN-

BECK INSPECTION AND TESTING LABORATORY

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES CIRCUIT COURT OF APPEALS

FOR THE SECOND CIRCUIT AND BRIEF IN SUP-

PORT THEREOF

J Frank GIBBONS,

Counsel for Petitioner.

2

.

7 on

INDEX.

Suspect Inpex.

Petition for writ of certiorari.

Opinions below ..... Da NAR =i?

Judgment in District Court...........

NONE io yeh oS. sim «ce eet va |

Statement as to purpose and nature of action...

Questions litigated in the District Court... ...

Errors to be urged ...........---- «eee eees:

Review sought in this Court............

Reasons for granting the writ......... eee

Exhibit A—Opinion of D. C. U. S., S. New York, in

ease of United States for use of Morris Speckler

Plumbing Corpn. v. Albert Development Corpora-

OEE SR einer ARS ene a Ae ee are eet

Exhibit B—Decision of D. C. U. S., N. Alabama in

the case of United States for use of Birmingham

Slag Co. v. W. J. Perry et al.........--.--+-.++->

Brief in support of petition for writ of certiorari...

pe Oe i Do Rater ante ne ITT Re a tee

BPI Soo ors er er ke eh ae EOS PY

Point I—As to terms of statute relative to

notice as condition precedent......... oe

Point II—As to general rules regardin

statutory construction on subject of notice.

Point Ill—Distinguishment of authorities

cited in opinions in courts below...

Cases CITED.

Allen v. Strickland, 100 N. C. 225, 6 8. E. 780....

American Fire Ins. Co. v. Banks, 83 Md. 22, 34

Sn Dok ee ae ea aia gic ae'nn Wats Lat

Blumberg, In re, 149 App. Div. 303......-..------ >.

Board of Lake Co. Commissioners V. Rollins, 130

U. 8. 662, 32 L. Ed. 1060, 1063........-.--------:

Boland v. Sokolski, 56 Mise. 333.......-----+--°-

—6144

Page

DAA Cr Co bo bo

ii INDEX

Page

Bredlove v. General Baking Co., 138 Kas. 143 28

Burck v. Taylor, 152 U.S. 632, 654, 38 L. Ed. 578,

__., BRERSEA SS gern Jeeves) Saeki, celal iL aeeeinaa 7, 24

Carson v. Village of Dresden, 202 N. Y. 414... 25

Clark v. Adams, 33 Mise. 159, 164 ae = 25

Constance v. Leigh, 122 Oh. St. 468... . 28

Cuccia v. Roberts, 204 App. Div. 653... | 25

Crooks v. Harrelson, 282 U.S. 55, 60, 75 L. ‘Ed. 156

i SRY ALA safe oe A | . 7

Curry v. City of Buffalo, 135 N. Y. 366 | 25

Eckel v. Sinclair Refining Co., 133 Kas. 285 28

Empire Siate Surety Co. v. City of Des Momes, 152

=: 29

Fleischmann v. U.S. 270 U. S. 349, 360, 70 L. Ed. 624,

Re er Bees Bee 27

Fourth National Bank’ v. . Francklyn, 120 U. 8. 747,

ER ne ee terre 8

Haldane v. U. S.,69 Fed. Rep. 819,822... 24

Hamilton v. Rathbone, 175 U. S. 414, 419, 44 a fd.

Se et rs ve 7

Harbacheck v. Moorland Tel. Co., 208 Ia. 552, 226

DR ee oie ania ae ace Lae eres 25

Harris v. Minn. Inv. Co., 265 Pee, O06...<....... 25

Harrisburg v. Rickards, 119 U.S. 199, 30 L. Ed. 358. 8, 22

Hill-v. American Surety Co., 200 U. S. 197, 50 L. Ed.

ABER GSy ieate aoa he Bare Nas Pye one glen ame Rae rate 23

Horn v. Elitott, 132 Kas. 454................... 28

Illinois Surety Co. v. U. S., 240 U. S. 214, 60 L. Ed.

Aa Rei AES Sar Raion eat aan ae eral AL boa ae 22

Illinois Surety Co. v. John Davis Co., 244 U.S. 376,

I ER MU I Sin ne oe aelas «ners 8, 27

Leterman, In re, 260 Fed. Rep. 543 ....-...... 25

Lyon v. Davis, 95 F. (2d) 103............ a ace ee 24

Mankin v. U. S., 215 U.S. 533, 54 L. Ed. 315... 23

Mason v. Hanger Co., 219 Fed. Rep. 526. .......... 8

McDermott v. Board of Police, 25 Barb. 635 ...... 24

Mitchell v. Clary, 20 Mise. 595, 597.............. My 24

Moore v: Bessie, 35 Cal. 184....................... 25

New Britain Lumber Co. v. American Surety Co., 113

No ahr ns Ck Ea cw sie 28

2

INDEX ill

Page

Ottobein v. B. d C. Co., 272 N. Y. 149, 184. ...... 25

People v. Turnpike Co., 30 Cal. 182............ 25

People ex rel. v. L. d B. R. R.Co., 13 Hun. 211... .. 24

Pollard v. Bailey, 87 U.S. 527, 22 'L. Ed. 376........ 8

Rathburn v. Acker, 18 Barb. 393................. 24

Reed vy. Alltaon, Gi Cal. G62... ...- 2... ee cee 25

Reinig v. City of Buffalo, 102 N. Y.308............. 25

Republic Nat. Bank & Trust Co. v. Massachusetts .

Bonding & Ins. Co., 68 P. (2d) 445.............. 29

Silver v. F. € D. Co., 53 Pae. tea) Me coc geo ee 29

Smith v. Mosher, 169 Fed. Bon. 490... .......:. 23

Smith Iron Werks v. Maryland Cas. Co., 275 Mass.

, Serer gree ey eae ee ee eee Die arene 28

Smith v. Smith, 4 Green (Iowa) 266................ 25

Southern Surety Co. v. Jenner, 212 Ia. 1027......... 28

Steinhardt v. Bingham, 182°N. Y. 326, 329...... 24

Sullivan, In re, 31 Mise. 1, 4, affd. 53 App. Div.

eer oe ee ea es leet ee 24

Texas Co. v. Schriewer (Tex. 1931, 38 S. W. (2d)

Oe es ee he aes ee 28

Thatcher v. Powell, 6*Wheat, 119, 5 L. Ed. nu... 7, 24

U.S. v. Albert Development Corp. (not reported) ae 8

U.S. v. Lexington Mill & Elevator Co., 232 U.S. 399,

CORP Bee es i Oe ree 7

U. S. v. McCord, 233 U. S. 157, 162, 58 L. Ed. 893,

er eee 8, 22

U.S. for use of Bryant v. N. Y. Ste aunts Co., 235

U. 8. 327, 337, 59 L. Ed. 253....... 26

Vermont Marble Co. v. National Sure ty C O., 213 Fed.

i ree eae cadences 27

Washington Market Co. v. Hoffman, 101 U. S. 112,

Re ee ee 8 avn ce aa nue ein eee a vies 7

Weaver v. Shankland Walnut Co., 131 Kas. 773... . 28

Weiner v. Commercial Cas. Co., 109 N. J. L. 119... 25

Whitmyer v. International Business Machine Co... 25

Text Books Cirep.

60 Corpus Juris S04 .. ..«.. 2-6-0 00s--; she pene 7

25 Rulifig Case Law 982 ............ ey RERA Geers 7

SY eee,

mit

a

|

| iv INDEX

| Statutes Crrep anv Quortep.

q Page

Heard Act, 40 U. S. C. A. 270, being Act of February

at 24, 1905, Ch. 778, as amended by the Act of March

| i Os Se ee nl ee Ee 4,8

Miller Act, 40 U. S. C. A. 270-b, 49 Stat. 794, being

Act of August 24, 1935, Ch. 642, See.2............ 4

1;

it ,

1

Stal Sk NER REE I EOS RR OE De I RIN agile Ma

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1939

No. 726

FLEISHER ENGINEERING & CONSTRUCTION CO.

axnp JOSEPH A. BASS, Dorxe Business as JOSEPH

A. BASS CO., ROYAL INDEMNITY COMPANY anp

MARYLAND CASUALTY COMFANY, Derenpants-

APPELLANTS IN Court BELow, |

Petitioners,

vs.

UNITED STATES OF AMERICA ror THE Use and BENE-

rit or GEORGE S. HALLENBECK, Dorne Bustness

Unper tue AssumepD NAME AND STYLE OF HALLEN-

BECK INSPECTION AND TESTING LABORATORY,

APPELLEE In Court BELow,

Plaintif'-Respondent

PETITION FOR WRIT OF CERTIORARI

To the Honorable Chief Justice of the United States amd

the Honorable Associate Justices of the United States

Supreme Court.

Fleisher Engineering & Construction Co., Joseph A. Bass,

doing business as Joseph A. Bass Co., Royal Indemnity

Company, and Maryland Casualty Company, respectfully

la

Sat SAREE SNE: DR BAS BR ss PES

2

pray that a writ of certiorari issue to review the judgment

of the United States Circuit Court of Appeals for the Sec-

ond Circuit, entered on the 12th day of December, 1939,

in the action entitled United States of America for the use

and benefit’ of George S. Hallenbeck, doing business under

the assumed name and style of Hallenbeck Inspecting &

Testing Laboratory against Fleisher Engineering & Con-

struction Co., Joseph A. Bass, doing business as J oseph A.

Bass Co., Royal Indemnity Company, and Maryland Cas-

ualty Company (R. 71) which affirmed a judgment of the

United States District Court, for the Western District of

New York, in said action hereinafter referred to. .

Opinions Below

1. An opinion was written in the United States Circuit

Court of Appeals by Hon. Augustus N. Hand (R. 65-71),

published 107 F. (2d) 925.

2. Opinion of Hon. John Knight, District J udge, rendered

in this action (R. 34) (Not published).

8. Opinion of Hon. John Knight, District Judge, rendered

in a companion action (R. 35-40) (Not published).

Judgment in District Court

Judgment in favor of United States of America for the

use and benefit of George S. Hallenbeck, doing business

under the asswned name and style of Hallenbeck Inspect-

ing & Testing ‘Laboratory against Royal Indemnity Com-

pany, Maryland Casualty Company, Fleisher Engineering

& Construction Co., and Joseph A. Bass, doing business as

Joseph A. Bass Co., for $1,130.53 (R. 55), order pursuant to

which judgment was entered (R. 53 and 54), order denying

previous motion on behalf of the defendants for summary

judgment (R. 33).

3

Jurisdiction

The jurisdiction of the Supreme Court is invoked under

the Judicial Code, section 240 (a), 28 U. S. C. A. 347, Act

of February 13, 1925, c. 229, See. 1.

Statement as to Purpose and Nature of Action

This is an action at law brought in the United States

District Court, for the Western District of New York, on

August 24, 1938, by the United States of America, for the

use and benefit of George S. Hallenbeck, d. b. a. Hallenbeck

Inspecting & Testing Laboratory, as plaintiff, against

Fleisher Engineering & Construction Co. and Joseph A.

Bass, d. b. a. Joseph A. Bass Co. as principal, and Royal

Indemnity Company, and Maryland Casualty Company, and

others, as sureties, defendants, to recover the sum of

$1,012.87 (R. 8), as the value of work and labor performed

at the instance and request of Easthom Melvin Co. Inc.

(R. 7). There was no direct contractual relationship be-

tween the use-plaintiff and any of the defendants. The

Easthom Melvin Co., Inc. was a subcontractor of Fleisher

Engineering & Construction Co. and Joseph A. Bass in

performance of a contract between them and the United

States of America, providing for the construction of super-

structure of Kenfield Housing Project H-6703 in Buffalo,

N. Y. under standard form of contract and government pay-

ment bond to the United States, and set forth in para-

graphs sixth and seventh of the complaint (R. 5 and 6).

~The bond upon which recovery has been had was executed

by the said contractors as principals, by the Royal Indem-

nity Company as surety to the extent of $359,946.00, and the

defendant, Maryland Casuaity Company, as surety to the

extent of $79,988.00 (R. 6). The aforesaid defendants are

the petitioners herein, and each of them appeared and inter-

posed answers (R. 10-25). None of the other sureties named

2a

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4

in the bond were served with the summons nor in any man-

ner appeared. The right of action depends upon whether

or not the use-plaintiff has complied with the.statute on the

subject of notice which reads as follows: “3

‘*Kivery person who has furnished labor or material

in the prosecution of the work provided for in such con-

tract in respect to which a payment bond is fur-

- nished * * * and who has not been paid in full there-

for before the expiration of a period of ninety days

- after the date on which the last of the labor was done or

performed by him, or materials furnished or supplied

by him, for which such claim is made, shall have the

_vight to sue on such payment bond for the amount or

balance thereof unpaid at the time of institution of such

suit and to prosecute such action to final execution and

judgment for the sum or sums justly due him; provided,

however, that any person having direct contractual

relationship with a subcontractor but no contractual

relationship express or implied with the contractor fur-

nishing said payment bond shall have a right of action

upon the said pay ment bond upon giving written notice

to said contractor within ninety days from the date on

which such person did or performed the last of the labor

or furnished or supplied the last of the material for

which such claim is made, stating with substantial ac-

curacy the amount claimed and the name of the party

to whom the material was furnished or supplied, or for

whom the labor was done and performed. Such notice

shall be served by mailing the same by registered mail,

postage prepaid, in an envelope addressed to the con-

tractor at any place he maintains an office, or conducts

his business, or his residence, or in any manner in which

the United States Marshal of the District in whici the

public improvement is situated is authorized by law to

serve summons.’’

Act of August 24, 1935, Chapter 642, Sec. 2, 49 Stat.

794; 40 U.S.C. A. 270 b.

(See opinion of Hon. A. N. Hand, in court below (R.

66-68).)

4)

After issue was joined your petitioners, as defendants in

the action, served written interrogatories pursuant to the

provisions of Rule 33 of the Rules of Civil Procedure (R.

26-28). Answers to those interrogatories were given by the

use-palintiff (R. 29). The substance of it is that the use-

plaintiff alleges that written notice under the statute was

given to the defendant, Fleisher Engineering & Construc-

tion Co., on June 3, 1937.

That no separate notice was given to Joseph A>Bass but

a claim was made that notice to the Fleisher Engineering &

Construction Co. was also notice to Bass. It was also stated

in answer to question No 7 that the notice ‘‘was delivered

by mail and to the best of plaintiff’s information ard belief

was received at the office of Fleisher Engineering & Con-

struction Co., 233 Langfield Drive, Buffalo, N. Y., either on

June 3, 1937, or June 4, 1937. It was sent by ordinary mail

and was deposited in the United States Postoffice Box in the

vicinity of 56 Pearl St., Buffalo, N. Y., on June 3,4937, ad-

dressed to the said Langfield Drive address’’ (R. 29). In

answer to the eighth interrogatory it is claimed that the

notice to Fleisher Engineering & Construction Co. operated

as notice to Joseph A. Bass (R. 29). The notice in question

was appended to the answers (R. 30 and 31). It is directed

to C. Leslie Weir, Project Engineer (R. 30, fol. 89, R. 51).

C. Leslie Weir represented the United States Government,

and not the contractors, or either of them (R. 43, fol. 129).

Upon the pleadings, the interrogatories, and answers to

the same, and the affidavit of George S. Hallenbeck (R.

41-44), the District Court granted the order directing the

entry of judgment appealed from (R. 53 and 54).

Questions Litigated in the District Court

1. In order to maintain an action under this statute must

the notice required thereby, when given by mail, ‘‘be served

ASA PRR REN RSS PLP TLL TENS ES eis

:

A ee ER EE SNS

6

by mailing the same by registered mail’’ or may some other

substituted service, not provided for in the statute operate

as a compliance therewith?

2. Is a notice directed to an officer, or employee, of the

United States government and not to the contractor, or to

anyone representing the gontractor, no matter how given,

sufficient notice under said statute?

Errors to be Urged

The District Court and the Cireuit Court of Appeals for

the Second Circuit erred in refusing to grant your peti-

tioner’s motion for summary judgment dismissing the com-

plaint and in granting the motion of plaintiff (respondent

herein) for judgment appealed from.

Review Sought in This Court

Each of the foregoing questions are presented to this

Court and your petitioners respectfully pray that the same

may be reviewed thereby, to the end that the applicable rule

may be finally and authoritatively settled.

Reasons for Granting the Writ

This action has been brought under the Federal statute

(Miller Act above quoted), to recover upon a liability there

given. The Federal courts are given exclusive jurisdiction

of the aeticn. All questions w'tich arise thereunder are

strictly Federal questions which must be determined by the

Federal courts.

(A) The Circuit Court of Appeals for the Secend Circuit

has decided the Federal questions herein involved in a way’

probably in conflict with applicable decisions of this Court.

While the questions here presented have never been

decided by this Court in any action brought under this stat-

ute, nor, as we believe, by any Circuit Court of Appeals,

A Ht er eee ET

) 7

other than the decision in this case, nevertheless this

honorable Court has distinctly held in similar cases that

wherever a right depends upon a statutory notice, the man-

ner in which the statute requires the notice to be given must

be exactly followed.

Thatcher v. Powell, 6 Wheat. 119, 5 L. Ed. 221.

The rule has been declared and followed in

Burck v. Taylor, 152 U.S. 634, 654, 38 L. Ed. 578, 585.

In all cases of statutory construction, the words of the

statute, if plain and clear, furnish the infallible guide for its

interpretation. The wisdom of the law itself is a question

for congress only.

Board of Lake County Commissioners v. Rollins, 130

U. S. 662, 32 L. Ed. 1060, 1063;

Hamilton v. Rathbone, 175 U. S. 414, 4f9, 44 L. Ed. 219,

“ 221;

Washington Market Co. v. Heyman, 101 U. S. 112, 25

L. Ed. 782.

U.S. v. Lexington Mill & Elevator Company, 232 U. S.

399, 410, 58 L. Ed. 658, 662;

Crooks v. Harrelson, 232 U. S. 55, 60, 75 L. Ed. 156, 175;

25 Ruling Case Law, 982, 59 C. J. 984.

This Miller Act is a successor to a previous act called the

Heard Act. While that act contained no provision for

notice similar to the one ngynres by the Miller Act, it did

provide that

r

S

‘‘if no suit should be brought by the United States within

six months from the completion and final sett'ement

of said contract, then the person or persons supplying

the contractor with labor and materials * * * shall

be and are hereby authorized to bring suit in the name

of the United States * * * against said contractor

and his sureties and to prosecute the same to final judg-

ment and execution; provided that where suit is in-

3a

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8

stituted by any such creditors on the bond of the con-

tractor it shall not be commenced until after the com-

plete performance of the said contract and final settie-

ment thereof and shall be commenced within one year

after the performance and final settlement of the said

contract, and not later; * * * ”

Act of February 24, 1905, c. 778, as amended by the Act of

March 3, 1911, c. 231, Sec. 291; 40 U.S. C. A. 270.

Under that statute this Court has held that the limitations

therein imposed are conditions precedent to the right to

maintain the action and must be strictly followe1, other-

wise the court acquires no jurisdiction to entertain the

action.

U.S. ex rel. Texas Portland Cement Co. v. McCord, 233

U. S. 157, 162, 58 L. Ed. 893, 897;

Harrisburg v. Rickards, 119 U. S. 199, 30 L. Ed. 358;

Illinois Surety Co. v. U. S., 240 U. S. 214, 60 L. Ed. 609;

Pollard v. Bailey, 87 U. S. 527, 22 L. Ed. 376;

Fourth National Bank v. Francklyn, 120 U. 8. 747, 30

L. Ed. 825.

The Miller Act adds another condition precedent, viz.:

notice. 2

The decision of the Circuit Court of Appeals in the case

at bar is believed to be in conflict in principle with a previous

decision of the same court.

Mason & Hanger Co. v. Sharon, 219 Fed. 526.

(See opinion of Judge Hand in court below (R. 70).)

The United States District Court for the Southern Dis-

trict of New York, prior to the decision of the Circuit Court

of Appeals in this case, had decided this exact proposition |

to the contrary in the case of U. 8S. A. for use etc. v. Albert

Development Co. et al. The unpublished opinion of Mandel-

baum, D. J., is hereto annexed and marked ‘‘ Exhibit A’’.

9

| Another decision rendered by the District Court for the

Southern Division of the Northern District of Alabama in

| the case of the United States of America for the use of Bir-

mingham Slag Company, a corporation, against W.J. Perry,

| etc., is of similar import. No opinion has been written in

that case, but the decision of Judge Murphree so far as

pertinent is hereto annexed and marked Exhibit B.

| (B) The Circuit Court of Appeals has decided the fore-

| going important question of Federal law which has not been

) but should be settled by this Court.

The statute is a new one and is applicable throughout the

country. It is important that a rule of law be established

: which shall universally be followed.

| The well established rules of law respecting the subject

should not be considered to be abrogated without a decision

of this Court on the subject.

Your petitioners respectfully refer to their brief which

accompanies this petition for a further elucidation of their

position.

For the reasons aforesaid your petitioners respectfully

pray that this petition may be granted.

FLeisHer Encineerine & Construction Co.,

JosepH A. Bass, “,

Roya. Inpemnity Compdyy,

MaryLanp CasuaLty CoMPAny,

By Frank Grppons,

Their Counsel. ~

Frank GIsBons, 4 >

Counsel for Petitioners,

618-630 Walbridge Bldg., oo

Buffalo, N.Y. :

Pe: CADIS eS acho ey phate RII of 8 Po eR. ARI Yanna che ete INR ANCE SG teint

UR el Pw ag NR tr art kage

mn A NB eh BEE TI Rg MM I SN

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10

State or New York,

County of Erie, ss:

Frank Gibbons, being duly sworn, says that he is over the

age of twenty-one years, resides in the City of Buffalo, N. Y.,

and is counsel for each and all of the petitioners named in

the foregoing petition; that he has read the said petition

and knows the contents thereof, and that the statements of

facts therein contained are true to the best of his knowledge,

information and belief.

Frank GIBBons.

Subscribed and sworn to before me this 10th day of Janu-

ary, 1940.

Gertruve B. Townsenn,

[SEAL. ] Notary Public, Erie Co., N.Y.

A ee ie 4 OUP ane

11

EXHIBIT ‘‘A’’..

UNITED STATES DISTRICT COURT, SOUTHERN

DISTRICT OF NEW YORK

Civ. #433

Unirep States or America on Behalf of and for the Use of

Morris SpeckLteR Puumpine Suprpty Corporation, Plain-

tif, ;

against

ALBERT DEVELOPMENT CorporATION and New AMSTERDAM

CasuaLty Company, Defendants

Memorandum

The motion is to strike out the separate defenses of the

defendants contained in their answer, and for further relief,

the use-plaintiff seeks a bill of particulars regarding these

defenses.

_ Summarized, the defenses plead the use-plaintiff’s failure

to comply with the provisions of the Miller Act, (40 U. S.

C. A. Sec. 279 a, b, c, and d), in failing to forward a notice

to the defendant by registered mail as required by the stat-

ute; that the defendants have paid the sub-contractor in

full, who in turn has paid the use-plaintiff in full.

From the pleadings and affidavits, it appears that the

notice was forwarded to the defendants by ordinary mail-

unregistered. I believe from a.reading of the statute, the

provision for notification by registered’ mail is mandatory

and that ordinary mailing is insufficient to comply with the

statutory provision relating thereto. is is asnit between

parties having no direct contractual relationship with each

othe7, express or implied. A failure to strictly comply could

often lead to fraudulent practices. I think it is immaterial

whether or riot the defendants had actual notice of non-

payment. The defense is sufficient in law.

With respect to the request for a bill of particulars as

to this defense, the motion is granted in part and the de-

_fendants are required to furnish the use-plaintiff w’thin

~ ten days from entry of this order only the particulars de-

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12

manded in Items No. 5, 6, 6a, 6b and 6c of the use-plaintiff’s

notice of motion.

The defenses of payment are obviously sufficient in law.

Payment from the subcontractor to the use-plaintiff in full

must defeat the action.

With respect to the application for a bill of particulars

as to these defenses, the same is denied. Payment is an

affirmative defense to be pleaded and proven by the defend-

ants, and the state courts have ruled that generally the de-

fendants need not furnish particulars of such defense.

(Yantze Ins. Co. vs. Stark & Co., 186 N. Y. Supp. 410;

Elbin v. Equitable Life Assurance Soc., 177 App. Div. 458).

Settle order on two days’ notice, in accordance with the

above memorandum.

Dated, September 11th, 1939.

SaMvuEL Manpetsaum, U.S. D. J.

EXHIBIT “B’’.

IN THE DISTRICT COURT OF THE UNITED STATES

FOR THE SOUTHERN DIVISION OF THE NORTH-

ERN DISTRICT OF ALABAMA.

No. 4986.

Unirep States or America for the Use of BrrmincHam SLaG

Company, a Corporation, Plaintiff,

VS.

W. J. Perry, P. E. Kipper, and Unitrep States Fiverity &

Guaranty Company, a Corporation, Defendants.

Findings of Fact and Conclusions of Law.

This action having been tried upon the facts without a

jury, the Court pursuant to Rule 52 finds the facts and

states its conclusions of law as follows:

On, to wit, June 30, 1938, the United States of America,

through its Department of Agriculture Farm Security Ad-

ministration, for the consideration of $19,967.00 agreed to

be paid, let a written contract to the defendant, W. J.

de

'

13

Perry, for the construction of a store and filling station as

a part of the Cahaba Project of the said Farm Security

Administration at Cahaba Subsistence Homesteads in Jef-

ferson County, Alabama.

(Here follows in extenso provisions of the contract be-

tween the Agricultural Farm Security Administration and

W. J. Perry followed by complete copy of the performance

bond, then followed by complete copy of the payment bond.)

The provisions of the payment bond are in the usual form

and so far as pertinent reads as follows:

The Condition of this Obligation is such, that whereas the

principal entered into a certain contract, hereto attached,

with the Government, dated June 30, 1938, for the complete

construction of a brick veneer store and filling station, in-

cluding plumbing and wiring, sidewalks, curb and gutter,

pavement, gasoline storage tanks, etc. at the Cahaba Project

of the Farm Security Administration, United States De-

partment of Agriculture, in Jefferson County, Alabama.

Now, therefore, if the principal shall promptly make pay-

ment to all persons supplying labor and material in the

prosecution of the work provided for in said contract, and

any and all duly authorized modifications of said contract

that may hereafter be made, notice of which modifications

to the surety being hereby waived, then this obligation to

be void; otherwise to remain in full force and virtue.

On July 7, 1938, the defendant, W. J. Perry, in writing

sublet a part of said contract to the defendant, P. E. Kid-

der, Kidder’s bid for such work as he was to perform being

in the amount of $8,100.00. The last paragraph of said sub-

contract reads as follows:

‘‘Payments to be made as follows, we are to furnish

you with money to pay your weekly payroll and the

balance to be paid according to specifications as we are

paid. The balance to be paid on the com; 'etion and

acceptance of your work by Contractor and ‘le Govern-

ment Representative in charge,’

Le PE EO EE Oe ee — a

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WM. ie EE IGS CR BOT 5, MUS

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14

The plaintiff, Birmingham Slag Company, furnished the

defendant, Kidder, building materials which were used by

him as such subcontractor in said Cahaba Project in the

amount of $4,344.95, the last of which materials were fur-

nished on. September 28, 1938. Defendant, P. E. Kidder,

was dt'y approved on July 12, 1938, as a subcontractor by

the Farm Security Administration. The original contract

was completed and accepted by the Farm Security Admin-

istration, on October 18, 1938, and on that date the defend-

ant, W. J. Perry, paid the defendant, P. E. Kidder, $1,824.11

which was the balance remaining unpaid under said sub-

contract from Perry to Kidder, including extras, defendant

Perry having had advanced Kidder money from time to

time prior to said date.

On December 1, 1938, the plaintiff, Birmingham Slag

Company, wrote the Farm Security Administration at

Montgomery, Alabama, by ordinary mail, stating that it had

an unpaid account against the subcontractor, P. E. Kidder,

in the amount of $4,344.25 for materials furnished P. E.

Kidder on the above mentioned project and inquiring

whether the contractor had completed the work on said

project and had received payment therefor.

On December 10, 1938, the Farm Security Administration

at Montgomery, Alabama, wrote W. J. Perry at Winfield,

Alabama, by ordinary mail, transmitting a copy of the letter

of December 1, 1938, that had been received by it from the

Birmingham Slag Company, and advising the defendant

Perry that the final payment to him under his said contract

would be held up by it pending receipt of affidavit from the

Birmingham Slag Company that it had been paid in full,

and that his attending to that matter as expeditiously as

possible would be appreciated. This letter from the Farm -

Security Administration, with the enclosure mentioned, was

received by Defendant Perry during the week of December

12, 1938. Said final payment so withheld amounted to

$3,310.50, and has not yet been paid Defendant Perry. On

December 10, 1938, by due mail the district Engineer of the

said Farm Security Administration at Montgomery, Ala.,

wrote plaintiff a letter, which it received in due course, and

which letter and its attachment read as follows:

ee

_ /

15

‘‘United States Department of Agriculture.

Farm Security Administration,

Montgomery, Alabama. "

In Reply Refer to P5-D2-MLM.

ow

Dec. 10, 1938

Subject: Cahaba Store and Filling Station.

Birmingham Slag Company,

2019 Sixth Avenue, North,

Birmingham, Alabama.

GENTLEMEN:

Your letter of December 1st, addressed to the Birming-

ham Office of this Administration, has been referred to

us for handling.

You will please find attached a copy of a letter to Mr.

W. J. Perry, contractor for the captioned project, who

is responsible to this Administration for the construc-

tion of the store and filling station, informing him that

it will be incumbent upon him to pay your account, or

cause Mr. P. E. Kidder to pay same, before final pay-

ment to him on the aforementioned project will be

made. We trust that you will hear from Mr. Perry or

Mr. Kidder in the very near future.

Your attention is invited to that portion of the attached

letter stating that this office will require an affidavit

from you before final payment will be made to Mr.

Perry.

Sincerely yours,

Frankityn H. McGowan,

District Engineer.’’

Attachment. ,

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16

‘‘Farm Security Administration,

Montgomery, Alabama.

R5-D2-MLM.

Dee. 10, 1938.

Subject: Cahaba Store and Filling Station.

Mr. W. J. Perry,

Winfield, Alabama.

Dear Mr. Perry:

Transmitted herewith is a copy of a letter from the

Birmingham Slag Company, advising us of an unpaid

account against Mr. P. E. Kidder, subcontractor for

the Cahaba Store and Filling Station, in the amount

of $4344.25.

Your final payment is being held up pending receipt of

an affidavit from the aforementioned company to the

effect that they have been paid in full. We shall ap-

preciate your attending to this matter as expeditiously

as possible.

Sincerely yours,

Franktyn H. McGowan,

District Engineer.

Attachment.

MLM-mee 12/10/38.

ec: Mr. J. H. Woon,

Mr. P. E. Kipper,

BrrMincHaM Siac Company,

Mr. Micuagn L. Mascta.’’

On December 12, 1938, the defendant Perry wrote by ordi-

nary mail the Farm Security Administration at Mont-

gomery, Alabama, which letter it received 12/15/38, inquir-

ing as to why the final payment was being held up, which

letter reads as follows:

OS ee

17

‘*Building Service.

S. J. Perry,

Building Materials,

Phone No. 1-J,

Winfield, Alabama.

Dee. 12, 1938.

United States Dept. of Agriculture,

Farm Security Administration,

Attention, Mr. Franklin McGowan,

Montgomery, Ala.

I have not received my final check on the Trussville

Project yet, am needing it very bad, so please see that

this is sent me at once, i sent out to trussville yester-

day to pay Gleen Mere the little account i was due them,

regarding the other which seems has not paid up in full,

Subcontractors, i feel sure they will take care of their

obligations, your office through Mr. farrison required

that i pay all subcontractors in full taking receipts,

this i done, Garrison informed me that their approved

contracts, released me from being responsible for any

of their accounts, so please see that my check is

forwarded to me at once. |

Yours very truly, W. J. Perry.’’

And on the 15th of Dec., 1938, ‘a reply to said letter was by

ordinary mail sent to defendant Perry by said Farm Se-

curity Administration at Montgomery, Ala., which he re-

ceived in due course of mail, and which reads as follows:

‘‘Montgomery, Alabama Rd-D2-CLT

Dec. 15, 1938

Subject: Cahaba Store and

Mr. W. J. Perry Filling Station

Winfield, Alabama ~

Dear Mr. Perry:

This will acknowledge receipt of your communication

dated December 12, 1938, requesting that the final pay-

ment on the captioned contract be released.

- baka? a,

SO NDR TAY ag SS TS ONE NRE a BREE ok! Sct og

Dore e et SP ena?

18

We regret to advise that it will be necessary that this

office be furnished sufficient evidence that Mr. Kidder’s

obligation to the Birmingham Slag Company has been

satisfied as outlined in our letter to you under date of

December 10, 1938, before your final payment may be

released. In this connection we invite your attention

to Form FSA-GEN 65 in your contract, Page 14, Para-

graph 35—Payments Withheld.

Sincerely yours

Frankiy H. McGowan,

District Engineer.

CLT /lw-12/14/38

583695-12/12/38”?

Said paragraph 35 of said contract reads as follows:

‘‘Paragraph 35, Payments Withheld.’’

‘“‘The Government may withhold from any payment

due the contractor so much as the Contracting Officer

may determine is necessary to cover: (1) Claims of

the Government, (2) ciaims filed against the Contractor

related to the work, (3) unpaid accounts of subcontrac-

tors or for labor and materials, (4) any excess in prior

payments made by the Goverrment to the Contractor,

and (5) injury or damage caused by acts or omissions

of the Contractor, for which the Government might be

liable. When such grounds are removed, the sum or

sums withheld shall be included in the next monthly

payment to the Contractor.’’ (Emphasis supplied.)

Defendant W. J. Perry through the correspondence above

set out acquired actual knowledge of the said claim of the

beneficial plaintiff, Birmingham Slag Company, within the

ninety day period from the date the last material was so

furnished by it to the defendant Kidder, but at no time

within ninety (90) days from the furnishing of the last mate-

rial to defendant, Kidder, did the plaintiff, Birmingham

Slag Company,-serve upon the defendant Perry by regis-

tered mail in an envelope addressed to said W. J. Perry a

ee NE i ene ene ee

sd

19

written notice stating with substantial accuracy the amourt

claimed and the name of the party to whom the materials

were furnished, nor did it serve such notice in the manner

in which the United States Marshal of this District is author-

ized by law to serve summons.

From the foregoing facts, the Court finds and concludes:

That the Birmingham Slag Company did not comply with

Section 270 (b), Title 40, United States Code Annotated, as

to giving and serving written notice upon the general con-

tractor and defendant, W. J. Perry, and is not entitled to a

recovery against the defendant, W. J. Perry, and his surety,

United States Fidelity & Guaranty Company.

The Court holds as to the Plaintiff that a compliance with

this Section was a condition precedent to its right to main-

tain this action against the general contractor and defend-

ant, W. J. Perry, and his surety, United States Fidelity &

Guaranty Company.

The Court is of the opinion that Section 270 (b), Title

40, United States Code Annotated, is unambiguous in its

terms and should be construed as written.

The Court holds that the plaintiff is entitled to a judg-

ment against the defendant, P. KE. Kidder, in the amount of

$4610.10 which includes the interest thereon at the legal

rate from the date the last material was furnished.

A judgment will be entered in accordance with the fore-

going findings and conclusions.

This the 8 day of November, 1939.

T. A. MurpHreg,

Judge of the United States District Court

For the Southern Division of the North-

ern District of Alabama.

c

_?

BLANK PAGE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1939

No. 726

FLEISHER ENGINEERING & CONSTRUCTION CO.

anp JOSEPH A. BASS, Dorne Business as JoserH A.

Bass Co., ROYAL INDEMNITY COMPANY anv MARY-

LAND CASUALTY COMPANY, DEFENDANTS-APPEL-

LANTS IN Court BELow,

Petitioners,

vs.

UNITED STATES OF AMERICA, ror tHE Use anv BeEn-

EFIT oF Greorce S. Hattenseck, Dorine Business UNDER

THE AssumMED NaME AND STYLE oF HALLENBECK INSPEO-

TION AND TEstTING LaBoraToRY, APPELLEE IN Court BELow,

Plaintiff-Respondent.

BRIEF OF PETITIONER ON APPLICATION FOR

WRIT OF CERTIORARI

Abstract

The nature and basis of this action is clearly set forth in

the foregoing petition (pages 3-5) and also in the opinion

of Judge Hand in the Circuit Court of Appeals (R. 65-69)

and does not need to be repeated.

Eh Oe ESN NE ATES

ee ee

ee a

22

ARGUMENT

Point I

‘*The statute thus crvates a new liability and gives a spe-

cial remedy for it, and upon well-settled principles the lim-

itations upon such liability become a part of the right cou-

ferred and compliance with them is made essential to the

assertion and benefit of the liability itself.’’

U.S. v. McCord, 233 U. S. 157, 162, 58 L. Ed. 893, 897.

The foregoing was the construction which this Court

placed upon the Heard Act, which preceded the Miller Act

under which this action is brought.

In accordance with that rule it was held that compliance

with the requirements as to conditions precedent are juris-

dictional and that if there was a failure of such compliance

no action could be maintained in respect to the following

matters:

1. If brought before the six months period specified in

the statute, even though the event proved that the United

States did not bring an action at all.

U.S. v. McCord (supra);

Illinois Surety Co. v. U. S., 240 U. S. 214, 217, 60 L. Ed.

609, 613.

2. The action could not be maintained unless commenced

before the expiration of the period of one year after per-

formance and final settlement.

The words of the statute made this clear. The rule, gen-

eral in its application, has been established by prior deci-

sions of this Court so clearly that no new declaration on

that subject was necessary.

Harrisburg v. Richards, 119 U. S. 199, 214, 30 L. Ed.

358.

23

When Congress came to enact the Miller Law, it must

have had in mind the judicial construction which had been

placed upon the Heard Act. It had been held that a ma-

terialman of a subcontractor was protected by the surety

bond even though the general contractor had fully paid the

subcontractor without any knowledge of the unpaid account

of the materialman.

Hill v. American Surety Company, 200 U. S. 197, 50

L. Ed. 437;

Smith v. Mosher, 169 Fed. 430;

Mankin v. U. S., 215 U. 8S. 533, 54 L. Ed. 315.

In many cases this created a most unjust situation com-

pelling double payment either by the contractor or by his

surety. To obviate that unjust situation Congress inserted

in the Miller Act a new condition, namely that a material-

man of a subcontractor should have no right of action unless

notice should be given to the contractor.

To obviate all disputes as to what may, or may not, have

been said at a given time the notice was required to be in

writing.

The statute provided a substituted service by mail, but to

obviate all disputes as to where it was sent, or when re-

ceived, it required that, if that means of substitution should

be adopted, it must be by registered mail so that proof could

be made either by the returned receipt, or, lacking that, by

the postoffice department. Experience had demonstrated

clearly that the temptation to falsely assert mailing, on

the one hand, or, on the otker, to falsely deny receipt of the

mail, was often too strong to be overcome.

The rule adopted by the court below (in spite of the plain

language of the statute) to the effect that written notice

received by the contractor obviated the necessity of statu-

tory notice would nullify the statute entirely. Logically it

would follow that actual knowledge however acquired would

irk Pend

iacereiSn’

RE PSS

°

24

» have the same effect, leaving the whole matter of notice

open to dispute and thwarting the plain legislative intent.

Point II

Under the general rules of statutory construction clearly

and well established, any notice required by statute to be

given must be given personally unless the statute directs

some means of substituted service. In that event the sub-

stituted service provided for by the statute must be strictly

followed. This statute provided for substituted service by

mail but specifically provided that when mailed it must be

by registered mail.

Whenever mailed in some other way than by registered

mail, it is not a substitution authorized by the statute and

is a nullity.

Thatcher v. Powell, 6 Wheat. 119, 5 L. Ed. 221;

Burck v. Taylor, 152 U. 8. 634, 654, 38 L. Ed. 578, 585.

The leading case on this subject frequently cited and

never questioned is

Rathburn v. Acker, 18 Barb. 393.

The decisions of the New York State courts have uni-

formly followed the above cited case ever since its decision.

McDermott v. Board of Police, 25 Barb. 635;

Re Blumberg, 149 App. Div. 303;

Steinhardt v. Bingham, 182 N. Y. 326, 329;

People, ex rel.,v. L. @ B. R. R. Co., 13 Hun. 211;

Mitchell v. Clary, 20 Mise. 595, 597;

Boland v. Sokolski, 56 Misc. 333;

Re Sullivan, 31 Mise. 1, 4; affd. 53 App. Div. 637.

The lower Federal courts have also followed the rule

laid down in Rathburn v. Acker (supra).

Haldane v. U. S., 69 Fed. 819, 822;

Lyon v. Davis, 95 F. (2d) 103.

Be BOON a de Pins Bac

25

Also the Second Circuit, Court of Appeals, from whose

decision this appeal is taken.

Re Leterman, Becher & Co., 260 Fed. 543.

The same has been the rule in many other jurisdictions.

We cite some of the leading cases, but there are many others

and none so far as we can find in conflict.

Reed v. Allison, 61 Cal. 461;

Moore v. Bessie, 35 Cal. 184;

Harris y. Minn. Inv. Co., 89 Cal. App. 396, 265 Pac. 306;

Smith v. Smith, 4 Green (Iowa) 266;

Harbacheck v. Moorland Tel. Co., 208 Ia. 552, 226 N. W.

Il;

Allen v. Strickland, 100 N. C. 225, 6 S. E. 780;

Weiner v. Commercial Cas. Co., 109 N. J. L. 119;

Am. Fire Ins. Co. v. Banks, 83 Md. 22, 34 A. 373.

People v. Turnpike Co., 30 Cal. 182;

Clark v. Adams, 33 Mich. 159, 164.

New York cases where the notice is jurisdictional are as

follows:

Reinig v. City of Buffalo, 102 N. Y. 308;

Curry v. City of Buffalo, 135 N. Y. 366;

Whitmyer v. International Business Machine Co., 267

N. Y. 28;

Carson v. Village of Dresden, 202 N. Y. 414; °

Cuccia v. Roberts, 204 App. Div. 653;

Ottobein v. B. & C. Co., 272 N. Y. 149, 154.

It may, therefore, be stated with confidence that this rule

is well established as a general proposition of law with

respect to notice.

Judge Hand in his opinion in the Circuit Court of i

peals (see p.§) said:

b tr

a te

Coe: 2

4

:

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:

§

3

eae areata Oud Wt Lae

26

‘‘The following sentence provides how the notice is

to be served but contains no language making the right

of action dependent upon the mode of service.”’

This language cannot be sustained on any logical rule of

reasoning. The statute makes the right dependent upon

written notice. The portion of the statute referred to by

Judge Hand defines as definitely and positively as it is pos-

sible for language to express it that service by mail shall

be by registered mail, thereby simply defining how the

notice shall be served. Except for that provision the gen-

eral rule would apply and the service would necessarily

have to be personal. Where a specific substitute for per-

sonal service is authorized no other substitute can be made

available.

Point ITI

The authorities cited by the Circuit Court of Appeals (R.

69-70) and the District Court (R. 38 and 39) to sustain the

so-called liberal construction of the Heard Law are not

applicable to any of the conditions mentioned in the preced-

ing Point II hereof.

The courts have never taken jurisdiction by means of any

liberal construction of the statute. After the action has been

commenced strictly in accordance with the statute, liberal-

ity of construction as to subsequent procedural matters may

be invoked but not otherwise.

In the ease of U.S. for use of Bryant v. N. Y. Steamfitting

Co., etc., 235 U. S. 327, 337, 59 L. Ed. 253, the court said:

‘“‘The act of Congress is undoubtedly ambiguous.

Indeed, considering the letter only of the three provi-

sions with which we are concerned, they absolutely

repel accommodation. We must try, however, to give

coherence to them and accomplish the intention of

Congress.”’

27

The opinion then continues to point out ambiguities and

uncertainties, cites the McCord case (supra) and does not

in any manner tend to attempt to overrule it.

In Fleischmann vy. U. S., 270 U. S. 349, 360, 70 L. Ed. 624,

631, the court again passed upon inconsistencies and am-

biguities saying:

‘‘In resolving the ambiguities in its provisions the

court must endeavor to give coherence to them in order

to accomplish the intention of Congress, and adapt

them to fulfill its whole purpose.’’

Both of the foregoing cases, therefore, deal with the con-

struction of an ambiguous provision of the statute and

nothing more. There is nothing in the Miller Act which is

ambiguous.

In Illinois Surety Co. v. John Davis Co., 244 U. S. 376,

380, 61 L. Ed. 1206, 1211, the court said:

‘‘In every case which has come before this court,

where labor and materials were actually furnished for

and used in part performance of the work contemplated

in the bond, recovery was allowed, if the suit was

brought within the period prescribed by the act. Tech-

nical rules otherwise protecting sureties from liability

have never been applied in proceedings under this

statute.”’

The italics are ours. We submit that states the true rule

of law.

In Vermont Marble Company v. National Surety Com-

pany, 213 Fed. Rep. 429, cited in the Bryant case (supra),

it is stated at page 433 of the opinion:

‘‘Unquestionably, the limitation incorporated in the

right to sue as conferred by the Ac:, upon those fur-

nishing labor and material to the contractor, that such

suit or intervention must be instituted within one year

from the completion of the contract, and the provision

ae

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SPEED ANTI, WNIT he oP

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on ae

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28

that only one suit can be brought, in which other credi-

tors may intervene are limitations upon the right of

action as conferred by the statute and are jurisdic-

tional, They are obviously intended for the benefit of

such sureties on the bond as are the defendants in the

present case; while the last provision of the statute,

requiring notice to known creditors, and publication of

notice for three months and three weeks prior to the

expiration of the year within which such suits are

authorized to be brought, was just as obviously for the

benefit of the creditor alone.’’

Again the italics are ours. The decision from the State

of Kansas cited by the Circuit Court of Appeals at page 71

of the opinion was in accord with the foregoing and not in

conflict therewith as stated.

In the Bredlove v. Gerxeral Baking Company, 138 Kas.

143, the rule is declared without any argument as to in-

formality in the mailing.

In Weaver v. Shankland Walnut Company, 131 Kas. 773,

the service of the notice was irregular but it was accepted

and acted upon, and it was only after such acceptance and

action that the question was raised. Logically it was held

to be a waiver.

In Eckel v. Sinclair Refining Co., 133 Kas. 285, and in

Horn v. Elliott, 132 Kas, 454, no question was raised, nor

was there any discussion about the sufficiency of the notice.

See also the following cases sustaining our contention:

Smith Iron Works v. Maryland Casualty Company, 275

Mass. 74;

New Britain Lumber Co. v. American Surety Company,

113 Conn. 1;

Texas Co. v. Schriewer, 38 S. W. (2d) 141;

Southern Surety Co. v. Jenner, 212 Ia. 1027;

Constance v. Leigh, 122 Oh. St. 468;

29

Republic National Bank & Trust Co. v. Massachusetts

Bonding & Ins. Ce., 68 F: (2d) 445;

Empire State Surety Co. v. City of Des Moines, 152 Ia.

531; >

Silver v. F. & B. Co., 53 Pac. (2d) 459, 40 New Mexico

_ 33.

For the reasons abeve mentioned, as well as those ex-

pressed in the foregoing petition, it is respectfully urged

that the prayer of the petition should be grant. 1 and that

the decision of the Circuit Court of Appeals for the Seeond

Cirenit, referred to, should be reversed by this Court under

writ of certiorari.

Frank Grspons,

Counsel for Petitioner,

618-630 Walbridge Bldg.,

43 Court St.,

Buffalo, N. Y.

(6144)

MO ALENT OGD

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