B. F. Sturtevant Co. v. Fidelity & Deposit Co. of Maryland

285 F. 367, 1922 U.S. App. LEXIS 1973

Opinion

MAYER, Circuit Judge

(after stating the facts as above). It is conceded that the decision below was in accord with the decisions of the New York courts. A case precisely in point is Eastern Steel Co. v. Globe Indemnity Co., decided by the New York Supreme Court per Mr. Justice Greenbaum, and unanimously affirmed in 186 App. Div. 892, 172 N. Y. Supp. 888, and then in 227 N. Y. 586, 125 N. E. 917.

It is urged, however, that a bond such as this contains a dual contract — i. e., (1) an agreement to pay the city; and (2) an agreement to pay all those who supplied labor and material — and to support this contention reference is made to R. Connor Co. v. Ætna Indemnity Co., 136 Wis. 13, 115 N. W. 811;. Baker v. Bryan, 64 Iowa, 561, 21 N. W. 83, and Dillon on Municipal Corporations (Ed. 5) § 830. It is unnecessary to set forth an analysis of the facts in the cases just cited supra, or the cases noted by Judge Dillon, because we think that the view of the New York courts is correct and that the reasons concisely stated in the opinion of Mr. Justice Greenbaum (quoted in the margin)¹ are sound. ' We regard the case as one involving solely the meaning of the language of the bond.

Although the question is one of general law (Swift v. Tyson, 16 Pet. 1, 10 L. Ed. 865) yet, under well-settled principles, tins courf: should, if possible, he in harmony with the New York courts in respect of a question of this character. See 11 Cyc. 901.

Judgment affirmed.

1 “The defendants in express terms obligated themselves by tbeir bond to tbe city of New York to tbe extent of $170,000. By their bond the defendants in effect guaranteed the city that tbe Wills & Marvin Company, to which tbe city of New York bad awarded a contract for the erection of certain buildings in connection with the Brooklyn Institute of Arts and Sciences, would ‘well and truly and in good, sufficient, and workmanlike manner perform tbe work mentioned in tbe aforesaid contract, in accordance with the terms and provisions therein stipulated, and shall promptly make payment of tbe sums due to all persons supplying labor and materials in tbe prosecution of the work provided in the said contract.’ Tbe plaintiff, a foreign corporation, did certain work and furnished certain materials in the erection of tbe buildings in question as a subcontractor of the Wills & Marvin Company. It now brings an action against tbe defendants to recover a balance due to it under its subcontract, basing its right of recovery upon tbe bond above mentioned. It seems to me unnecessary to consider tbe interesting arguments urged in behalf of tbe plaintiff which seek to differentiate tbe facts alleged in this action from those appearing in eases upon which tbe defendants rely, for tbe reason that at the threshold of this action tbe plaintiff is confronted with what to me seems to be an insuperable objection in that tbe bond runs to tbe City of New York and carries with it the presumption that the bond was executed solely for its benefit and not for that of subcontractors. To bold that tbe instrument in question was intended to operate as a guaranty to tbe subcontractors would be to read into it something to which the parties thereto had not agreed. Plaintiff claims that it relied upon tbe City’s public advertisement for proposals for bids, which referred among other things to the guaranty above described. It is obvious, however, that the advertisement necessarily was intended only for tbe use and benefit of those who might submit bids for tbe contract with tbe City to the end that they might be apprised of tbe conditions under which the contract would be awarded and was not designed to induce subcontractors to believe that they would be guaranteed in tie payment of tbeir subcontracts. Tbe defendant’s motion for judgment upon pleadings must be granted.”