Casablanca v. Superior Court of Puerto Rico

100 P.R. 201
CourtSupreme Court of Puerto Rico
DecidedNovember 3, 1971
DocketNo. O-70-96
StatusPublished

This text of 100 P.R. 201 (Casablanca v. Superior Court of Puerto Rico) is published on Counsel Stack Legal Research, covering Supreme Court of Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Casablanca v. Superior Court of Puerto Rico, 100 P.R. 201 (prsupreme 1971).

Opinion

Mr. Justice Martín

delivered the opinion of the Court.

The United States Nuclear Energy Commission entered into a contract with Southern Construction Co., Inc., for the construction of the nuclear center in Mayagüez. The Southern Construction Co., a construction company, and the Continental Casualty Co., surety company, as principal and surety respectively, furnished a bond to secure the payment of the materials and labor which would be used in the execution of said project. The bond was furnished pursuant to the requirements of the federal statute known as the Miller Act, 49 Stat. 793, of August 24, 1935 (40 U.S.C. § 270(a) et seq.). In the execution of the said contract, Southern Construction Company entered into a subcontract with Jacinto Casablanca, petitioner herein, for part of the works.

On April 5, 1960, Jacinto Casablanca brought an action in the Superior Court of San Juan claiming from Southern Construction Company the payment of certain amounts owéd to him under said subcontract and an amount for damages allegedly caused by said defendant in failing to perform certain conditions of the subcontract. On July 5, 1960, defendant answered the complaint.- By the end of that same year, plaintiff’s attorneys started to investigate as to whether the Southern Construction had furnished any bond for • the project. To that effect they requested from the Commissioner of Insurance of Puerto Rico a copy of the bond furnished by Continental Casualty for said project. The Commissioner informed them that the agents of said surety company alleged that they had not furnished any bond whatsoever in relation with said project. Later on, in 1963, the Continental [204]*204Casualty’s attorneys informed plaintiff that the main office of the company had no proof showing that any policy whatsoever had been issued in favor of the Southern Construction.

At this point on November 1, 1966, the hearing of the case on its merits was held, to which hearing only plaintiff appeared and presented his evidence. On January 27, 1967, the court entered judgment ordering Southern Construction Co. to pay to plaintiff $57,099.89 for damages, $12,053.25 for unpaid obligations, and legal interest on said last sum as of January 27, 1960, plus $500 for attorney’s fees.

On August 16, 1968, the United States Atomic Energy Commission sent to plaintiff’s new attorneys copy of the payment bond issued by the Continental Casualty Company on June 27, 1958, which covered the construction contract involved in this case.

On September 20, 1968, twenty months after judgment was rendered against the Southern Construction Co., plaintiff, seeking the execution of said judgment against the surety company, filed a petition before the trial court, which he entitled “Proceeding Against Solidary Debtor,” requesting that order be entered summoning the Continental Casualty to show cause why it should not be bound by said judgment. The Continental Casualty having been summoned, the hearing of the case was held on October 18, 1968. On March 31, 1970, the trial court finally decided that since the bond was furnished under a contract with the Government of the United States, the same was subject to the statute known as the Miller Act, which provides that every suit or claim under such contracts shall be brought in the United States District Court for the district in which the contract was to be performed and executed. The trial court concluded that the jurisdiction of the federal courts is exclusive for such claims and, consequently, declared itself without jurisdiction as to the surety company, Continental Casualty. Petitioner appeals from said decision before us.

[205]*205In his brief petitioner mainly raises two questions, to wit: (1) that the Miller Act is not applicable to his claim, and, consequently, it is not of the exclusive jurisdiction of the federal forum; and (2) that if it were applicable, the actions of the Continental Casualty itself preclude the latter from relying on the provisions of the federal statute.

The Miller Act, 40 U.S.C. § 270 (a) et seq., is a statute of general character which requires the furnishing of bonds for any contract for the construction, repair, or alteration of any federal building or public work.1 Tropicair Mfg. Corp. v. The Coite Somers Co., 96 P.R.R. 140 (1968); Byrne and Costello, The Evolution of Coverage under the Miller Act, 28 Fordham L. Rev. 287 (1959); Stickells, Bonds of Contractors on Federal Public Works — The Miller Act, 36 B.U.L. Rev. 499 (1956). Said act requires that the contractor of a federal work furnish two kinds of bonds. One in favor of the Government of the United States, to secure the termination of the work according to the agreement (Performance Bond), and another in favor of the government also, but whose purpose is the protection of all the persons supplying labor and materials in the execution of the contract (Payment Bond).

The bond in the case at bar was furnished pursuant to the provisions of § 270(a) of the Miller Act. The form of the bond document used in this case was provided by the federal agency General Services Administration and the same expresses its purpose to protect the persons supplying labor and materials, pursuant to the provisions of the Miller Act. The penalty clause of the bond, as required by said federal Act, binds the principal and its surety in favor of the United [206]*206States only. United States v. Carter, 353 U.S. 210, 77 S.Ct. 793 (1957); United States v. Peerless Casualty Company, 255 F.2d 137 (8th Cir. 1958); United States v. Ft. George G. Meade, Etc., 186 F.Supp. 639 (1960). And, undoubtedly, the bond in this case covers a federal public work. See, United States v. Irwin, 316 U.S. 23 (1942), 62 S.Ct. 899; Fidelity & Deposit Company of Maryland v. Harris, 360 F.2d 402.

Petitioner actually argues.that even in a case of a bond issued under the Miller Act, the courts of Puerto Rico have jurisdiction to entertain claims for bonds furnished under said Act. We do not agree.

Section 270(b)-. of the Miller Act expressly provides that every suit instituted under the same shall be-brought in the name of the United States for the use of the person, suing “in the United States District Court for any district in which the contract was to be performed and executed and not elsewhere, irrespective of the amount in controversy.” This provision has been unanimously construed in the sense that the federal court has exclusive jurisdiction on the matter and the state courts cannot entertain such cases. Blanchard v. Terry & Wright, Inc., 331 F.2d 467, cert. denied, 85 S.Ct. 62; United States v. Aetna Casualty & Surety Company, 297 F.2d 665 (1962); Gifford-Wood Co. v. Travelers Indemnity Co., 249 N.Y.S.2d

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100 P.R. 201, Counsel Stack Legal Research, https://law.counselstack.com/opinion/casablanca-v-superior-court-of-puerto-rico-prsupreme-1971.