Robinson v. United States ex rel. Brown-Ketcham Iron Works

251 F. 461, 163 C.C.A. 637
CourtCourt of Appeals for the Second Circuit
DecidedMarch 18, 1918
DocketNo. 193
StatusPublished
Cited by21 cases

This text of 251 F. 461 (Robinson v. United States ex rel. Brown-Ketcham Iron Works) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Robinson v. United States ex rel. Brown-Ketcham Iron Works, 251 F. 461, 163 C.C.A. 637 (2d Cir. 1918).

Opinion

MAYER, District Judge

(after stating the facts as above). [1] 1. The first question which arises is whether the action was brought “six months from the completion and final settlement of said contract.” Defendants contend that there has never been any “complete payment for the work by the government,” as required by the typical Fisher subcontract, and that until there is such complete payment the subcontractors have no claim against Robinson for the balance held out hy him. The meaning of the phrase “final settlement” was settled in United States v. Robinson, 214 Fed. 38, 130 C. C. A. 432, We agree that in that case no point as to the meaning of the words “the com] fieri on” was raised or passed upon. In that case the statute was construed ac - cording to its purposes, and must be similarly construed here. The decisions of the Supreme Court “have made it clear that the statute and bonds given under it must be construed liberally in order to effectuate, the purpose of Congress as declared in the act.” Illinois Surety Co. v. John Davis Co., 244 U. S. 376, 37 Sup. Ct. 614, 61 L. Ed. 1206.

The limitation of time in the statute was intended for the benefit of the United States, and as soon as the rights of the United States on the bond were out of the way the subcontractors had the right to sue, assuming, of course, that their own contracts gave them rights against the main contractor. Illinois Surety Co. v. Peeler, 240 U. S. 214, 36 [466]*466Sup. Ct. 321, 60 L. Ed. 609. In other words, when it appears that the United States, through its proper officials, has indicated a determination not to sue on the bond by final settlement, and six months have elapsed, then the security becomes open to those who have trusted to the credit of the main contractor.

It appears from the letter of the supervising architect that final settlement was approved by the Secretary of the Treasury under date of February 10, 1909. It is true that a part of the contract price was reserved for the completion of certain unfinished work, but enough had been completed to satisfy the United States that a final settlement 'could be made, and such final settlement was in fact made, and if it should later appear that the United States, acting through its officials, was wrong in that regard, it was the United States and none other which took the risk that by intermediate recoveries the subcontractors might so deplete the fund that the United States would bear the loss, if any, if it erred in approving the contract as finally settled. The word “completion,” in view of the purposes of the statute, and the attitude of the courts in giving those purposes effect, must be construed as meaning that the contract was completed in the sense that the United States was satisfied that enough had been done to discharge the surety as to the United States. Any other construction would inevitably lead to the defeat of some of the essential purposes for which the statute was ena'cted. A subcontractor who had performed his work would be compelled to wait for some indefinite period because some other subcontractor^ or the main contractor himself by reason of some default or dispute, made necessary the reservation of a certain sum to malee good that default or dispose of that dispute. It can readily be seen that in a contract involving, as did the contract at bar, over a million dollars, a subcontractor could be kept out of his money because of a dispute over a comparatiyely small sum, notwithstanding the fact that the government was satisfied to the point where it no longer looked to the surety bonds. Remembering that the purpose of the statute in this regard was to protect the United States, it follows that there is no merit in the contention that the subcontractor must wait to begin his action until disputes as to completion are finally settled, notwithstanding that the government on its part is entirely satisfied and approves the final settlement of the contract.

[2] After August 10, 1909 (i. e., after six months from the date of final settlement), the subcontractors had the right to begin an action to recover on the bond, assuming that the contractors had defaulted in payment to them under the -terms of .their own contracts with him. The subcontracts must be construed, so far as possible, consistently with the main'contract, and were necessarily drawn-with reference to the main contract. The “complete payment” mentioned in the subcontracts is the final payment to be made by the United States in accordance with its final settlement, whereby is meant the final amount acknowledged by the United States to be due. As between the United States and Robinson, the latter may not be satisfied, and may contest the position of the United States, as he is now doing in the Court of Claims; but such controversy on the facts in this case, the construe[467]*467tion of the statute, the main contract, and the stil¡contracts, does not in any manner affect the rights of the subcontractors as against: Robinson.

So to hold is not to rewrite the contracts as between Robinson and tlie subcontractors, as counsel earnestly contend, but is merely to give the language of the parties the meaning which they intended it should have, for they were referring directly to the contract with the United vSlates, with its necessary security, and it is dear that the language thus used in the subcontracts could never have been intended, in effect, to require the subcontractors to waive their rights upon the bond, or to be postponed indefinitely after the United States bad so acted as to discharge all liability on the bond against it, and after the necessary six months had elapsed. We axe therefore of opinion that the action was properly and not prematurely brought. Winslow Bros. Co. v. Robinson, 173 Ill. App. 84.

[3] 2. The marble work in the Robinson contract was sublet to the lusher Company, and Robinson did not do any of that work, in the letter of final settlement, supra, the supervising architect, with the approval of the Secretary of the Treasury, made the following deductions relating wholly to the marble work done by the R. C. Fisher Company: Por omission of proteclive coverings on interior marble work, 82,500; on account of inferior marble in rotunda and main hall, $3,-000. Both of these items under the Fisher subcontracts with Robinson were to have been performed to “the full satisfaction of the supervising architect.” These items, aggregating $5,500, were allowed by the referee and by the District Judge.

Documentary* evidence showed that the supervising architect was not satisfied. Fisher & Co. introduced testimony to the effect that the work was fully and properly done. No testimony was adduced by Robinson to the contrary; his position being that, as the United States had deducted these amounts from him, he could not be called upon to pay the subcontractors the same amounts thus deducted. It also appears that in Robinson’s petition to the Court of Claims, after enumerating these two items, with others, he alleged that the deductions were without warrant, in that tlie provisions of the contract relating thereto had been fully complied with. The referee held that the action of the supervising architect was not “conclusive evidence of dissatisfaction.

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Bluebook (online)
251 F. 461, 163 C.C.A. 637, Counsel Stack Legal Research, https://law.counselstack.com/opinion/robinson-v-united-states-ex-rel-brown-ketcham-iron-works-ca2-1918.