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  • United States Ex Rel. Noland Co. v. Irwin, 316 U.S. 23 (1942)

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    The Supreme Court reviewed whether the construction of a library building at Howard University, a private institution, qualified as a "public work" under the Miller Act such that a contractor was required to post a payment bond to protect suppliers of labor and materials. The Court examined the definitions of "public works" in the National Industrial Recovery Act and legislative intent behind the Miller Act, and determined that the library project, which had been authorized and funded by Congress to serve the public interest, qualified as a public work. Therefore, the petitioner supplier was entitled to bring an action against the contractor's bond to recover unpaid costs for materials supplied to the project.

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    Filed: 1942-05-04 Precedential Status: Precedential Citations: 316 U.S. 23 Docket: 658

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    The Supreme Court reviewed whether the construction of a library building at Howard University, a private institution, qualified as a "public work" under the Miller Act such that a contractor was required to post a payment bond to protect suppliers of labor and materials. The Court examined the definitions of "public works" in the National Industrial Recovery Act and legislative intent behind the Miller Act, and determined that the library project, which had been authorized and funded by Congress to serve the public interest, qualified as a public work. Therefore, the petitioner supplier was entitled to bring an action against the contractor's bond to recover unpaid costs for materials supplied to the project.

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    14 views7 pages

    United States Ex Rel. Noland Co. v. Irwin, 316 U.S. 23 (1942)

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    The Supreme Court reviewed whether the construction of a library building at Howard University, a private institution, qualified as a "public work" under the Miller Act such that a contractor was required to post a payment bond to protect suppliers of labor and materials. The Court examined the definitions of "public works" in the National Industrial Recovery Act and legislative intent behind the Miller Act, and determined that the library project, which had been authorized and funded by Congress to serve the public interest, qualified as a public work. Therefore, the petitioner supplier was entitled to bring an action against the contractor's bond to recover unpaid costs for materials supplied to the project.

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    of 7

    316 U.S.

    23
    62 S.Ct. 899
    86 L.Ed. 1241

    UNITED STATES, to Use of NOLAND CO., Inc.,


    v.
    IRWIN et al.
    No. 658.
    Argued March 11, 1942.
    Decided April 6, 1942.
    Rehearing Denied May 4, 1942.

    See 316 U.S. 709, 62 S.Ct. 1103, 86 L.Ed. -.


    Messrs. Alexander M. Heron and Bynum E. Hinton, both of Washington,
    D.C., for petitioner.
    Mr. Prentice E. Edrington, of Washington, D.C., for respondents.
    Mr. Justice BYRNES delivered the opinion of the Court.

    By Act of February 14, 1931,1 making appropriations for the Department of the
    Interior, Congress authorized the construction of a library building at Howard
    University in the District of Columbia. The cost was not to exceed $800,000, of
    which sum $400,000 was made immediately available. Only a small part of this
    money had been used for architects' fees when the President, shortly after his
    inauguration in 1933, ordered impounded these and all other funds appropriated
    for construction.

    Title II of the National Industrial Recovery Act of June 16, 1933,2 created a
    Federal Emergency Administration of Public Works, with all of its powers
    vested in an Administrator. By 202 the Administrator was directed to 'prepare
    a comprehensive program of public works, which shall include among other
    things the following: * * * (c) any projects of the character heretofore
    constructed or carried on either directly by public authority or with public aid to
    serve the interests of the general public; * * *.' And 203 provided that 'with a
    view to increasing employment quickly * * * the President is authorized and

    empowered, through Administrator or through such other agencies as he may


    designate or create, (1) to construct, finance, or aid in the construction or
    financing of any public-works project included in the program prepared
    pursuant to 202; * * *.'
    3

    On August 24, 1935, Congress passed the Miller Act. 3 By the terms of this
    statute, 'before any contract, exceeding $2,000 in amount, for the construction,
    alteration, or repair of any public building or public work of the United States is
    awarded to any person, such person shall furnish to the United States * * * a
    payment bond with a surety or sureties satisfactory to such officer for the
    protection of all persons supplying labor and material in the prosecution of the
    work provided for in said contract for the use of each such person.' The Act
    also permitted persons who supplied materials and labor to bring suit on the
    bond in the name of the United States.

    These are the statutes applicable to this dispute.

    After the passage of the National Industrial Recovery Act, the Secretary of the
    Interior (who had been named Administrator pursuant to Title II) approved the
    library building at Howard University as a part of the public works program
    and allotted $1,120,811.58 for its construction. On December 5, 1936 the
    Assistant Secretary of the Interior, on behalf of the United States, entered into a
    contract with respondent, Irwin & Leighton, for the construction of the library
    building. As a condition of the contract, Irwin & Leighton was required to
    furnish a bond to secure the laborers and material men, under provisions of the
    Miller Act.4 Accordingly, it posted such a bond in the amount of $408,618,
    with respondent United States Guarantee Company as surety.

    Petitioner furnished to a sub-contractor materials worth $23,649.35. Of this


    sum it was paid $11,146.80, leaving due $12,502.55 with interest. When
    payment of this amount was refused, petitioner brought this suit on the bond in
    the name of the United States. Respondents moved to dismiss the complaint on
    the ground that the construction of the library building at Howard University
    was not a 'public work', within the meaning of the Miller Act. The District
    Court overruled the motion to dismiss. The Court of Appeals allowed a special
    appeal and reversed, on the authority of its own earlier decision in Maiatico
    Construction Co. v. United States, 65 App.D.C. 62, 79 F.2d 418. The case is
    here on certiorari.

    The question before us therefore is whether the construction of the library was
    a 'public work' as that term is used in the Miller Act. We think that it is, that the

    Assistant Secretary of the Interior was consequently authorized to require


    respondents to post a bond securing materialmen, and that petitioner is entitled
    to sue on the bond in the name of the United States.
    8

    No aid in ascertaining the meaning of 'public works' is to be found in the Miller


    Act itself. But in the National Industrial Recovery Act, passed two years before
    the Miller Act, Congress defined it as including 'any projects of the character
    heretofore constructed or carried on either directly by public authority or with
    public aid to serve the interests of the general public.' The library at Howard
    University was not only a project 'of the character heretofore constructed or
    carried on * * * with public aid'; it had been directly and specifically authorized
    by Congress in 1931 and money had actually been appropriated for it. And it
    requires no discussion that Howard University, established by the authority of
    Congress 'for the education of youth in the liberal arts and sciences,'5 serves 'the
    interests of the general public.'

    In Maiatico Construction Co. v. United States, supra, upon which the Court of
    Appeals principally relied in reaching an opposite conclusion, the same court
    had construed a different statute, the Heard Act of August 13, 1894.6 That Act
    required that 'any person or persons entering into a formal contract with the
    United States for the construction of any public building, or the prosecution and
    completion of any public work, or for repairs upon any public building or
    public work, shall be required' to post a bond for the security of both the United
    States and the suppliers of labor and materials. It permitted the laborers and
    material men to enforce their claims by intervening in any suit by the United
    States on the bond. The plaintiffs in the Maiatico case supplied labor and
    materials in the construction of three dormitory buildings at Howard
    University, the contract for which had been let to the defendant construction
    company by the United States in November, 1930. The Court of Appeals
    decided that the plaintiffs could not recover on the defendant's bond because
    the dormitories were not 'public buildings' and their construction was not a
    'public work.' It based this conclusion on the theory that 'public buildings' or
    'public works', within the meaning of the Heard Act, included only buildings
    which belonged to the United States. Since Howard University is a private
    institution and since it held title to the dormitories, recovery on the bond was
    denied to the suppliers of materials and labor.7

    10

    Whatever may have been the validity of this narrow formula when applied to
    the Heard Act, we cannot approve its application to this suit under the Miller
    Act. In the first place, the whole concept of 'public works' has been
    considerably altered since the enactment of the Heard Act in 1894 and
    particularly within the last dozen years, and the question of title to the buildings

    or improvements or to the land on which they are situated is no longer of


    primary significance.8 But we are not left to such vague guidance. Two and a
    half years after the execution of the contract involved in the Maiatico case,
    Congress, in the National Industrial Recovery Act, specifically defined 'public
    works' as including 'any projects of the character heretofore cnstructed or
    carried on either directly by public authority or with public aid to serve the
    interests of the general public.' The Miller Act was passed two years later for
    the purpose of enlarging the protection which the Heard Act had afforded to
    laborers and materialmen by facilitating the procedure for enforcing their
    claims against the contractor. During the hearings on the several bills from
    which the Miller Act evolved, Congressman Duffy, ofOhio, the author of one
    of the bills and a member of the sub-committee that drafted the Act, declared
    without dissent by any Representative: 'If this bill were passed by this Congress
    it would certainly be applicable to the public works program and that is the
    reason for its importance.'9
    11

    We have no doubt that the Miller Act was intended to apply to the 'public
    works' authorized by the Administrator under the National Industrial Recovery
    Act. The National Industrial Recovery Act did not leave to speculation the
    nature of the 'public works' that Congress envisaged. Its language was not
    technical but plain and specific. Expressly included were 'projects of the
    character heretofore constructed or carried on * * * with public aid to serve the
    interests of the general public.' Beyond question the library at Howard
    University was such a project.

    12

    The respondents evidently had no difficulty interpreting the language of the


    Recovery Act or the Miller Act until they were called upon to meet the claims
    of petitioner. The record does not reveal that Irwin & Leighton objected to
    posting the bond when the contract was executed. It paid a premium of
    $8,172.25 for the bond and the surety company accepted it without question.
    Presumably, these are the circumstances which caused the Court of Appeals,
    122 F.2d 73, 78, to remark upon 'the strong equities' of petitioner's case.

    13

    We hold that the Administrator had the authority to require the bond and that
    petitioner was entitled to bring this action on it. Holding this view, we find it
    unnecessary to consider the other questions raised by petitioner.

    14

    Reversed.

    46 Stat. 1115, 1160.

    2
    3

    48 Stat. 195, 201.


    49 Stat. 793, U.S.C., Title 40, 270a270d, 40 U.S.C.A. 270a270d:
    'Sec. 1 ( 270a). (a) Before any contract, exceeding $2,000 in amount, for the
    construction, alteration, or repair of any public building or public work of the
    United States is awarded to any person, such person shall furnish to the United
    States the following bonds, which shall become
    binding upon the award of the contract to such person, who is hereinafter
    designated as 'contractor':
    '(1) A performance bond with a surety or sureties satisfactory to the officer
    awarding such contract, and in such amount as he shall deem adequate, for the
    protection of the United States.
    '(2) A payment bond with a surety or sureties satisfactory to such officer for the
    protection of all persons supplying labor and material in the prosecution of the
    work provided for in said contract for the use of each such person. Whenever
    the total amount payable by the terms of the contract shall be not more than
    $1,000,000 the said payment bond shall be in a sum of one-half the total
    amount payable by the terms of the contract. Whenever the total amount
    payable by the terms of the contract shall be more than $1,000,000 and not
    more than $5,000,000, the said payment bond shall be in a sum of 40 per
    centum of the total amount payable by the terms of the contract. Whenever the
    total amount payable by the terms of the contract shall be more than $5,000,000
    the said payment bond shall be in the sum of $2,500,000.
    '(b) The contracting officer in respect of any contract is authorized to waive the
    requirement of a performance bond and payment bond for so much of the work
    under such contract as is to be performed in a foreign country if he finds that it
    is impracticable for the contractor to furnish such bonds.
    '(c) Nothing in this section shall be construed to limit the authority of any
    contracting officer to require a performance bond or other security in addition
    to those, or in cases other than the cases specified in subsection (a) of this
    section. * * *
    'Sec. 2 ( 270b). (a) Every person who has furnished labor or material in the
    prosecution of the work provided for in such contract, in respect of
    which a payment bond is furnished under this Act (section 270a of this title)
    and who has not been paid in full therefor before the expiration of a period of
    ninety days after the day on which the last of the labor was done or performed

    by him or material was furnished or supplied by him for which such claim is
    made, shall have the right to sue on such payment bond for the amount, or the
    balance thereof, unpaid at the time of institution of such suit and to prosecute
    said 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 furnishing said payment bond shall have a right of action upon the
    said payment 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 accuracy the amount claimed and the name of the party
    to whom the material was furnished or supplied or for whom the labor was
    done or performed. Such notice shall be served by mailing the same by
    registered mail, postage prepaid, in an envelop addressed to the contractor 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 which the
    public improvement is situated is authorized by law to serve summons.
    '(b) Every suit instituted under this section 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 in such suit, but no such
    suit shall be commenced after the expiration of one year after the date of final
    settlement of such contract. The United States shall not be liable for the
    payment of any costs or expenses of any such suit.
    '* * *.'ses
    4

    Bulletin No. 51 of Federal Emergency Administration of Public Works,


    'Information Relating to the Negotiation and Administration of Contracts for
    Federal Projects under Title II of the National Industrial Recovery Act'
    (Revised, Oct. 1, 1935). Part I, 2(a): 'The forms required for general use in
    connection with construction and repair projects are as follows: . . . U.S.
    Government Standard Form of Payment Bond No. 25A for the protection of
    labor and materialmen, Pursuant to Public Act. No. 321, Seventy-fourth
    Congress, approved August 24, 1935 (The Miller Act).'

    14 Stat. 438.

    28 Stat. 278, as amended by the Act of Feb. 24, 1905, 33 Stat. 811 and the Act
    of March 3, 1911, 36 Stat. 1167, 40 U.S.C.A. 270.

    This emphasis upon title to the building or project or to the land on which it is
    situated finds support, as far as the Heard Act is concerned, in Title Guaranty &

    Trust Co. v. Crane Co., 219 U.S. 24, 31 S.Ct. 140, 55 L.Ed. 72; 23
    Op.Atty.Gen. 174.
    8

    See Peterson v. United States, 6 Cir., 119 F.2d 145, at pages 147, 148.

    Hearings on H.R. 2068, H.R. 4027, H.R. 4231, H.R. 4461, H.R. 5054, H.R.
    6018, H.R. 6115, H.R. 6677, H.R. 8519 (March 8, 22, April 26, and May 3,
    1935), Committee on the Judiciary, House of Representatives, 74th Cong., 1st
    Sess., p. 71.

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