Joseph F. Hughes & Co. v. District of Columbia ex rel. Noland Co.
Joseph F. Hughes & Co. v. District of Columbia ex rel. Noland Co.
Opinion of the Court
On August 10, 1964, appellant Joseph F. Hughes & Co., Inc., referred to as Hughes, entered into separate contracts with the District of Columbia for the construction of the Daniel C. Roper Junior High School and the Louis Charles Rabaut Junior High School. Hughes and appellant Reliance Insurance Company, as surety, referred to as Reliance, delivered to the District of Columbia statutory performance and payment bonds in the amounts of the contract prices. The bonds were to secure payment for labor and materials furnished to Hughes. Ap-pellees Flowers School Equipment Co. and Reading Steel Products, Inc., referred to respectively as Flowers and Reading, furnished materials and labor to Hughes. Neither has been paid in full.
Under 1 D.C.Code § 804 (1967) set forth in pertinent part in the margin,
Under Section 804, note 1, swpra, in addition to such personal notice as “the court may order,” notice by publication is required, “for at least three successive weeks, the last publication to be at least three months before the time limited therefor.” The last of the three published notices in the Roper suit appeared December 4, 1967, and in the Rabaut suit December 5, 1967.
Flowers and Reading accordingly did not receive before the year elapsed a notice which met the terms of the statutory language. It is in this light that we consider the contention of appellants that Section 804 precludes these creditors from filing their claims later than one year from the date of final settlement, though filed within the time contemplated by the notice provision.
Materialmen were to have the assistance of published notice in ascertaining whether a suit had been filed in which they could intervene.
The court must seek a reasonable reconciliation of the two provisions consistent with the over-all congressional policy represented by the legislation.
We find no ease defeating a claim filed within the time allowed by a published notice but later than a year from the date of final settlement.
There are decisions, however, which characterize the notice provisions as directory only and which subordinate those provisions to the one year limitation. In these cases, however, the most important of which is New York Steam Fitting Co., supra, it was the surety which sought unsuccessfully to attach overriding importance to the notice requirement — a requirement which the Court pointed out was not for its benefit but for that of creditors. More precisely the surety contended that the time for bringing suit was cut down from a year by at least three months and three weeks so as to permit the published notice to fall entirely within the year. The Court rejected this contention, referring to Vermont Marble Co. v. National Surety Co., 213 F. 429 (3rd Cir.). There it had been held that the notice requirement was directory only, a view the Supreme Court approved when, as in Vermont Marble, the surety sought refuge in a provision intended to benefit creditors. The fact is that in Vermont Marble the creditors’ claims were filed within the year period. The court simply rejected the surety’s contention that the absence of notice to creditors defeated recovery by them.
United States ex rel. for Use and Benefit of Texas Portland Cement Co. v. McCord, 233 U.S. 157, 162, 34 S.Ct. 550, 58 L.Ed. 893 is cited by appellant for the proposition that a statute like this creates a new liability and gives a special remedy, from which it is said to follow that the statutory limitations become a part of the right conferred and if not complied with defeat liability. But the case did not involve the internal conflict within the statute which characterizes these appeals. It was concerned only with the necessity of compliance with the time limitation upon the filing of the first complaint of a creditor.
Notwithstanding opinions leaning to the contrary in cases distinguishable insofar as the actual holdings are concerned, we think the creditors’ claims before us were properly allowed, though filed later than a year from the date of final settlement.
We do not reach the question whether in some circumstances the one year provision takes on a jurisdictional status.
The statute does not provide that the giving of notice is a condition of the limitation to one suit.
8 F.Supp. at 623.
The partial reconciliation of the conflicting provisions which we adopt in these cases is fortified to a degree by the legislative renovation of Section 804 set forth now in 1 D.C.Code § 804b, note 1, supra. Under these new provisions each creditor’s rights are independent of those of other creditors. Each is able to control his own limitation period by filing his own suit within one year from the time he furnishes the last of his labor or materials to the prime contractor. This cures for the future the problems arising from Section 804. Under that section a claimant’s limitation period seemingly is controlled by third parties, the prime contractor and the District. The steps they take are beyond a claimant’s control and may be beyond his knowledge, such as the date of completion and final settlement. In the present cases this date is not entirely free of uncertainty.
Thus, Flowers represented to the District Court that appellants’—
* * * Motion to Dismiss is based upon the defendants’ [appellants’] position that final settlement of the prime contract took place on December 15, 1966, whereas by letter dated April 12, 1967 defendant Hughes advised this intervenor [Flowers] that final settlement had not taken place and might be delayed for as much as ninety (90) days. * * *
and Reading represented that—
* * * [it] is a Pennsylvania corporation and is unfamiliar with the local procedures involved in protecting its rights under the bond. * * * Further it is shown * * * that this claimant did inquire of counsel for the defendants [appellants] concerning its unpaid balance by letter dated June 7, 1967, which letter was never answered, and that it later inquired directly of defendant Reliance by letter dated December 26, 1967, which letter Reliance did not answer for thirty (30) days or eighteen (18) days after the one-year limitation had expired. * * *
We do not imply that appellants actively misled Flowers and Reading. We note these circumstances so as to indicate that the ascertaining by subcontractors of the date of final settlement can be difficult. Neither Flowers nor Reading received personal notice of the suits in which they had to intervene; and the three months following the only notices given extended beyond the one year period.
The notice provisions are for the benefit of creditors; and no sufficient reason leads us to rule other than that these claims could be considered on the merits, filed as they were within the time allowed by the notices actually given, each of which had begun its course well before the expiration of the one year period.
Affirmed.
. * * * where a suit is instituted by a creditor or by creditors, only one action shall be brought, and any creditor may file his claim in such action and be made party thereto within one year from the completion of the work under said contract, and not later. * * * And provided further, That in all suits instituted under the provisions of this section such personal notice of the pendency of such suits, informing them of their right to intervene as the court may order, shall be given to all known creditors, and in addition thereto notice of publication in some newspaper of general circulation, published in the District of Columbia, for at least three successive weeks, the last publication to be at least three months before the time limited therefor.
1 D.C.Code § 804 (1967).
It should be noted that all public construction contracts awarded by the District of Columbia pursuant to invitations for bids issued after October 3, 1938, are now governed by new legislation, 1 D.C. Code §§ 804a, 804b, 804c (Supp. II 1969), repealing and replacing Section 804. Pub.D.No.90-455, 90th Cong., 1st Sess. § 8 (Aug. 3, 1968), 82 Stat. 628. In the present cases, however, Section 804 applies.
. For purposes of this opinion we accept appellants’ position that the one year
. These notices by publication were pursuant to court order of November 9, 1967, requested by Noland. The court had denied Hughes’ request of July 25, 1967, for notice by publication. This seems to us to have been unfortunate and perhaps erroneous, but we do not think Flowers and Reading should be disadvantaged because of it.
. Ten days remained of the one year limitation in the ease on the Roper contract and 38 days in the case on the Rabaut contract.
. Compare United States to Use of Pitts-burg Planing Mill Co. v. Scheurman, 218 F. 915, 918 (D.C.Ida.).
. It is a diminishing problem, since Section 804 now has been superseded by legislation under which it will not arise.
Bee note 1, supra.
. Mandel v. United States, 4 F.2d 629 (3d Cir.); United States for Use of Pen Mar Co. v. J. L. Robinson Constr. Co., 8 F.Supp. 620 (D.Md.).
. Moreover, in New York Steam Fitting Co. personal notice was given to creditors.
. See note 2, supra.
. See, e.g., United States ex rel. for Use and Benefit of Texas Portland Cement Co. v. McCord, 233 U.S. at 162-163, 34 S.Ct. 550, 58 L.Ed. 893.
. See, e.g., Fleischmann Construction Co. v. United States, 270 U.S. 349, 358, 46 S.Ct. 284, 70 L.Ed. 624, et seq.; United States Casualty Co. v. District of Columbia, 71 App.D.C. 92, 107 F.2d 652.
Reference
- Full Case Name
- JOSEPH F. HUGHES & CO., Inc., and Reliance Insurance Company v. DISTRICT OF COLUMBIA for the Use and Benefit of NOLAND COMPANY, Inc., and Flowers School Equipment Co., Appellees DISTRICT OF COLUMBIA for the Use and Benefit of NOLAND COMPANY, Inc., and Reading Steel Products, Inc. v. JOSEPH F. HUGHES & CO., Inc., and Reliance Insurance Company
- Cited By
- 1 case
- Status
- Published