United States ex rel. Sherman v. Carter Constr. Co.

PETITIONER: United States ex rel. Sherman
RESPONDENT: Carter Constr. Co.
LOCATION: Railroad Crossing

DOCKET NO.: 48
DECIDED BY: Warren Court (1957-1958)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 353 US 210 (1957)
ARGUED: Dec 05, 1956
DECIDED: Apr 29, 1957

Facts of the case

Question

Media for United States ex rel. Sherman v. Carter Constr. Co.

Audio Transcription for Oral Argument - December 05, 1956 in United States ex rel. Sherman v. Carter Constr. Co.

Earl Warren:

Number 48, United States of America for the Benefit and on Behalf of Harry Sherman, et al., Petitioners, versus Donald G.Carter.

Mr. Stanton.

Thomas E. Stanton, Jr.:

If the Court please.

This case presents the question as to whether the trustees of a collectively bargained multi-employer health and welfare trust funds have the right to collect under a Miller Act payment bond, contributions which a federal public works contractor agreed in a collective-bargaining agreement to make into the fund.

It comes to this Court by certiorari after a summary judgment was entered in the District Court against the trustees and in favor of the surety and after that judgment was affirmed by the Court of Appeals.

Each of the courts below held that petitioners do not have the right to recover because it would be necessary in order to give that right to use the words of the District Court to stretch the terms of the statute far beyond the limits of its objectives and purposes.

I think then to present this matter to the Court, I should start with the language of the statute, the pertinent portion of it, which is set forth in the appendix to our opening brief.

By that statute which is entitled an act for the protection of persons furnishing material and labor, for the construction, alteration or repair of said public buildings or public work, Section 1 (a) (2) provides that the contractor for public work having a value of $2000 or more shall provide 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 the said contract for the use of each such person.

Section 2 (a) of the Act provides in pertinent part, "Every person who has furnished labor or material in the prosecution of the work provided for in such contract in respect to which a payment bond is furnished under this Act and who has not been paid in full therefore, before the expiration of a period of 90 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."

The courts below have emphasized certain of the literal language of that statute.

We wish to present to the Court the contentions that in order to meet the literal words of the statute, it is necessary to hold that we as trustees for the laborers are entitled to recover.

I emphasize the language that the bond is for the protection of those who have furnished labor.

As I will develop in my argument, contributions for which we sue are a part of the consideration agreed to be paid for the labor of the laborers who are entitled to the benefit of this fund.

And that in order to give them the protection that they are entitled under the statute, it is necessary to hold that these contributions are within the coverage of the payment bond.

I point further to the language of the second section which says, "Gives the right of action to anyone who has furnished labor and who has not been paid in full therefore."

And I emphasize to the Court that because of the nature of these contributions, as a part of the consideration for the labor being performed by the laborers on these public projects, the laborer has not been paid in full, unless the Court recognizes that the trustees or the laborer, who are the petitioners in this action, are entitled to the protection of the bond and the security of the bond for the payment of the portion of the laborer's consideration which has agreed -- in which the contractor agreed to pay into the fund.

Now, in pointing out to the Court --

Stanley Reed:

Now, are you going --

Thomas E. Stanton, Jr.:

Yes.

Stanley Reed:

-- are you going to tell us just who brought this suit?

Thomas E. Stanton, Jr.:

Yes, I am, Your Honor.

The suit is brought --

Stanley Reed:

As a part -- part of the contract, a part of your statement in regard to the contract.

Thomas E. Stanton, Jr.:

I'm sorry, sir.

Stanley Reed:

As a part of your statement in regard to the contract, how they got the right to bring the suits.

Thomas E. Stanton, Jr.:

Yes, I will turn to that immediately, Your Honor.

Stanley Reed:

No, no, don't let me interrupt you (Voice Overlap) --

Thomas E. Stanton, Jr.:

Well, that -- in -- in the logical course of my argument just this day, I'll reach that.

This trust agreement which is Exhibit C to the statement of facts on which -- which appears at page 21 of the record is a pamphlet.

It's entitled a trust agreement for the laborers' health and welfare trust fund for Northern California.