Title Guaranty Surety Company v. United States/Opinion of the Court

This is an action upon a contractor's bond executed on May 24, 1904, under the provisions of the act of Congress of August 13, 1894, chap. 280, 28 Stat. at L. 278, U.S.C.omp. Stat. 1901, p. 2523, entitled, 'An Act for the Protection of Persons Furnishing Materials and Labor for the Construction of Public Works.' The question for decision is whether the court below had jurisdiction of the cause.

The bond was executed by the surety company in connection with a contract entered into by the Scofield Company with the United States for the erection of a dry dock at the League Island navy yard. The Harlan & Hollingsworth corporation took over a subcontract and constructed a caisson for the dock. To recover a balance owing, the corporation resorted to its remedy on the bond. The bond and various contracts were made prior to 1905.

The above-mentioned act of August 13, 1894, contains no direction respecting where suit upon the bond of a contractor shall be brought by a subcontractor, or what courts shall take jurisdiction of the right of action it creates. As the principal office of the defendant surety company was located within the district, this action was commenced in the court below, as authorized by § 5 of an act of Congress also approved August 13, 1894 (chap. 282, 28 Stat. at L. 279, U.S.C.omp. Stat. 1901, p. 2315), regulating surety companies which execute bonds required by the laws of the United States

The Scofield Company did not defend. The surety company, however, entered a plea to the jurisdiction of the court, contending that as the work done and materials and labor furnished by the Harlan & Hollingsworth corporation were done and furnished after the passage of an act approved February 24, 1905 (chap. 778, 33 Stat. at L. 811, U.S.C.omp. Stat. Supp. 1911, p. 1071), amendatory of the first-mentioned act of 1894, and making important changes in the rights of a subcontractor, the provisions of the amendatory act governed, and the action should have been commenced in the district in which the contract was to be performed and executed. A demurrer to the plea was sustained, and for want of an affidavit of defense, judgment was entered in favor of the Harlan & Hollingsworth Company, and the case was brought directly here on the question of jurisdiction.

The circuit court was clearly right in upholding its jurisdiction. As already stated, the contract between the United States and the original contractor, the bond of the surety company, and the contract with the use plaintiff, were all executed prior to the passage of the amendatory act. To hold that the latter act applied, therefore, would be to construe the act as having a retroactive effect. It has, however, been definitely decided, that the act was intended to have merely a prospective operation. United States Fidelity & G. Co. v. Struthers Wells Co. 209 U.S. 306, 52 L. ed. 804, 28 Sup. Ct. Rep. 537; Davidson Bros. Marble Co. v. United States, 213 U.S. 10, 53 L. ed. 675, 29 Sup. Ct. Rep. 324. The decisions lend no support to the contention now urged on behalf of the plaintiff in error, that Congress intended the act of 1905 to be retroactive in all cases where the work was done after the passage of the amendment.

Judgment affirmed.