The opinion of the court was delivered by: ZAVATT
This is a suit on a Miller Act payment bond, 40 U.S.C.A. § 270a(a)(2), instituted by the use plaintiff, who furnished material to the defendant, Ben B. Greene, Inc., the electrical subcontractor of the defendant Bregman Construction Corp., the prime contractor. The subcontractor is in default of appearance and pleading and took no part in the trial. The suit against the prime contractor and its surety, New Amsterdam Casualty Company, was instituted pursuant to 40 U.S.C.A. § 270b. The complaint also alleges a claim against the defendant, Ben B. Greene, Inc., for goods sold and delivered. After a trial to the court without a jury, the court makes the following findings of fact:
1. On February 24, 1956, the defendant, Bregman Construction Corp. (hereinafter referred to as the prime contractor), entered into a written contract (No. DA 30-075 Eng. 7083) with the United States of American (hereinafter referred to as the Government) to furnish all the labor and materials and perform all of the work required to construct a Special AAA Facility at Lloyd Harbor, New York, for the sum of $ 864,442.
2. Said contract provided that the Government would make payments to the prime contractor, as the work progressed, at the end of each calendar month based on estimates made and approved by the Government's contracting officer; that in making such payments the Government would retain 10% of the estimated amounts until final completion and acceptance of all of the work covered by the contract; that after 50% of the work had been completed the contracting officer could make payment of the remaining monthly payments without retaining 10% of the estimated amounts, if he found that satisfactory progress was being made by the prime contractor; that final payment, including retained percentages, was not to be made until the final completion and acceptance of the work.
3. On February 24, 1956, pursuant to 40 U.S.C.A. 270a(a)(2), the prime contractor furnished to the Government a payment bond in the sum of $ 432,221 signed by the prime contractor as Principal and the defendant, New Amsterdam Casualty Company, as Surety, conditioned upon the prompt payment by the prime contractor 'to all persons supplying labor and material in the prosecution of the work provided for in said contract.'
4. On March 16, 1956, the prime contractor entered into a subcontract in writing with the defendant, Ben B. Greene, Inc. (hereinafter referred to as the subcontractor), by the terms the which the subcontractor agreed to furnish all labor, materials, tools, equipment, appliances and other things necessary to complete that portion of the electrical work (required to be performed under the prime contract) specified in the subcontract and the prime contractor agreed to pay to the subcontractor therefor the sum of $ 86,090 in monthly installments equal to 90% of the monthly estimate submitted by the subcontractor and accepted by the prime contractor. These monthly payments were not to be made, however, until the prime contractor received payment from the Government for the work performed by the subcontractor.
5. Shortly after the subcontractor entered into said subcontract with the prime contractor, the use plaintiff was advised by the subcontractor as to said subcontract and that the use plaintiff would receive orders from the subcontractor for the major part of the materials which it would require in the performance of its subcontract.
6. Between October 19, 1956 and January 14, 1957, the use plaintiff furnished materials in the prosecution of the work provided for in the prime contract by delivering the same to the site of the Special AAA Facility at Lloyd Harbor, New York. The materials were so furnished pursuant to a series of separate orders received by the use plaintiff from the subcontractor at agreed prices which were fair and reasonable. Of the orders so received and the materials so furnished (not fully paid for) the dates of delivery, unpaid balances of the agreed prices and fair and reasonable values, subcontractor's purchase order vouchers and subcontractor's invoice numbers are as follows:
Order No. Date of Delivery Invoice No. Unpaid Balance
2127 10/19/56 7404 $ 105.80
2177 10/29/56 7416 696.
2189 10/22/56 7526 330.
10/27/56 7626 6,289.13
11/29/56 F7966 63.27
11/29/56 8041 12.93
2121 after 12/13/56 8481 2,009.
after 12/ 7/56 8491 177.
after 1/ 2/57 8535 1.98
1/14/57 8649 59.84
Less credits conceded by
use plaintiff at the trial 285.30
Unpaid balance $9,459.65
7. The use plaintiff billed the subcontractor separately for each separate order he received from the subcontractor and filled, including the orders enumerated under Finding of Fact No. 6, and as to each such separate invoice received from the use plaintiff which the subcontractor paid in full or in part the subcontractor made such payments with reference to a designated invoice and purchase order and the use plaintiff credited each payment accordingly. There was no entire contract between the use plaintiff and the subcontractor for all of the materials so furnished by the use plaintiff nor did they treat said orders and materials furnished pursuant thereto on a running account basis.
8. On February 15, 1957, the use plaintiff gave written notice to the prime contractor and the surety that it claimed $ 9,598.42 for electrical supplies furnished to the subcontractor for use in the prosecution of the work provided in the prime contract; that the materials were so furnished at various times between August 20, 1956 and January 14, 1957. Said notice was served by mailing the same by registered mail, postage prepaid, addressed to the prime contractor at the place where it conducted its business and by similarly mailing a copy of said notice to the surety addressed at 60 John Street, New York 38, N.Y. The said addresses received said notices on February 18, 1957.
9. The prime contract was finally settled on September 30, 1957.
10. This suit was commenced on May 2, 1957, within one year after the date of final settlement of the prime contract.
Timeliness of the 90 day notice Defendants' Contention
The defendants, Greene and Bregman, contend that the 90 day notice was not timely as to the materials furnished during the month of October 1956 and that, therefore, the use plaintiff is not entitled to judgment based upon the first four deliveries listed above, the agreed prices of which total $ 7,480.77. They thereby concede that the use plaintiff is entitled to judgment as to the remaining items totalling $ 1,978.88.
The defendant's contend that, since the materials were not furnished pursuant to an entire contract or on a running account basis but, rather, on a separate order basis, § 270b, required the use plaintiff to serve separate notices within 90 days from the date of the last delivery under each separate order; that, therefore, the 90 day notice is not timely as to the materials furnished between October 19 and October 27, 1956. Because there were separate orders, billed separately, the defendants contend in their memorandum of law that each order and delivery pursuant thereto was a separate contract; ...