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June 12, 1961

UNITED STATES of America for the Use and Benefit of BROWNE & BRYAN LUMBER CO., Inc., Plaintiff,
MASSACHUSETTS BONDING AND INSURANCE COMPANY, Defendant, and Ove Gustavsson Contracting Co., Inc., Intervenor

The opinion of the court was delivered by: BYERS

This is a Miller Act case in which the use plaintiff is Browne & Bryan Lumber Co., Inc., the defendant is Massachusetts Bonding and Insurance Company, and the general contractor who has intervened, is Ove Gustavsson Contracting Co., Inc.; for convenience, the first named will be referred to as plaintiff, and the intervenor as defendant. The Bonding Company, while the nominal defendant, tenders no issues that require decision, for the controversy boils down to the defendant's contention that the plaintiff did not make deliveries in accordance with the contract entered into between these parties.


 The complaint was filed April 6, 1960 and recited:

 (a) A contract between defendant and the United States of December 12, 1958, wherein defendant agreed to furnish all labor, equipment and materials for the repair of the sea wall and replacement of fenders on Pier G in the Brooklyn Navy Yard. It bears number NBy 21183, specification number 21183-58.

 (b) A performance bond in the penal sum of $ 158,768, and a payment bond in the penal sum of $ 79,384, conditioned for the prompt payment to all persons supplying labor and materials in connection with the said contract, which bond was accepted by the U.S.A.

 (c) The entry into sub-contracts between January 29, 1959 and September 16, 1959 by the plaintiff with the defendant, the total sum payable being $ 27,723.85 which was said to include a New York City sales tax of $ 650.09 and a demurrage charge of $ 15.

 (d) A modification of the foregoing on May 22, 1959, whereby the drilling of certain holes in the timbers was to be by the defendant, whereby the contract cost of drilling holes not already accomplished, namely 9,378 holes, was no longer to be charged by the plaintiff against the defendant at the contract rate of 20 cents per hole; thus there was an allowance to the defendant as to such items amounting to $ 1,875.60, which the plaintiff has not charged against the defendant, so reducing the contract price above referred to, to the sum of $ 25,848.25; of this sum only $ 6,000 has been paid, leaving a balance due of $ 19,848.25 for which payment was demanded.

 An answer was filed on August 30, 1960 which, in addition to denials of material allegations in the complaint including the jurisdiction of the court, alleged that the plaintiff was in default under its contract with the defendant and that the latter is a necessary and indispensable party.

 By motion granted January 5, 1961, the defendant was permitted to intervene and serve and file an answer. On January 18, 1961 there was filed an intervenor's 'plea,' which alleged that the plaintiff had failed to perform its contract with the defendant in the respects therein enumerated, namely,

 '* * * but the said lumber so delivered, was delivered undressed and unfabricated as specified in said contract, and other lumber was delivered in damaged condition which was duly rejected by the intervenor and the delivery of such part as was tendered was wholly or nearly so, delayed and that by reason thereof, the said use-plaintiff is and has been in default under the said contract.'

 The pleading continues that the intervenor supplied the necessary lumber and performed the work needed to dress and fabricate the lumber and did

 'incur the expense of supplying certain tools and machinery necessary to dress and fabricate said lumber to make the same fit for the purpose for which it was intended * * *.'

 Further that intervenor demanded the delivery of 5,800 board feet of lumber to replace that quantity of lumber which had been received in damaged condition, and plaintiff's failure to supply.

 It is averred that the defendant has suffered or incurred damage as indicated in the sum of.$ 23,500, which has been demanded and refused. By a memo filed April 13, 1961 the sum is restated to be $ 21,918.56 which is sufficiently close to the original contract price (as reduced) of $ 25,848.25, to render the counterclaim suspect as being artificially inflated.

 The second, separate cause of action is really a repetition of the foregoing.

 An amended answer was filed February 9, 1961 in which the contract between the plaintiff and the defendant is pleaded and the alleged breach and default of the plaintiff thereunder, and an appropriate offset is sought.

 The trial occupied twelve non-consecutive days between March 6 and april 5.

 General Statement

 Gustavsson had a contract with the Navy as above recited and in order to acquire timber needed for the fenders, he entered into the contract later to be set forth which gave rise to the issues to be decided. It is important to bear in mind that defendant's attorney appears likewise for the Bonding Company and while he is presenting the Gustavsson case as attorney for the latter, his client initially was the Bonding Company.

 It should be said at once that the burden of proof is upon defendant, plaintiff having shown delivery of what it contracted to provide as will be demonstrated. United States for Use of Acme Maintenance Engineering Co. v. Wunderlich Contracting Co., 10 Cir., 228 F.2d 66, at page 68; United States to Use and for Benefit of Foster Wheeler Corp. v. American Surety Co., 2 Cir., 142 F.2d 726, at page 728; United States ex rel. Johnson v. Morley Const. Co., 2 Cir., 98 F.2d 781, at page 789; United States for Use of Baltimore Cooperage Co. v. McCay, D.C., 28 F.2d 777, at page 780, Point 10.

 It will be convenient to state the respective Findings, with appropriate comment.


 1. Defendant's contract with the Navy is dated December 12, 1958 for 'Repair Seawall and Replace Fenders Pier 'G', complete and ready for use.' 'No. NBY-21183' Amount $ 158,768. Work to be started December 17, 1958, to be completed November 12, 1959. The following clause appears:

 'IV. The undersigned (the defendant) agrees to perform on site and with his own forces the following work; namely, concrete construction and timber work.'

 The foregoing is Plaintiff's Exhibit 1.

 2. Defendant has been paid in full by the Government the entire said contract price, plus $ 37,025 for extras, making a total of $ 195,793.

 The foregoing was reluctantly established at the trial and is not disputed.

 3. The written contract between these parties was initiated by a written tender by plaintiff dated December 15, 1958 bearing the notation, signed by defendant's president, reading: '1/16/59 O.K. to proceed with ordering lumber hold fab (fabrication) for confirmation.' Thus Plaintiff's Exhibit 2.

 The contract itself is embodied in plaintiff's letter to defendant dated January 29, 1959, approved by defendant February 2, 1959:

 Letterhead of Browne & Bryan Lumber Company, Inc.

 Grand Central Terminal, New York 17, N.Y.

 'January 29, 1959

 'Mr. Ove Gustavsson

 '135 Lakeville Road

 'New Hyde Park, New York

 'Re: NavDocks Spec. No. 21183/58 -- Repair Sea Wall and Replace Fenders Pier 'G' New York Naval Shipyard, Brooklyn, N.Y.

 'Dear Sir:

 'We herewith confirm your order of January 16th and have proceeded with the following:

 White Oak, Common Dimension (Freight Car Stock) in accordance with NHLA Rules:

 Dressed Four Sides -- Standard:

 Posts -- 170 Required:

 12 X 12 170/10' (X/cut to 9'0") (20400'BM) @ $ ...

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