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(4) As to the claim of the United States Equipment Company, that rental for cars, track and equipment is not a claim for "labor and materials” recoverable on bond.
These contentions will be considered in their order. · First: The purpose of the act was to provide security for the payment of all persons who provide labor or material on public work. This was done by giving a claim under the bond in lieu of the lien upon land and buildings customary where property is owned by private persons. Decisions of this court have made it clear that the statute and bonds given under it must be construed liberally, in order to effectuate the purpose of Congress as declared in the act. In every case which has come before this court, where labor and materials were actually furnished for and used in part performance of the work contemplated in the bond, recovery was allowed, if the suit was brought within the period prescribed by the act. Technical rules otherwise protecting sureties from liability have never been applied in proceedings under this statute. As the basis of recovery is supplying labor and material for the work, he who has supplied them to a subcontractor may claim under the bond, even if the subcontractor has been fully paid. Mankin v. Ludowici-Celadon Co., 215 U. S. 533.
1 Guaranty Co. v. Pressed Brick Co., 191 U. S. 416; Hill v. American Surety Co., 200 U. S. 197; United States Fidelity Co. v. Struthers-Wells Co., 209 U. S. 306; Mankin v. Ludowici-Celadon Co., 215 U. S. 535; Title Guaranty & Trust Co. v. Crane Co., 219 U. S. 24; United States Fidelity Co. v. Bartlett, 231 U. S. 237; A. Bryant Co. v. N. Y. Steam Filling Co., 235 U. S. 327; Illinois Surety Co. v. Peeler, 240 U. S. 214. See also Equitable Surety Co. v. McMillan, 234 U. S. 448. In Hardaway v. National Surety Co., 211 U. S. 552, where recovery was denied, the "use plaintiffs” had not furnished materials or labor, but were financiers. In Texas Cement Co. v. McCord, 233 U. S. 157, the questions involved were whether suit was brought within the statutory period. In United States Fidelity Co. v. Kenyon, 204 U. S. 349; United States v. Congress Construction Co., 222 U. S. 199; Title Guaranty & Surety Co. v. Harlan & Hollingsworth, 228 U. S. 567, the questions raised were as to the jurisdiction of the court.
If Schott had formally sublet the contract to the Engineering Company, the Surety Company would clearly be liable. But the transfer of the business was, at most, a subletting; since under Rev. Stats., § 3737, Schott could not assign a contract with the United States.
It is urged that the bond referring to Schott provides protection only to those "supplying him or them labor and materials.” But the claims in question were in a very practical sense furnished him as well as the Engineering Company. He remained liable on the contract; and no one else was known to the United States. Furthermore, if attention is to be directed to the precise wording of the bond, it should be noted that it refers to Schott “his or their heirs, successors, executors or administrators”; and the Engineering Company may properly be deemed a successor. The argument that the surety's risk ought not to be increased by holding it liable for the default of strangers to the original contract is of no greater force in the case of an assignee than it is in that of the subcontractor. The Surety Company could protect itself by insisting that the contractor require a bond from all subcontractors and assignees. The Surety Company was in nowise prejudiced by the transfer of the business, since the management remained unchanged; and no reason is shown for applying the rule of strictissimi juris. Guaranty Co. v. Pressed Brick Co., 191 U. S. 416, 426.
Second: The contract and bond were made in Illinois and were to be performed there. Questions of liability for interest must therefore be determined by the law of that State. Scotland County v. Hill, 132 U. S. 107, 117. Under the law of Illinois the liability of a surety on a bond is extended beyond the penalty by way of interest from the date when the liability on the bond accrued. Holmes v. Standard Oil Co., 183 Illinois, 70. See United States v. U. S. Fidelity Co., 236 U. S. 512, 530, 531. The liability here accrued at least as early as the commencement of the
Opinion of the Court.
suit. The Surety Company contends that the amount each claimant was to receive was not made definite until it was actually decided by the Court of Appeals. But the claims were all for liquidated amounts; and in no instance was the amount in dispute. The controversy was merely as to which of the claimants should be entitled to share in the liability under the bond. The Surety Company might have paid into court at the commencement of the suit an amount equal to the penalty of the bond. It did not elect to do so; and as the aggregate liability on the claims exceeds the penalty, it was properly held for an additional amount equal to interest from the commencement of the suit.
Third: The contention of the Surety Company that certain of the claimants are estopped from enforcing liability on the bond rests upon different acts in respect to the several creditors. As to some it is because they filed against the estates in bankruptcy of both Schott and the Engineering Company the whole of their claims for material delivered in part to each. As to one creditor the estoppel is predicated upon the fact that in answer to an enquiry he recommended that the receiver in bankruptcy complete the contract. As to another creditor the estoppel is predicated upon the fact that he filed his claim in bankruptcy against the Engineering Company while the materials had been furnished to Schott. As to still another, the contention rests upon the fact that having claims against both Schott and the Engineering Company, he had stated to the Engineering Company a single account covering all the items and had accepted part payment; and furthermore had participated in the activities of the creditors' committee which supervised the business throughout the whole period. Such acts lack all the elements of an equitable estoppel. The Surety Company was not led thereby to do or to omit to do anything. It did not rely upon, nor was it affected by, any of the acts it now calls
attention to. Dickerson v. Colgrove, 100 U. S. 578, 580. There is in fact no inconsistency between the claimants' earlier acts and their attempt to recover on the bond. The Surety Company's contention is without merit.
Fourth: The specific objection made to the claim of the United States Equipment Company, for rental of cars, track and equipment used at the Naval Training Station and the expense of loading the plant and freight thereon to and from the station is also unfounded. The Surety Company contends that this is not supplying “labor and materials.” The cquipment was used in the prosecution of the work. Material was thus supplied, although,a loan serving the purpose, no purchase of it was made. The expense of loading and freight were properly included with the fixed rental as recoverable under the bond. Title Guaranty & Trust Co. v. Crane Co., 219 U. S. 24, 34.
Dissenting: MR. JUSTICE VAN DEVANTER and MR. JUSTICE McREYNOLDS.
MISSOURI, KANSAS & TEXAS RAILWAY COM
PANY OF TEXAS ET AL. v. WARD ET AL., AND HOUSTON & TEXAS CENTRAL RAILROAD COMPANY.
ERROR TO THE COURT OF CIVIL APPEALS, THIRD SUPREME
JUDICIAL DISTRICT, OF THE STATE OF TEXAS.
No. 241. Submitted April 30, 1917.-Decided June 4, 1917.
Under the Carmack Amendment, the bill of lading issued by the initial
carrier governs the entire transportation; the liability of each participating carrier is fixed by its valid, applicable terms; and new con
ditions can not be introduced by a connecting carrier through a
second bill of lading. Without there being any break in the transportation or readjustment
of rates, a connecting carrier issued a second bill of lading containing a stipulation, not in the original bill, by which its liability for damages was made conditional on service of a written claim within a certain time. Held, that the shipper's acceptance of the new bill was
without effect upon the rights of the parties. Under the Carmack Amendment, acceptance by the shipper with
out consideration of a second bill of lading governing a part of the through transportation and which contains new terms more favor
able to the carrier is without effect. 169 S. W. Rep. 1035, affirmed.
The case is stated in the opinion.
Mr. Alexander Britton, Mr. Joseph M. Bryson, Mr. Charles C. Huff, Mr. Alexander H. McKnight and Mr. C. S. Burg for plaintiffs in error.
No appearance for defendants in error.
MR. JUSTICE BRANDEIS delivered the opinion of the court.
This is an action to recover damages for injuries to cattle in the course of an interstate shipment. The cattle were delivered on August 23, 1912, by J. R. Ward to the Houston and Texas Central Railroad Company at Llano, Texas, for transportation by it to Elgin, Texas, and over connecting lines, the Missouri, Kansas & Texas Railway Company of Texas, and the Missouri, Kansas & Texas Railway Company, to Winona, Oklahoma. The Houston Company issued a through bill of lading in the form of the "live stock contract” in common use, and charged a through rate, which was paid by the shipper as agreed. The cattle arrived at destination in a crippled and debilitated condition, alleged to have resulted from the