283 Mass. 463 | Mass. | 1933
The defendants John E. Dyer and Joseph F. Dyer contracted with the defendant city for the construction of a boiler plant in a jail. Under G. L. c. 149, § 29, the city obtained security in the form of a bond, with. a surety company as surety, for the payment by the contractors and subcontractors for labor and materials. ' The- contract provided for the payment monthly by the city to the contractors of eighty-five per cent of the value of the work done during the month, and contained this provision: “Article III. The Contractor further agrees that he will pay all bills for labor and materials contracted for on account of the work herein contemplated and that he will furnish the Architects, at their request, with evidence satisfactory to the Architects that all persons who have done work or furnished materials under this contract . . . have been fully paid or satisfactorily secured, and in case such evidence is not furnished, the Architects shall cause to be retained out of any amount due the Contractor sums sufficient to cover any such unpaid claims. While it is understood that the security required to be given by the Contractor to satisfy the conditions of section 23 of chapter 514 of the Acts of the year 1909 [now G. L. (Ter. Ed.) c. 149, § 293 is furnished by the
The contractors stopped work before the job was finished, and litigation between them and the city ensued. Dyer v. Boston, 272 Mass. 265. The city had retained fifteen per cent of the money due to the contractors for completed work, or $5,938.06. After deducting from the appropriation of $100,000 (see Dyer v. Boston, 272 Mass. 265) the money paid to the contractors and the cost to the city of finishing the job, the sum of $5,080.18 out of the retained money remained on hand. This was the amount of the finding in favor of the contractors in the case of Dyer v. Boston, 272 Mass. 265. The contractors never collected the amount of that finding, for on July 30,1928, the W. M. Kellogg Company, a subcontractor, filed a petition to obtain payment out of the $5,080.18, on the ground that that sum was security obtained by the city under G. L. c. 149, § 29, for the payment by the contractor .for labor and materials. Other subcontractors intervened on September 11, 1928, and November 17, 1928, claims were established to an amount exceeding the sum retained, and a decree was entered on December 1, 1931, ordering the city to pay to the subcontractors the whole sum of $5,080.18 retained, and ordering the surety company to pay the balance of their claims. The city complied with this decree, and nothing was left in its hands.
In the meantime, on August 17,1929, the present plaintiff had brought this bill to reach and apply, in satisfaction of a judgment against John E. Dyer, the interest of John E. Dyer in the balance of $5,080.18 owed by the city to John
This ruling was right. A city may obtain security “by bond or otherwise.” It may obtain the required security by a combination of a surety bond and a retained sum, or by either alone. Otis Elevator Co. v. Long, 238 Mass. 257, 267. McCliniic-Marshall Co. v. New Bedford, 239 Mass. 216, 224. Dolben v. Duncan Construction Co. 276 Mass. 242, 248, 249. Newbury v. Lincoln, 276 Mass. 445. Cunningham v. Commonwealth, 278 Mass. 343. Commercial Casualty Ins. Co. v. Murphy, 282 Mass. 100. It is true that a sum retained is not necessarily a statutory security. A bond may be the only statutory security, and the sum retained may be exclusively for the benefit of the municipality, to secure the performance of the contract. A right to use the sum to pay claims for labor or materials regardless of compliance with statutory conditions does not make the sum statutory security. George H. Sampson Co. v. Commonwealth, 208 Mass. 372. Dolben v. Duncan Construction Co. 276 Mass. 242, 249. Conversely, a retained sum may be the only statutory security, and a surety bond may be taken merely for the benefit of the municipality. Hunter v. Boston, 218 Mass. 535, 538, 539. Central Supply Co. v. United States Fidelity & Guaranty Co. 273 Mass. 139, 144, 145.
By its equitable attachment (Snyder v. Smith, 185 Mass. 58), the plaintiff succeeded only to such rights as the contractors had in the fund. The retained sum being a statutory security, the rights of the subcontractors who obtained the decree in the Kellogg suit were superior. Newbury v. Lincoln, 276 Mass. 445, 450, and cases cited. See also J. H. McNamara, Inc. v. McGuire, 254 Mass. 589. The plaintiff is not entitled to payment from the city. The decree was right in limiting the relief granted to the establishment of the claim of the plaintiff upon its judgment.
Decree affirmed with costs to the defendant city of Boston.