Source: http://masscases.com/cases/sjc/330/330mass531.html
Timestamp: 2019-04-21 22:03:51+00:00

Document:
GEORGE E. DUTEAU vs. NICHOLAS SALVUCCI & others.
BILL IN EQUITY, filed in the Superior Court on August 1, 1950.
The suit was heard by O'Connell, J., upon a master's report. The Commonwealth and Gallo Construction Co., Inc., appealed from the final decree.
Joseph E. Levine, for Gallo Construction Co., Inc.
John V. Phelan, Assistant Attorney General, for the Commonwealth.
Samuel H. Cohen, (Herbert L. Crimlisk with him,) for New Amsterdam Casualty Company.
Gallo out of the funds the Commonwealth had amounting to $99,534.53 and to pay the balance of $93,298.51 to the casualty company. All valid claims payable out of the security have been paid except that of Gallo.
The master found that Gallo commencing on October 18, 1949, embarked upon a continuing arrangement with the individual defendants to rent to them whatever road building equipment they needed if it was not already in use by someone else. No express contract with reference thereto was made. The master states that such an agreement was implied from the uniform nature and course of their dealings which he sets forth in much detail in his report. The parties continued in accordance with this arrangement until it terminated within sixty days before July 20, 1950, when Gallo filed a sworn statement of its claim. The allowance of this claim for $6,236.02 to be paid out of the security is not disputed by any of the parties.
In November, 1949, Gallo and the individual defendants made a contract for unloading crushed stone by Gallo at its railroad siding and transporting it to the site of the work at an agreed price. This unloading commenced on April 10, 1950, and ended on May 8, 1950. The master found that this work was performed under a separate express contract which was in no way connected with the implied continuing contractual arrangement which he found existed with reference to the rental of the Gallo equipment. He found that the individual defendants owed Gallo $10,726.55 for the unloading and transportation of the stone but that Gallo had no right to reach the security because its sworn statement filed on July 20, 1950, was more than sixty days after the contract had been performed.
now G. L. [Ter. Ed.] c. 30, Section 39A, inserted by St. 1951, c. 694), in order to reach the security for the satisfaction of its claim it was necessary to file a sworn statement of its claim "within sixty days after the claimant ceases to perform labor or furnish labor, materials, appliances and equipment." G. L. (Ter. Ed.) c. 30, Section 39. Mario Pandolf Co. Inc. v. Commonwealth, 303 Mass. 251. Massachusetts Gas & Electric Light Supply Co. v. Rugo Construction Co. Inc. 321 Mass. 20.
The second question arises out of an appeal by the Commonwealth from the final decree dismissing its petition to intervene.
In view of the conclusion we reach in this intervening petition, we need not decide whether the Commonwealth was a proper party intervener. See Old Colony Crushed Stone Co. v. Cronin, 276 Mass. 221, 227.
The Commonwealth contends that it is entitled to have set off or deducted from the retained cash percentage an outstanding execution amounting to $1,841.26 which the Commonwealth, through its division of employment security, obtained for "contributions" or taxes owed by the individual defendants under G. L. (Ter. Ed.) c. 151A (as revised by St. 1941, c. 685, Section 1), Sections 15, 16, and 17, as amended. It makes no contention that its claim as a judgment creditor of these defendants has priority over the claim of Gallo as allowed by the final decree but it insists that its judgment for the employment security taxes has priority over the rights of the casualty company to participate in the distribution of the cash retained by the Commonwealth and therefore that the final decree was wrong in ordering the Commonwealth to pay to the casualty company all this retained fund remaining after the payment to Gallo.
failed to file a sworn statement on time could not acquire rights in the security equal or superior to the rights of those who had properly filed statements of their claims. Commercial Casualty Ins. Co. v. Murphy, 282 Mass. 100. See also Hub Steel & Iron Works, Inc. v. Dyer, 283 Mass. 463.
The Commonwealth finally contends that the casualty company, having guaranteed payments, should not be permitted to share pro rata in the distribution of assets of the debtor until the creditors whose payments it had guaranteed have been paid. This principle has frequently been applied. See Commissioner of Insurance v. Conveyancers Title Ins. & Mortgage Co. 300 Mass. 457, 467; Delaware & Hudson Co. v. Boston Railroad Holding Co. 328 Mass. 63, 76-77. It should be noted, however, that there is no controversy here between the casualty company and those having claims the payment of which it guaranteed. Every claimant entitled to reach the security has been paid with the exception of Gallo. The amount of its claim and its right to be paid by the Commonwealth out of the retained funds have now been adjudicated. The casualty company never agreed to pay all creditors of the general contractors but agreed to pay only those having claims of the kind defined in G. L. (Ter. Ed.) c. 30, Section 39, as amended. The judgment for the unpaid employment security contributions or taxes is not a claim so defined. Finally, the Commonwealth held the funds in the nature of a trust for the benefit of those described in the statute and would have no right to use them for any other purpose. The casualty company is seeking to enforce its rights not merely as a surety but as the holder of valid claims against the retained percentage for which it paid $145,778.74. We need not decide as against this intervener, what rights, if any, the casualty company had by virtue of the indemnity contract executed between it and the individual defendants when the bond was issued.
thereon "shall have priority over all other claims against an employer, except wage claims." The taxable event under this chapter is the hiring of employees, and the purpose of the chapter is to aid those out of work by reason of economic conditions. Howes Brothers Co. v. Unemployment Compensation Commission, 296 Mass. 275, 282-283. Steward Machine Co. v. Davis, 301 U.S. 548. The object of G. L. (Ter. Ed.) c. 30, Section 39, is to secure payment for those who furnish labor and materials to the contractor or subcontractor in the construction or repair of public works undertaken upon the credit of the Commonwealth. These statutes have different aims and objects and are separate from and independent of each other. They are concerned with different means of increasing the public welfare. One is for the benefit of employees, and the other to aid laborers and materialmen. Each must be confined to its own particular field and construed harmoniously with the other. Brooks v. Fitchburg & Leominster Street Railway, 200 Mass. 8, 17. Commonwealth v. Welosky, 276 Mass. 398, 402-403. Smith v. Director of Civil Service, 324 Mass. 455, 458.
No funds were earmarked for the benefit of the individual defendants. They had no right to collect any sums that might be due until the claims of the laborers and materialmen had been paid. On this record it appears that the amount of valid claims exceeded the cash retained and it is hard to see on what a lien could be imposed for the collection of the employment security taxes owed by the individual defendants.
Laborers and materialmen have a right to look to the security taken for the payment of their claims and to expect that this security will not be lessened to their disadvantage by payments therefrom to others than those who are the statutory beneficiaries under said Section 39.
[Note 1] We need not decide whether the unloading or transportation of stone by Gallo is of such a nature as to come within the statute and permit Gallo to have recourse to the security for payment, as Gallo is barred therefrom as will hereafter appear. We therefore speak in general of laborers and materialmen in discussing the statute.

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