Case Name: ECONOMY PLUMBING & HEATING CO., INC., ET AL. v. THE UNITED STATES
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1972-03-17
Citations: 197 Ct. Cl. 839
Docket Number: No. 226-65
Parties: ECONOMY PLUMBING & HEATING CO., INC., ET AL. v. THE UNITED STATES
Judges: Before Cowen, Chief Judge, Davis, Collins, Skelton, Nichols, Kashiwa, and Kunzig, Judges.
Reporter: United States Court of Claims Reports
Volume: 197
Pages: 839–855

Head Matter:
456 F. 2d 713
ECONOMY PLUMBING & HEATING CO., INC., ET AL. v. THE UNITED STATES
[No. 226-65.
Decided March 17, 1972]
A. Charles Lawrence, attorney of record for plaintiff and for Transamerica Insurance Company, third-party plaintiff.
Marie Segal, with whom was Assistant Attorney General Scott P. Crompton, for defendant.
Before Cowen, Chief Judge, Davis, Collins, Skelton, Nichols, Kashiwa, and Kunzig, Judges.

Opinion:
Per Curiam:
This case was referred to Trial Commissioner Mastín G. White with directions to make findings of fact and recommendation for conclusions of law under the order of reference and Rule 134(h). The commissioner has done so in an opinion and report filed on November 15,1971. On February 3, 1972, a joint motion for judgment under Rule 141 (b) was filed by counsel for plaintiff, the intervening or third-party plaintiff (Transamerica Insurance Company) and defendant, wherein it is stated that no intention to except to the commissioner's report is on file, that no party desires to except and that "the parties respectfully request that the Court adopt the Commissioner's findings of fact, opinion, and recommendation for the conclusion of law as the basis for the judgment in this case."
Since the court agrees with the commissioner's opinion, findings of fact and recommended conclusion of law, as hereinafter set forth, it hereby adopts the same as the basis for its judgment in this case without oral argument. Therefore, it is concluded that plaintiff and Transamerica Insurance Company, third-party plaintiff, are entitled to recover and judgment is entered for them in the sum of $473,010.86. It is further concluded that the third-party petition of Andrew B. Crummy, receiver for Lieb Bros., Inc., be and the same is dismissed for failure to prosecute the claim set out therein.
OPINION OP COMMISSIONER
White, Commissioner: This is an action for the recovery of $473,010.86, representing a portion of an equitable adjustment under contract No. DA-11-032-ENG-1232 ("the contract") that was — according to allegations in the petition — wrongfully withheld 'by the defendant.
It is my opinion that a recovery is warranted.
The contract was entered into as of October 4, 1951. The formal signatories to the contract were the defendant (represented by a contracting officer of the Chicago District, Corps of Engineers, Department of the Army) and Lieb Bros., Inc. ("Lieb"), a New Jersey corporation (represented by its president).
The contract provided for the construction of additional dormitories, mess halls, and appurtenant outside facilities at Scott Air Force Base near Belleville, Illinois. The contractor was to be paid $13,484,275.50 as the original contract price. The work, as reduced by a partial termination order, was completed in the spring of 1953 and was accepted by the Corps of Engineers ("the Corps") as of May 27,1953.
At the end of September 1955, Lieb filed a petition in bankruptcy under Chapter XI of the Bankruptcy Act. Lieb is now insolvent.
On November 18, 1960, the sum of $477,587.66, out of a total equitable adjustment of $544,848.33 awarded by the contracting officer under the provisions of the contract, was paid by the General Accounting Office to the Internal Beve-nue Service in order to cover payroll taxes and income taxes, together with interest and penalties thereon, which Lieb allegedly owed the defendant. Of the total tax indebtedness claimed against Lieb, only $4,576.80 involved payroll taxes, together with interest and penalties thereon, that arose out of the performance of the contract. The remainder of $473,-010.86 was applied by the Internal Bevenue Service in satis faction of tax obligations on tlie part of Lieb that were unrelated to the contract.
The present action for the recovery of the $473,010.86 which the Internal Revenue Service applied in satisfaction of Lieb's separate tax obligations that were unrelated to the contract was first instituted by Economy Plumbing & Heating Co., Inc. ("Economy"). In its petition, Economy alleged that it was a joint venturer with Lieb in the performance of the contract, that Lieb was insolvent and in receivership, and that Economy, as the solvent joint venturer, was suing on behalf of the joint venture for money to be applied in satisfaction of the debts and obligations of the joint venture. In this connection, the evidence in the record shows that the unpaid principal amounts of the outstanding debts and obligations of the joint venture, relating to the performance of the contract, exceed $2,000,000.
On motions filed by the defendant under former Rule 23(a) (1) — now Rule 41(a) (1) — notices were issued to certain third parties, and they filed petitions as third-party plaintiffs. One of the third-party plaintiffs is Andrew B. Crummy, receiver for Lieb. Although the customary notices were sent to Mr. Crummy, he did not participate in the trial and did not submit any requested finding's or brief to the commissioner after the trial. The other third-party plaintiff is Transamerica Insurance Company ("Transamerica"), successor by merger of American Surety Company of New York, which acted as surety on the performance and payment bonds required under the contract.
Economy and Transamerica have been represented by the same counsel throughout the court proceedings, beginning with the filing of Transamerica's petition as a third-party plaintiff.
The propriety of the defendant's action in applying $473,010.86 of tlie proceeds under the contract in order to satisfy Lieb's separate tax obligations that were unrelated to the contract depends upon whether the $473,010.86 belonged to Lieb. In this connection, Section 6321 of the In ternal Revenue Code of 1954 (26 U.S.C. § 6321) provides in part as follows:
If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person. [Emphasis supplied.]
Also, Section 6331 (a) of the 1954 Code (26 U.S.'C. § 6331 (a)) provides in part as follows:
If any person liable to pay any tax neglects or refuses to pay the same within 10 days after notice and demand, it shall be lawful for the Secretary or his delegate to collect such tax by levy upon all property and rights to property belonging to such person . [Emphasis supplied.]
Economy and Transamerica contend that the $473,010.86 in controversy represented a property right "belonging to" the Lieb-Economy joint venture, and not to Lieb alone, whereas the defendant contends that the $473,010.86 represented a property right "belonging to" Lieb alone.
It has long been the settled rule "that the interest of each partner in the partnership property is his share in the surplus, after the partnership debts are paid; and that surplus only is liable for the separate debts of such partner." United States v. Hack, 33 U.S. (8 Pet.) 271, 275 (1834). Thus, in a situation where a partner owes an individual tax, the Government's tax lien with respect to partnership property extends only to the interest of the particular partner in the surplus of the partnership property. United States v. Kaufman, 267 U.S. 408, 414 (1925).
Economy and Lieb were, in actuality, partners with respect to the performance of the contract, although only Lieb signed the contract as a formal party to it. Economy became involved with Lieb in the undertaking soon after the Corps issued its invitation for bids on the contract. On the basis of its extensive contracting experience in the Illinois area, Economy rendered assistance along various lines in connection with the preparation of a bid to be submitted by Lieb, e.y., labor relations, negotiations with prospective subcontractors, acquisition of payment and performance bonds, and obtaining the necessary financial backing. Then, after bids had. been submitted, and while the Corps was negotiating with Lieb and other bidders, Lieb and Economy agreed that they would perform the contract as joint venturers if Lieb was successful in obtaining the job.
After the contracting officer for the Corps informed Lieb that its bid had been accepted, Lieb and Economy, as previously agreed, executed a written agreement for the performance of the contract as joint venturers. Under the agreement, the project engineer in charge of the work was to be answerable and responsible to both Lieb and Economy, all top-level decisions were to be made jointly by Lieb and Economy, and all checks, vouchers, notes, and other instruments were to be countersigned by both Lieb and Economy. The net profits or losses, as the case might be, resulting from the performance of the contract were to be shared by Lieb and Economy on a ©5-35 basis.
The contract was performed by Lieb and Economy as joint venturers. They participated together in all phases of such performance: financing, management, selection of personnel, selection of and dealings with subcontractors, dealings with the Corps, and dealings with labor unions.
Furthermore, at about the time when the contracting officer informed Lieb that its bid on the contract was accepted, Lieb and Economy notified the Corps that the contract was to be performed by Lieb and Economy as a joint venture, with Lieb having a 65 percent interest and Economy having a 35 percent interest in the job. Thus, the Corps was fully aware throughout the performance of the contract that the work was being done by Lieb and Economy as a joint venture.
The circumstance that Economy was not a formal signatory to the contract is not controlling with respect to the disposition of the present case. In this connection, the case of Stuart v. Willis, 244 F. 2d 925 (9th Cir., 1951), is especially significant. In that case, John E. and Edith P. Willis entered into a joint venture with King-Hoover Construction Company ("King-Hoover"), a corporation. King-Hoover was in a preferred position to obtain a certain construction contract with the Government, and the corporation did bid on and ob tain the contract in its name. Later, when the job was successfully completed by the joint venture, the Government owed $12,278.18 on the job.
King-Hoover was indebted to the Government for payroll taxes, and the entire amount of $12,278.18 mentioned in the preceding paragraph was applied by the Government in satisfaction of King-Hoover's tax obligations. The tax indebtedness in connection with the joint venture's project amounted only to $3,610.95. Thus, the sum of $8,667.23, out of the $12,278.18 due on the construction contract, was applied by the Government in satisfaction of King-Hoover's taxes that were unrelated to the joint venture's project. The joint venture filed suit for the recovery of the amount that had been applied to the payment of King-Hoover's separate tax obligations.
In holding that the joint venture was entitled to recover, the court stated in part as follows (244 F. 2d at p. 929):
There is no statute which permits the Collector to effect a tax liability to the United States against payments due on such a job to King-Hoover from the United States, even though the contract is in the name of King-Hoover alone. He is required to proceed by levy against the property of a taxpayer. There is no statute which permits the Collector to levy upon the property of a partnership for the outside liabilities of the partner. Since the Collector levied upon the property of the taxpayers, Willis and King-Hoover, to liquidate a tax liability of King-Hoover alone, the levy was void.
In the present case, therefore, the equitable adjustment in the amount of $544,848.33 which the contracting officer awarded under the provisions of the contract was a property right "belonging to" the Lieb-Economy joint venture that performed the contract. As the unpaid debts and obligations of the joint venture greatly exceeded the amount of the equitable adjustment, the equitable adjustment did not include any surplus that could be allocated between Lieb and Economy as their respective individual shares. Consequently, no part of the equitable adjustment was available for application in satisfaction of separate tax obligations on the part of Lieb that were unrelated to the contract.
It necessarily follows that the defendant acted without lawful authority wlien it applied a portion — i.e., $473,010.86 —of the equitable adjustment in satisfaction of Lieb's separate obligations that were unrelated to the contract. Economy and Transamerica are entitled to recover the $473,010.86 in order that this money may be available for the payment of the joint venture's outstanding debts and obligations, at least in part.
The third-party petition of Andrew B. Crummy, receiver for Lieb, should be dismissed because of his failure to prosecute the claim asserted in such petition.
Findings oe Fact
1. The parties to this proceeding are: Economy Mechanical Industries, Inc. (formerly Economy Plumbing & Heating Co., Inc.), the plaintiff; Andrew B. Crummy, Receiver for Lieb Bros., Inc., third-party plaintiff; Transmerica Insurance Company, third-party plaintiff; and the United States of America, the defendant.
2. Economy Mechanical Industries, Inc., formerly named Economy Plumbing & Heating Co., Inc. (hereinafter called "Economy"), is a corporation duly organized under the laws of Illinois. Economy is — and at all times material to these proceedings has been — solvent.
3. (a) Lieb Bros., Inc. (hereinafter called "Lieb"), is a corporation duly organized under the laws of New Jersey.
(b) On or about September 30, 1955, Lieb became insolvent and filed a petition for an arrangement under Chapter XI of the Bankruptcy Act. Andrew B. Crummy was appointed, and is now acting, as Receiver for Lieb.
(c) At the present time, Lieb is insolvent.
4. Transamerica Insurance Company (hereinafter called "Transamerica") is a corporation duly organized under the laws of California. On January 1, 1964, American Surety Company of New York, a New York corporation (hereinafter called "Surety"), was merged into Transamerica, and Transamerica thereby succeeded to the assets and business of Surety.
5. On August 6,1951, the United States Army Corps of Engineers (hereinafter called "the Corps") solicited bids for tlie performance of Contract No. DA-11-032-ENG-1232 (hereinafter called "the contract"), a government contract for the construction of additional facilities at Scott Air Force Base near Belleville, Illinois.
6. (a) During September of 1951, when Lieb was preparing a bid on the contract, Economy participated with Lieb in its efforts. Economy supplied contracting experience in the Illinois area, assistance in the preparation of the bid, assistance in labor relations, assistance in the negotiations with prospective subcontractors, assistance in the acquisition of payment and performance bonds, and financial backing through its own resources and contacts with financial institutions in. Chicago.
(b) A bid on the contract was submitted in Lieb's name.
7. During the latter part of September 1951, after bids on the contract had been submitted by Lieb and others, and while the Corps was negotiating with Lieb and other bidders, Lieb and Economy agreed that they would perform the contract as joint venturers if Lieb was successful in obtaining the job.
8. On October 4,1951, the contracting officer for the Corps wrote a letter to Lieb, stating in part as follows :
In accordance with negotiations with you, your proposal in the amount of $13,484,275.50 for Construction of Additional Facilities at Scott Air Force Base, near Belleville, Illinois, is accepted.
Inclosed are three (3) copies of the contract which are to be signed on page 17 and the Certificate as to Corporate Principal executed.
There are also inclosed two (2) sets each of required performance and payment bonds, which should be completed, signed and witnessed, the Certificate as to Corporate Principal executed, and the corporate seal affixed. The bonds should then be executed by the bonding companies.
When the above instructions have been complied with, please return all papers to this office as promptly as possible. Your copy of the contract will be furnished you when it has been executed for the United States.
9. (a) On October 22, 1951, Lieb and Economy, as previously agreed (see finding 7), executed a written agreement ("the agreement") for the performance of the contract as joint venturers.
(b) The agreement contained the following provisions (among others):
1. Both parties will forthwith and simultaneously with the execution of this agreement jointly execute the bonds called for in the contract between the Government and the First Party [Lieb] hereinabove referred to, as Co-Indemnitors.
2. The First Party agrees to subcontract the plumbing and heating work specified in the said Government contract to the Second Party [Economy] at a sum of THEEE MILLION SEVENTY SEVEN THOUSAND DOLLAKS ($3,071,000) for Schedules 1,2 and 5, exclusive of all painting and concrete work.
3. Both parties hereby agree that one, SIDNEY STILLEY, is to be engaged by the First Party in the capacity of a Project Engineer, in full charge of the work required to be done under the Government contract . Said STILLEY shall be answerable and responsible to the parties hereto in any of his undertakings as they relate to the Government contract.
4. The Second Party, as soon as it is expeditiously possible, will appoint an Assistant Project Engineer to assist the aforementioned Sidney Stilley, Project Engineer, in the execution and performance of the work called for in the Government contract .
5. Both parties reserve the right, upon reasonable notice to the other, to substitute Project and Assistant Project Engineers.
6. One duly authorized representative of each of the parties 'hereto shall:
(b) make all top-level decisions and ultimately decide matters of policy at weekly meetings;
(c) countersign all checks, vouchers, notes and all other negotiable and non-negotiable instruments as required.
# Jfc #
9. In further consideration of all of the foregoing, the First Party hereby agrees that the Second Party shall receive a sum equivalent to Thirty Five Percent (35%) of the net profits, if any, and shall accordingly share to the same extent in the losses, if any, to be realized from the Government contract.
12. As soon as is expeditiously possible, upon completion of the Government contract, the net profits shall be distributed in their proportion of 65% to the First Party and 35% to the Second Party ? provided, however, that upon renegotiation, the parties hereto agree to repay to the Government such sums, if any, as may be ordered by the Government, in the same proportion in which the profits herein are shared.
* =N * # *
16. Although the Government contract herein referred to throughout is presently in the amount of $13,484,275.50, any and all additional or extra work awarded to LIEB BEOS., INC. shall be considered a part of this contract as though fully set forth herein.
10. On October 24,1951, Lieb and Economy asked Surety to act as surety on the performance and payment bonds required under the contract. It was agreed that Lieb and Economy would indemnify Surety for any obligations which Surety might incur under the bonds.
11. (a) Commencing in early October 1951, and in any event not later than October 11, 1951, and on numerous occasions thereafter, Lieb and Economy notified the Corps, through the Chief of Construction, Colonel Merrill Nus-baum, the contracting officer, Colonel J. P. Campbell, Mr. Charles Wyant, legal counsel for the Corps, and others that Economy had a 35 percent interest as a joint venturer in this job (Lieb having the other 65 percent interest). In addition to its joint venture interest, Economy performed the plumbing and heating work on this job under a separate written subcontract.
(b) Economy did not attempt to sign the contract as a formal party to it.
12. (a) On October 29,1951, the contract was executed by Lieb and delivered to the Corps.
(b) On November 9,1951, after the required performance and payment bonds were delivered to the Corps, the Corps executed the contract, mailed an executed copy to Lieb, and issued its notice to proceed with the work.
(c) The contract was signed for Lieb by David Lieb, President of Lieb, and for the defendant by the District Engineer, Chicago District of the Corps, as contracting offi cer. The contract was entered into as of October 4, 1951, between United States of America and "Lieb Bros., Inc. a corporation organized and existing under the laws of the State of New Jersey , hereinafter called the Contractor ."
(d) The contract did not refer to Economy.
13. (a) On November 10, 19511, one day following the issuance of the notice to proceed, the Corps, for its own reasons and convenience, as permitted under the contract, suspended — and eventually on March 3, 1952, terminated — 27 of the 30 identical dormitories, 3 of the 4 identical mess halls, and the appurtenant outside facilities for these buildings. The Government thereby became obligated to make "equitable adjustment" of the price for the continued portion of the contract. (The right to receive additional sums from the Government for the suspension and partial termination will hereinafter be called "the termination claim.")
(b) At no time has there been any default declared under the contract.
14. (a) Lieb and Economy, as joint venturers, performed the contract, as modified (see finding 13), and participated together in all phases of such performance: management, selection of personnel, financing-, selection and dealings with subcontractors, dealings with the Corps, and dealings with labor unions. Economy was also one of the larger subcontractors — and perhaps the largest subcontractor — on the job.
(b) The work was completed in the spring of 1953. The Corps accepted completion of the job as of May 27, 1953.
15. (a) Separate bank accounts were maintained for the performance of the contract, separate and distinct from the regular bank accounts of Lieb. All checks on such accounts of the partnership had to bear two signatures, one by a representative of Lieb and one by a representative of Economy.
(b) Lieb provided the initial working capital that was required for the job. Additional working capital was obtained through loans to the joint venture, for which Lieb and Economy were co-obligors. At one time, these loans totaled $479,400.
16. A separate set of books of account, payroll records, payroll tax records, and other accounting records were maintained for the performance of the contract, separate and distinct from the regular books of account, payroll records, payroll tax records, and other accounting records which Lieb maintained for its business activities other than the contract. Payroll tax returns on behalf of Lieb's business activities other than the contract were filed with, and payments thereon were made to, the District Director of Internal Eevenue, Newark, New Jersey. Payroll tax returns in connection with the performance of the contract were filed with, and payments thereon were made to, the District Director of Internal Eevenue, Springfield, Illinois.
17. (a) Following the completion of the job under the contract, and prior to Lieb's bankruptcy, Lieb and Economy jointly prepared a termination claim and submitted it to the Corps in September of 1953. The Corps objected to the joint venture's initial proposal and suggested that meetings be held with respect to it. Accordingly, several meetings were held; and at those meetings, personnel of Economy represented the joint venture. After the series of meetings mentioned in this paragraph, the joint venture agreed that it would withdraw the first termination claim and submit a new proposal, based on certain suggestions that had been made by the Corps.
(b) A second termination claim was prepared on behalf of the joint venture and was submitted to the Corps in June of 1955. This second termination claim was wholly prepared by Economy.
(c) At the end of September 1955, Lieb filed a petition in bankruptcy under Chapter XI of the Bankruptcy Act.
(d) Soon after Lieb's petition in bankruptcy was filed, personnel representing Economy, including Economy's attorney, had a conference with personnel of the Corps. Economy's attorney took the position at the conference that Economy, as the solvent partner in the joint venture with Lieb for the performance of the contract, was entitled to prosecute the pending termination claim on behalf of the joint venture. Personnel of the Corps indicated that all the interested parties should grant permission for Economy to continue to prosecute the termination claim.
(e) After the conference mentioned in paragraph (d) of this finding, personnel representing Economy had a conference with Andrew B. Crummy, the receiver of Lieb, with respect to the further prosecution of the termination claim. Mr. Crummy indicated that he did not desire to participate in the future prosecution of the termination claim, and that he would see to it that Economy's attorney received an order giving him the right to represent the joint venture in the prosecution of the termination claim.
(f) Following the conference referred to in paragraph (e) of this finding, Andrew B. Crummy, the receiver for Lieb, and Surety signed on April 16, 1956, a document which was referred to as a "Stipulation Relative to Prosecution of Termination Claim Heretofore Filed by Lieb Bros., Inc." and which (subject to judicial approval in the bankruptcy proceedings) provided that the attorney who was representing Economy was also retained as legal counsel to represent the receiver and Surety in the prosecution of the termination claim.
(g) On April 20,1956, the Referee in Bankruptcy, United States District Court for the District of New Jersey, entered an order in the bankruptcy proceedings relative to Lieb, authorizing the receiver to retain Economy's attorney for the prosecution of the termination claim (as well as all other claims of the debtor against the United States under the contract).
(h) Economy paid all the costs that were involved in the prosecution of the termination claim.
18. (a) Following protracted negotiations with the Corps concerning the second termination claim, the Corps in May 1960 suspended negotiations and unilaterally rendered an award in the sum of $544,848.38 on the termination claim. The right to receive payment of the award then accrued and became payable by the General Accounting Office ("GAO").
(b) The joint venture took an appeal to the Armed Services Board of Contracts Appeals ("ASBCA") from the award mentioned in paragraph (a) of this finding, con tending that the amount of the award was inadequate. A hearing on the appeal was held before the ASBCA during the period March 7-22, 1967. The parties were awaiting a decision from the AS'BCA at the time of the trial in November 1970.
19. In the bankruptcy proceedings involving Lieb before the United States District Court in Newark, New Jersey, Economy never filed an appearance or a claim.
20. In the schedules filed by Lieb in the bankruptcy proceedings, Lieb listed as a liability "Taxes due United States — $465,110.36."
21. In February 1980, Economy and Transamerica were informed, that the Internal Bevenue Service had asserted tax liens against Lieb. Over the objections of Economy and Transamerica, and without any notice to Economy or Trans-america, the sum of $477,587.66 from the award mentioned in finding 18 was paid by the GAO to the District Director of Internal Bevenue, Newark, New Jersey, on November 18, 1960.
22. Except for the $4,576.80 hereinafter described, all of the tax liabilities arising out of the performance of the contract were duly paid and discharged prior to November 18, 1960. The sum of $4,576.80 arising out of the performance of the contract and representing the aggregate sum of unpaid payroll taxes for the fourth quarter of 1952 and the first quarter of 1953, together with interest and penalties thereon, was paid and satisfied on November 18,1960, from the $477,587.66 paid by the GAO to the District Director.
23. The balance of said $477,587.66 paid by the GAO to the District Director on November 18,1960, i.e., $473,010.86, was applied by the District Director in satisfaction of payroll and income taxes and interest and penalties thereon, which sums defendant alleges were then owned by Lieb. The alleged payroll and income taxes of Lieb and interest and penalties thereon, aggregating $473,010.86, arose from construction jobs performed by Lieb other than the contract.
24. The apportionment of the $473,010.86 between taxes, interest accrued prior to September 30,1955, interest accrued after September 30, 1955, and penalties is hereinafter set forth:
Tases_$379, 025.17
Interest accrued prior to 9/30/55_ 31,200.77
Interest accrued after 9/30/55_ 62,172.43
Penalties_ 612.49
Total _$473,010.86
25. The assessment of the aforesaid taxes against Lieb occurred commencing on or about January 21, 1953, and continuing to on or about January 31, 1957. Liens against Lieb for the aforesaid taxes were filed 'by the District Director of Internal Eevenue in Newark, New Jersey, commencing on or about October 10, 1955, and at various dates thereafter.
26. At no time were Lieb's liabilities for the taxes, interest, and penalties of $473,010.86 so abated as to require a reassessment of them by the Internal Revenue Service before Lieb would be required to pay them.
27. The following, aggregating in excess of $2,000,000, are the unpaid principal amounts of outstanding debts and obligations of the joint venture between Lieb and Economy relating to the performance of the contract, in the order of priority, and without including any interest claimed by Transamerica and Economy:
To whom owed Description Amount
1. Transamerica- Payments to subcontractors and material suppliers. $1, 077, 335. 92
2. Economy_Payment of fees and expenses to date in litigating termination claim and Miller Act suits (in addition thereto, it is anticipated that substantial additional sums may have to be paid in the future in connection with said litigation including amounts which may accrue by reason of results obtained in said litigation). 291, 122. 53
3. Economy_Payments to subcontractors and material suppliers. 157, 643. 75
4. Economy_Balance due on plumbing and heating subcontract. 515, 200. 81
5. Lieb_Loans and advances_ 29, 621. 47
6. Economy_Loans and advances_ 55, 000. 00
7. Lieb_Original capital invested_ 150, 000. 00
28. Within the period of limitations for filing claims for refund, on November 9, 1962, and November 18,1962, Economy and Surety, respective] y, each filed with the District Director a claim for refund in the principal amount of $477,587.66, together with interest thereon, on the grounds set forth in petitions to this court. Prior to filing any petition in this court, more than 6 months had expired from the date of filing said claims for refund, and during said period, neither Economy nor Surety received notice of the allowance or disallowance of either of said claims for refund.
CONCLUSION OK DAW
Upon the foregoing findings of fact and opinion, which are adopted by the court and made a part of the judgment herein, the court concludes as a matter of law that the plaintiff and Transamerica Insurance Company, third-party plaintiff, are entitled to recover, and it is therefore adjudged and ordered that they recover of and from the United States the sum of four hundred seventy-three thousand ten dollars and eighty-six cents ($473,010.86).
The court further concludes as a matter of law that the third-party petition of Andrew B. Crummy, receiver for Lieb Bros., Inc., should be, and it is hereby, dismissed for failure to prosecute the claim set out therein.
The original petition asked for a judgment in the amount of $477,587.60, but the requested findings of fact that were submitted on behalf of the plaintiff and Transamerica Insurance Company, third-party plaintiff, reduced the demand to $473,010.86.
While tlie litigation was In progress, Economy's name was changed to Economy Mechanical Industries, Inc.