Court Opinion

ID: 9637679
Source: CourtListenerOpinion
Date Created: 2023-08-22 15:15:00.333153+00
Date Added: 2024-06-11T18:09:58.969092
License: Public Domain

LARAMORE, Judge.
I respectfully dissent because (1) the question is moot by reason of a disclaimer by the third party, Fidelity Trust Company, to any of the undisbursed contract proceeds; (2) the third party procedure set up by section 14 of the Contract Settlement Act of 1944 is applicable only to termination claims, and the claim asserted by plaintiff is not a termination claim; (3) the majority opinion unconstitutionally deprives Fidelity Trust Company of a jury trial as guaranteed by the Seventh Amendment to the Constitution; and (4) the plaintiff has no standing to sue in this court.
The posture of the case as it stands now should be noted. The plaintiff filed a petition seeking the alleged unpaid balance, $112,000, held by defendant under a contract that had been completed by the contractor. The plaintiff requested that Fidelity Trust Company be brought into *907the proceeding because it was believed that Fidelity had an interest in the proceeding. Notice was issued to Fidelity to come in and assert or defend any interest it had in the proceeding. On the same day that the petition was filed the defendant paid $56,287.68 to Fidelity pursuant to an assignment under the Assignment of Claims Act of 1940, as amended, 31 U.S.C. § 203, 31 U.S.C.A. § 203. Subsequently, Fidelity filed a disclaimer of any interest in the money still in the hands of defendant.
The plaintiff bases its claim on the merits on Royal Indemnity Co. v. United States, 93 F.Supp. 891, 117 Ct.Cl. 736; Hadden v. United States, 132 F.Supp. 202, 132 Ct.Cl. 529; and National Surety Corporation v. United States, 133 F.Supp. 381, 132 Ct.Cl. 724, certiorari denied, 350 U.S. 902, 76 S.Ct. 181. These cases 'stand for the proposition that a surety on a payment or performance bond has a superior equitable right over an assignee under the Assignment of Claims Act, supra, to the proceeds held by the Government in a stakeholder capacity and that this court has jurisdiction to determine this right. Had defendant not paid Fidelity, the assignee, this case would on the merits be governed by those decisions. However, as noted above, defendant has already paid Fidelity and Fidelity has formally disclaimed any right to the sums now held by defendant. The Government is no longer a stakeholder. The payment by the Government of the $56,287.68, pursuant to the assignment under- the Assignment of Claims Act, supra, as it had the right to do, automatically deprived this court of jurisdiction over the question of which party, the surety or assignee, had the superior equity to that sum. It is clear under the Assignment of Claims Act, its history, and the Supreme Court decisions, that the Government has the right to pay the contractor or his assignee under the act and thereby discharge its liability without being in "danger of becoming embroiled in conflicting claims, with delay and embarrassment and the chance of multiple liability.” Martin v. National Surety Co., 300 U.S. 588, 594, 57 S.Ct. 531, 534, 81 L.Ed. 822; Hobbs v. McLean, 117 U.S. 567, 6 S.Ct. 870, 29 L.Ed. 940; McGowan v. Parish, 237 U.S. 285, 35 S.Ct. 543, 59 L.Ed. 955. Thus it is clear, and our decisions in Royal Indemnity Co., Hadden., and National Surety Corporation, supra, concede, that the Government can pay the proceeds under the contract to the contractor or to his assignee, if he has assigned the contract pursuant to the Assignment of Claims Act, without subjecting itself to double indemnity. Thus the Government has discharged its liability under the contract and statute to the extent of the $56,287.68 and plaintiff cannot obtain a judgment against it for this amount. This fact and the disclaimer by Fidelity to any of the proceeds now held by the Government clearly show that Fidelity has no interest whatsoever in this case and that the Government has no legal interest in the sum already paid Fidelity. As noted above, the most that plaintiff could possibly recover from the Government is the money the Government now has on hand under the contract. Thus, this puts the plaintiff in the position of suing Fidelity for the $56,-287.68. Such a suit- involves a dispute between private parties in which the Government has no interest. This court clearly does not have jurisdiction of such a suit. The court’s jurisdiction is confined to the rendition of money judgments in suits brought for that relief against the United States. See United States v. Sherwood, 312 U.S. 584, 61 S.Ct. 767, 85 L.Ed. 1058, and cases cited therein. There is no authority by precedent or statute for this court to enter judgment and execute it against a private party.
The majority opinion holds that sec-' tion 114 of title 41, which is section 14 of the Contract Settlement Act, was a section of general application that amended our general jurisdiction. The act by its terms specifically provides in section 14 (c) that “The jurisdiction of the Court of Claims shall not be affected by this chapter except to the extent necessary to *908give effect to this chapter, [Termination of War Contracts] * * *.” The present claim is not a contract termination claim. The majority opinion refers to nothing in the legislative history that supports its interpretation. The letter to the chairman of the subcommitteee, dated April 19, 1944, from the Attorney General, was an unpublished letter which certainly could not be considered as part of the legislative history.
To require Fidelity to remain in this case for a decision on its right to keep the $56,287.68 is to deprive it of its right to the chairman of the subcommittee, enth Amendment to the Constitution.1 Fidelity has been paid and it cannot be required to give up this sum without, if it desires, a trial by jury. Cf. Ex Parte Skinner & Eddy Corp., 265 U.S. 86, 96, 44 S.Ct. 446, 68 L.Ed. 912. The majority opinion deprives Fidelity of the right to a jury trial on the ground that it automatically waived its right by dealing with the Government and accepting payment pursuant to an assignment, because of some general language in the Contract Settlement Act. It relies on a counterclaim case, McElrath v. United States, 102 U.S. 426, 26 L.Ed. 189, which holds that suits against the Government are not controlled by the Seventh Amendment because they are not suits at common law in its true meaning. This decision was based on the rationale that one cannot sue the soveréign without its consent and since the sovereign can prescribe under what conditions it will consent to be sued, a claimant who files suit must subject itself to those conditions, one of which was the right of the Government to counterclaim on a different subject matter. The expressed reason for the decision was that “If the claimant avails himself of the privilege thus granted [to sue the sovereign], he must do so subject to the conditions annexed by the government to the exercise of the privilege.” In the instant case Fidelity is not seeking any privilege from the Government, it merely dealt with it. There is nothing in the Contract Settlement Act that states or indicates that by merely dealing with the Government the person automatically loses its right to a jury trial in the event the Government should desire to sue that person in an action at common law. Moreover, I entertain grave doubt as to whether Congress could constitutionally provide for such a waiver.
I also dissent from the majority opinion because plaintiff has no standing to sue in this court. See dissenting opinion in Hadden v. United States, supra, 132 Ct.Cl. at page 532, and United States v. Munsey Trust Co., 332 U.S. 234, 67 S.Ct. 1599, 91 L.Ed. 2022.
I would grant the motion of Fidelity Trust Company and dismiss it from this proceeding.

. “In suit's at 'common law, where the value in- controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, * *