Court Opinion

ID: 9422495
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:02:54.771984+00
Date Added: 2024-06-11T17:22:37.156725
License: Public Domain

Mr. Justice Clark,
with whom
Mr. Justice Douglas and Mr. Justice Brennan join, concurring in the result.
The Court holds that the surety company here is entitled to the funds the Government has paid into court on the theory that the surety is subrogated to the claims of the laborers and materialmen which it has paid. I cannot agree. None of the cases in this Court so hold. Indeed, in United States v. Munsey Trust Co., 332 U. S. 234 (1947), this Court said:
“But nothing is more clear than that laborers and materialmen do not have enforceable rights against the United States for their compensation. . . . They cannot acquire a lien on public buildings . . . and as a substitute for that more customary protection, the various statutes were passed which require that a surety guarantee their payment. Of these, the last and the one now in force is the Miller Act under which the bonds here were drawn.” Id., at p. 241.
“[I]t is elementary that one cannot acquire by subrogation what another whose rights he claims did not have. . . .” Id., at p. ¿42.
Since the laborers and materialmen have no right against the funds, it follows as clear as rain that the surety could have none. It appears to me that today’s holding that laborers and materialmen had “rights” to funds in the Government’s hands might jeopardize the rights of the United States and have serious consequences for its building operations. The Congress has not so provided and I would not so hold.
*143However, this Court has held in two cases not necessary to the decision in Munsey that the surety who pays laborers’ and materialmen’s claims stands in the shoes of the United States and is entitled to surplus funds remaining in its hands after the contract is completed. The first is Prairie State Bank v. United States, 164 U. S. 227 (1896), and the other Henningsen v. U. S. Fid. & Guar. Co., 208 U. S. 404 (1908). In neither of those cases, however, did the Court find that laborers and materialmen had any right against the United States but only that the “Guaranty Company [was] entitled to subrogation to any right of the United States Government arising through the building contract.” Henningsen, supra, at p. 410.
Since the funds here have been paid into court by the Government, there is some question whether the doctrine of those cases would apply. In each of them the money was in the hands of the United States at the time the suit was commenced and was clearly applicable to payment of any debt under the contract. It would, therefore, be my view that the equities existing here in favor of the surety grow out of the contract between it and the contractor (in whose shoes the trustee now stands), which was made in consideration of the execution of the bond. Under that agreement in the event of any breach or default in the construction contract all sums becoming due thereunder were assigned to the surety to be credited against any loss or damage it might suffer thereby. In Martin v. National Surety Co., 300 U. S. 588 (1937), this Court in an identical situation* awarded such a fund to *144the surety. Mr. Justice Cardozo, for a unanimous Court, said: “In our view of the law, the equities in favor of materialmen growing out of that agreement [between the surety and the contractor] were impressed upon the fund in the possession of the court.” Id., at pp. 593-594. It is well to note also that the Court of Appeals in Martin had based its decision on the theory announced by the Court today, but Mr. Justice Cardozo for a unanimous Court chose the “narrower” ground of the assignment in affirming the judgment for the surety. I agree with Martin as to the “narrower” ground and believe the Court should keep the opinion today “within the necessities of the specific controversy” rather than enlarging upon the rules of Henningsen and Prairie State Bank. In so doing the Court would but fulfill the prophecy made in Martin that “the grounds chosen . . . may be expected to be helpful as a guide in other cases.” Id., at p. 593.
I would affirm the judgment on this basis.

In Martin the contractor assigned to the surety “all the deferred payments and retained percentages, and any and all moneys and properties that may be due and payable to' the undersigned at the time of any breach or default in said contract, or . . . thereafter ., Id., at pp. 590-591. Here the assignment was of, inter alia, “Any and all *144percentages of the contract price retained on account of said contract, and any and all sums that may be due under said contract at the time of such . . . forfeiture or breach, or that thereafter may become due . . . .”