Court Opinion

ID: 6923492
Source: CourtListenerOpinion
Date Created: 2022-07-23 23:10:11.29168+00
Date Added: 2024-06-11T16:06:51.990827
License: Public Domain

PICKETT, Circuit Judge,
(dissenting).
I cannot agree that a housing project constructed under the provisions of the Capehart Act1 is not a public work of the United States within the meaning of the Miller Act.2 If the contract for the housing project in this instance had been entered into between the United States and Harrison and Grimshaw Construction Company, and payment for the project had been made from appropriated funds, no one would question the applicability of the Miller Act. Lasley Const. Co. v. United States ex rel. Westerman, 5 Cir., 285 F.2d 98; Gypsum Contractors, Inc. v. American Surety Co., 37 N.J. 315, 181 A.2d 174 (May 7, 1962). Because funds were not currently available, the financing technique set forth in the Cape-hart Act was devised to permit the United States to acquire housing for members of its armed services on the installment plan, and the Act contemplates that the United States will be a party to any contract for the construction of housing pursuant to its provisions. The houses are to be built on land owned by the United States, and title to the houses passes to the United States as they are completed. Stripped of its formalism, the arrangement is simply one whereby the United States is able to finance the construction of housing projects through loans obtained by its prime contractor, which the United States is obligated to repay. Such a project is not in reality one built by a private entity with private funds at private risk. In the light of the frequently expressed policy that the provisions of the Miller Act are to be liberally. construed to carry out its purpose,3 the Miller Act would apply absent any requirement for bonds in the Capehart Act.
The majority opinion cites Armstrong v. United States, 364 U.S. 40, 80 S.Ct. 1563, 4 L.Ed.2d 1554, for the proposition that these housing projects are not pub-*370lie works and are therefore subject to local lien law. In that same case the Supreme Court also holds that once title to the property has passed to the United •States the liens cannot be enforced. I am convinced that when the Capehart units pass into the control of the Secretary of Defense that there is not such a taking as would entitle the materialmen or laborers to be compensated for their property which, according to the Armstrong case, amounts to a lien. This, of course, simply emphasizes the necessity for requiring payment bonds for such housing projects, and the distinctive bond visualized by the majority opinion would certainly fit the demands of public policy.
The key to this problem lies in the 1956 amendment to the Capehart Act,4 which is quoted in the majority opinion, and specifically in the phrase “the furnishing of such bonds shall be deemed a sufficient compliance with the provisions of section 1 of the Act of August 24, 1935 * * The majority read this language as excusing the furnishing of Miller Act bonds for Capehart Act projects, and this then leads them to conclude that Congress clearly intended that the provisions of the Miller Act would not apply to Capehart Act projects. Conceding that the statutory language is inartful, and it has not been explained in the legislative history, but considering all of the circumstances, I think that the cases which hold that the two statutes are to be considered in pari materia, and that the bonds described in the 1956 amendment to the Capehart Act are to be treated as having been furnished in lieu of the bonds described in Section 1 of the Miller Act, are correct. Lasley Const. Co. v. United States, supra; United States for Use and Benefit of Robertson Lumber Co. v. Progressive Contractors, Inc., D.N.D., 196 F.Supp. 171; United States to Use of Acme Furnace Fitting Co. v. Ft. George G. Meade Defense Housing Corp., No. 1, D.Md., 186 F.Supp. 639; Autrey v. Williams and Dunlap, W.D.La., 185 F.Supp. 802; Gypsum Contractors, Inc. v. American Surety Co., supra. The majority state that these cases were concerned only with whether federal jurisdiction existed, but such an interpretation fails to accord them their full significance since on this point what is said is in direct conflict with the conclusion of the Court of Appeals for the Fifth Circuit in Lasley Const. Co. v. United States, supra, and the views of the district courts in the other cases cited.5 I am certain that the view adopted in those decisions accords to the statutory language its most logical interpretation. It follows that the provisions of Section 2 of the Miller Act, 40 U.S. C.A. § 270b, including the notice requirement, should be read into the bond.6
*371The administrative form for bonds apparently furnished for Capehart Act construction is not that contemplated by the Miller Act. If this is to be considered as an administrative interpretation that the Miller Act was not applicable, then I think the interpretation was wrong. There could be no purpose or reason for Congress to state that the furnishing of a bond should be deemed a sufficient compliance with the provisions of Section 1 of the Miller Act if it was not intended that the bond furnished would be considered a Miller Act bond from that point forward.
For the reasons stated, I would reverse the judgment.

. Housing Amendments of 1955, § 403 et seq., 69 Stat. 651 (1955), as amended, 42 U.S.C.A. § 1594 et seq.

. 49 Stat. 793 (1935), 40 U.S.C.A. § 270a et seq.

. E. g. United States v. Carter, 353 U.S. 210, 77 S.Ct. 793, 1 L.Ed.2d 776; Clifford F. MacEvoy Co. v. United States for Use and Benefit of Calvin Tomkins Co., 322 U.S. 102, 64 S.Ct. 890, 88 L.Ed. 1163; T. F. Scholes, Inc. v. United States for Use of H. W. Moore Equip. Co., 10 Cir., 295 F.2d 366; Limerick v. T. F. Scholes, Inc., 10 Cir., 292 F.2d 195; Fanderlik-Locke Co. v. United States ex rel. Morgan, 10 Cir., 285 F.2d 939, cert. denied 365 U.S. 860, 81 S.Ct. 826, 5 L.Ed.2d 833.

. Housing Act of 1956, Section 507, 70 Stat. 1110 (1956), 42 Ü.S.C.A. § 1594 (a).

. The court in Lasley Const. Co. v. United States, 285 F.2d 98, 100, said:
“Appellants’ argument is plausible, but we are not persuaded by it. We think it clear that Congress considered that but for the provisions of the Capehart Act, quoted above, the contractor would be required to supply a builder with a Miller Act bond before entering upon a Capehart construction job, because such a project falls within the language ‘construction * * * of any public building or public work of the United States;’ that the purpose of the bonding provisions in the Capehart Act was merely to substitute it for the bond described in 40 U.S.C.A. § 270b (b), quoted above, and that the remainder of the provisions of the Miller Act would apply to the Capehart bond just as they do to a Miller Act bond. This would, of course, include the provisions conferring jurisdiction on the district courts of the United States.”

. Cf. People v. Metropolitan Surety Co., 211 N.Y. 107, 105 N.E. 99; 11 C.J.S. Bonds § 40(e) (1938); 91 C.J.S. United States § 107 (1955). See, e. g. Scott v. Kansas W. Pipe Line Co., 158 Kan. 160, 146 P.2d 366; Petition of Leon Keyser, Inc., 97 N.H. 404, 89 A.2d 917; Philip Carey Mfg. Co. v. Peerless Cas. Co., 330 Mass. 319, 113 N.E.2d 226; United Tile Co. v. Kermit Independent School Dist., Tex.Civ.App., 273 S.W.2d 434; Annos. 77 A.L.R. 21, 47 and 166 (1932), 89 A.L.R. 446 (1934), and 118 A.L.R. 57 (1939).