Court Opinion

ID: 8746933
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:10:58.534925+00
Date Added: 2024-06-11T17:00:43.740809
License: Public Domain

McKENNA, Circuit Justice
(dissenting). I am unable to concur in the conclusion of the court. I think the bill of intervention states a cause of action for at least $2,747. There was due the contractors, McCauley & Delaney, when they abandoned their contract, the sum of $3,924.31. Thirty per cent, of that sum the city had a right to retain, and to that 30 per cent, only — to the rights of the city in that 30 per cent. — was the surety company subrogated. Seventy per cent, of the sum was a vested substantive right of the contractors, and passed by their assignment to the bank. This view is sustained, in my opinion, not opposed, by the case of Prairie State Nat. Bank v. U. S., 164 U. S. 227, 17 Sup. Ct. 142, 41 L. Ed. 412. In that case, as in this, the controversy was between assignees of a contractor and a surety on the bond of such contractor, and the surety prevailed. But the assignment in that case was void because given in violation of section 3477 of the Revised Statutes of the United States. In the case at bar the assignment was and is valid. In that case, therefore, the rights of the parties were held to be equitable only, and that of the surety was held to be the superior. What was the equity of the •surety? A right to the xo per cent, in subrogation to the rights of the United States in that percentage. In the case at bar the surety company is not only subrogated to the right of the city to the 30 per cent, which the city had a right to reserve, but to the 70 per cent, of the sums due which the city had no right to reserve, and which could be and was legally assigned.
The demurrer to the bill of complaint should have been overruled.