Globe Indemnity Co. v. United States, 291 U.S. 476 (1934)

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Globe Indemnity Co. v. United States

No. 419

Argued February 13, 14, 1934
Decided March 5, 1934
291 U.S. 476

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE THIRD CIRCUIT

Syllabus

The Heard Act, 40 U.S.C. § 270, requires that, to secure the performance of a government construction contract and payment for labor and material furnished by subcontractors, the contractor shall furnish a bond, and provides that, if no suit is brought by the United States within six months from "the completion and final settlement" of the contract, a subcontractor may sue on the bond, provided the action be commenced within one year after "the performance and final settlement" of the contract, and not later.

Held:

1. That, where the administrative officer having the work in charge (in this case, the Secretary of the Interior) has found that the contract has been performed and has stated the amount due the contractor, and approved his claim therefor, this is "final settlement" within the meaning of the statute, although the officer, instead of ordering payment, refer the claim "for direct settlement" to the General Accounting Office. P. 481.

2. Under the Budget and Accounting Act, the function of the General Accounting Office in auditing and settling claims against the Government is the same as that which, before the Act, was exercised by the Accounting Office in the Treasury Department. P. 479.

3. A construction of the Heard Act as not fixing the time of "final settlement" by the final settlement in the department having charge of the contract, but as subjecting it to change by subsequent action of the Comptroller General, would be out of harmony with administrative practice, inconvenient of operation, and inconsistent with the obvious purpose of the statute to protect the interests of laborers and materialmen. P. 483.

66 F.2d 302 reversed.

Certiorari, 290 U.S. 618, to review a judgment which reversed a judgment for the Globe Indemnity Company in an action against it as surety on a bond securing a construction contract with the United States. The bond was given under the Heard Act, and the plaintiff relied on its provisions securing claims for material and labor.