United States v. Congress Constr. Co., 222 U.S. 199 (1911)

222 U.S.
199
32 S.Ct. 44
56 L.Ed. 163
UNITED STATES OF AMERICA et al., Plffs. in Err.,

v.
CONGRESS CONSTRUCTION COMPANY et al.
No. 63.
Argued and submitted November 14 and 15, 1911.

Decided December 4, 1911.
Assistant Attorney General Harr for the United States.
Mr. Jesse R. Long for plaintiffs in error other than the United States.
Mr. Allen G. Mills for S. N. Crowen, one of the defendants in error.
Mr. Justice Van Devanter delivered the opinion of the court:
This was an action by the United States against the principal and sureties on a
bond, given conformably to the act of August 13, 1894, chap. 280, 28 Stat. at.
L. 278, U. S. Comp. Stat. 1901, p. 2523, as amended February 24, 1905, chap.
778, 33 Stat. at L. 811, U. S. Comp. Stat. Supp. 1909, p. 948, for the
performance of a contract for the construction of a public building, and
containing the required additional condition relating to the payment of claims
for labor and materials. As stated in the declaration, the right of action arose out
of the fact that, although the building had been satisfactorily completed, and
full payment therefor had been made to the contractor, the latter had failed to
make payment to designated subcontractors who had furnished labor and
materials used in the construction of the building. The action was brought in the
circuit court of the district whereof the defendants were inhabitants, which, as
appeared on the face of the declaration, was not the district in which the
contract was to be performed. The subcontractors intervened and asked to have
their claims adjudicated and judgment rendered thereon. The principal in the
bond did not appear, but the sureties appeared specially, and interposed pleas to
the jurisdiction, upon the ground that, under the statute, conformably to which
the bond was given, power to entertain the action was vested exclusively in the
circuit court of the district wherein the contract was to be performed. The pleas
were sustained and the action dismissed for want of jurisdiction, whereupon
this direct writ of error was sued out and the jurisdictional question duly
certified.
2
Before coming to that question it is necessary to consider a motion to dismiss,

wherein the position is taken that the jurisdiction of the circuit court was not in
issue in the sense of the 5th section of the act of March 3, 1891, chap. 517, 26
Stat. at L. 826, U. S. Comp. Stat. 1901, p. 549. The position evidently rests
upon a misconception of the true import of the clause, 'In any case in which the
jurisdiction of the court is in issue,' in that section, as interpreted by repeated
decisions of this court, which, with one accord, hold that the jurisdiction of a
circuit or district court is in issue in the sense intended whenever the power of
the court to hear and determine the cause, as defined or limited by the
Constitution or statutes of the United States, is in controversy. The cases of
Louisville Trust Co. v. Knott, 191 U. S. 225, 48 L. ed. 159, 24 Sup. Ct. Rep.
119; United States v. Larkin, 208 U. S. 333, 52 L. ed. 517, 28 Sup. Ct. Rep.
417; and Fore River Shipbuilding Co. v. Hagg, 219 U. S. 175, 55 L. ed. 163, 31
Sup. Ct. Rep. 185, cited in support of the motion, do not conflict, but fully
accord, with this holding. In the first case, as this court was careful to state, the
power of the circuit court under the Federal law was not in controversy, but
only its authority, in the exercise of that power, to proceed in harmony with
recognized rules of law applicable alike to all courts, whether Federal or state,
possessing concurrent jurisdiction. In the second case, neither the interpretation
nor the operation of any statute defining or limiting the power of the district
court was in issue, but only the place of seizure of jewels sought to be forfeited
as fraudulently imported, which was a subsidiary matter, not amounting to a
jurisdictional question in the sense of the statute. In the third case, the issue
related, as was expressly said, to the applicability of a rule of law which was
general in its nature, and quite as controlling in other courts as in those of
Federal creation. And so it was that in those cases the jurisdiction of the courts
below was held not to have been in issue in the sense intended. On the other
hand, in Davidson Bros. Marble Co. v. United States, 213 U. S. 10, 53 L. ed.
675, 29 Sup. Ct. Rep. 324, a case closely in point here, the application of the
same guiding principle operated to sustain our jurisdiction. There, as here, the
objection to the jurisdiction of the circuit court was that the action was brought
in one district, when, under the Federal statutes, rightly interpreted, it should
have been brought in another. The objection was overruled, the case came here
upon a direct writ of error, and the ruling was reviewed and reversed; it being
said in the opinion: 'A party who is sued in the wrong district, and does not
waive the objection, may of right appear specially and object to the jurisdiction
of the court, and, the decision being against his objection, may of right bring
the question directly to this court.'
3
Here the jurisdiction of the circuit court, in the sense of its power to entertain
the action, in view of the statutory provisions bearing upon the place for
bringing such an action, was directly in issue, and so the case is rightly here
upon a direct writ of error. The motion to dismiss is accordingly denied.
Whether or not, under the act of 1894, as amended in 1905, power to entertain
the action was vested exclusively in the circuit court of the district wherein the
contract was to be performed, is the question which was presented to the court
below and answered in the affirmative; and the correctness of that answer turns
upon the nature of the action and the provisions of the statute.
According to the declaration, the contract for the construction of the building
had been satisfactorily performed, full payment therefor had been made to the
contractor, the conditions of the bond had been breached only by his failure to
pay designated subcontractors for labor and materials used in the construction
of the building, and the object sought to be attained was the adjudication and
enforcement of those demands, unaccompanied by any pecuniary demand of
the United States. Manifestly, therefore, the action, although brought by the
United States, was essentially one in hehalf of the subcontractors, and the
respective interests of the United States and the subcontractors therein were in
no wise different from what they would have been had the action been brought
in the name of the United States by the subcontractors, for the use and benefit
of the latter.
The statute, whilst authorizing persons holding unpaid demands for labor or
materials to bring such an action in the name of the United States, expressly
requires that it be brought 'in the circuit court of the United States in the district
in which said contract was to be performed and executed, irrespective of the
amount in controversy, and not elsewhere;' and also provides that only one such
action shall be brought, and that it shall be so instituted and conducted, in point
of notice and otherwise, that all demands of that class may be adjudicated
therein and included in a single recovery.
Considering the purpose of the statute, as manifested in these provisions, we

think the restriction respecting the place of suit was intended to apply, and does
apply, to all actions brought in the name of the United States, for the purpose
only of securing an adjudication and enforcement of demands for labor or
materials, whether instituted by the United States or by the creditors
themselves. The reasons for the restriction are as applicable in the one instance
as in the other, and it is difficult to believe that it was intended that it should be
less potent when the United States acts for the creditors than when they act for
themselves. The contention to the contrary is rested largely upon the
supposition that, in instances like the present, where the defendants, or some of
them, are inhabitants of another district, there is an insuperable barrier to the
maintenance of the action in the district wherein the contract was to be
performed. But this supposition is a mistaken one, for the provision restricting
the place of suit operates pro tanto to displace the provision upon that subject in
the general jurisdictional act (25 Stat. at L. 433, chap. 866, 1, U. S. Comp.
Stat. 1901, p. 508), and amply authorizes the circuit court in the district
wherein the action is required to be brought to obtain jurisdiction of the persons
of the defendants through the service upon them of its process in whatever
district they may be found.
8
We conclude that the question of jurisdiction was rightly resolved by the

Circuit Court, and its judgment is affirmed.
Affirmed.

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222 U.S.

UNITED STATES OF AMERICA et al., Plffs. in Err.,

Argued and submitted November 14 and 15, 1911.

Before coming to that question it is necessary to consider a motion to dismiss,

Considering the purpose of the statute, as manifested in these provisions, we

We conclude that the question of jurisdiction was rightly resolved by the

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