The United States entered into a contract with the petitioner Clifford F. MacEvoy Company whereby the latter agreed to furnish the materials and to perform the work necessary for the construction of dwelling units of a Defense Housing Project near Linden, New Jersey, on a cost-plus-fixed-fee basis. Pursuant to the Miller Act, MacEvoy as principal and the petitioner Aetna Casualty and Surety Company as surety executed a payment bond in the amount of $1,000,000, conditioned on the prompt payment by MacEvoy 'to all persons supplying labor and material in the prosecution of the work provided for in said contract.' The bond was duly accepted by the United States.
MacEvoy thereupon purchased from James H. Miller & Company certain building materials for use in the prosecution of the work provided for in MacEvoy's contract with the Government. Miller in turn purchased these materials from the respondent, Calvin Tomkins Company. Miller failed to pay Tomkins a balance of $12,033.49. There is no allegation that Miller agreed to perform or did perform any part of the work on the construction project. Nor is it disputed that MacEvoy paid Miller in full for the materials.
Within ninety days from the date on which Tomkins furnished the last of the materials to Miller, Tomkins gave written notice to MacEvoy and the surety of the existence and amount of Tomkins' claim for materials furnished to Miller. Tomkins as use-plaintiff then instituted this action against MacEvoy and the surety on the payment bond. The District Court granted petitioners' motion to dismiss the complaint for failure to state a claim against them. 49 F.Supp. 81. The Circuit Court of Appeals reversed the judgment. 137 F.2d 565. We granted certiorari because of a novel and important question presented under the Miller Act. 320 U.S. 733, 64 S.Ct. 267.
Specifically the issue is whether under the Miller Act a person supplying materials to a materialman of a Government contractor and to whom an unpaid balance is due from the materialman can recover on the payment bond executed by the contractor. We hold that he cannot.
The Heard Act, which was the predecessor of the Miller Act, required Government contractors to execute penal bonds for the benefit of 'all persons supplying him or them with labor and materials in the prosecution of the work provided for in such contract.' We consistently applied a liberal construction to that statute, noting that it was remedial in nature and that it clearly evidenced 'the intention of Congress to protect those whose labor or material has contributed to the prosecution of the work.' United States, for Use of Hill, v. American Surety Co., 200 U.S. 197, 204, 26 S.Ct. 168, 170, 50 L.Ed. 437. See also Mankin v. United States to Use of Ludowici-Celadon Co., 215 U.S. 533, 30 S.Ct. 174, 54 L.Ed. 315; United States Fidelity & Guaranty Co. v. United States for Benefit of Bartlett, 231 U.S. 237, 34 S.Ct. 88, 58 L.Ed. 200; Brogan v. National Surety Co., 246 U.S. 257, 38 S.Ct. 250, 62 L.Ed. 703, L.R.A.1918D, 776; Fleishmann Construction Co. v. United States to Use of Forsberg, 270 U.S. 349, 46 S.Ct. 284, 70 L.Ed. 624; Standard Accident Insurance Co. v. United States for Use and Benefit of Powell, 302 U.S. 442, 58 S.Ct. 314, 82 L.Ed. 350. We accordingly held that the phrase 'all persons supplying (the contractor) * * * with labor and materials' included not only those furnishing labor and materials directly to the prime contractor but also covered those who contributed labor and materials to subcontractors. United States, for Use of Hill, v. American Surety Co., supra, 200 U.S. 204, 26 S.Ct. 170, 50 L.Ed. 437; Mankin v. United States for Use of Ludowici-Celadon Co., supra, 215 U.S. 539, 30 S.Ct. 176, 54 L.Ed. 315; Illinois Surety Co. v. John Davis Co., 244 U.S. 376, 380, 37 S.Ct. 614, 616, 61 L.Ed. 1206. We had no occasion, however, to determine under that Act whether those who merely sold materials to materialmen, who in turn sold them to the prime contractors, were included within the phrase and hence entitled to recover on the penal bond.