This is an action brought under the act of August 13, 1894, chap. 280, 28 Stat. at L. 278, U.S.C.omp. Stat. 1901, p. 2523, as amended by the act of February 24, 1905, chap. 778, 33 Stat. at L. 811, U.S.C.omp. Stat. Supp. 1909, p. 948, upon a bond given to the United States, as required by that act. The contract to secure which the bond was given was a contract by the Puget Sound Engine Works to build and deliver a single screw wooden steamer for the United States, and the main question in the case is whether the statute applies to a contract for such a chattel. If not, parties like the plaintiffs, who furnished labor or materials for the work, have no standing to maintain the suit. We proceed, as soon as may be, to dispose of that question, leaving details and minor objections to be taken up later in turn. It was raised by demurrer to the declaration, and subsequently by what was entitled an affirmative defense pleaded by the surety and a demurrer by the plaintiffs. The decision was for the plaintiffs, against the surety, in the circuit court of appeals. 89 C. C. A. 618, 163 Fed. 168.
The amended statute requires any person 'entering into a formal contract with the United States for the construction of any public building, or the prosecution and completion of any public work, or for repairs upon any public building or public work, . . . to execute the usual penal bond . . . with the additional obligation that such contractor or contractors shall promptly make payments to all persons supplying him or them with labor and materials in the prosecution of the work.' It gives any person who has furnished labor or materials used in the construction or repair of any public work, which have not been paid for, the right to intervene in a suit upon the bond. In short, besides securing the United States, the act is intended to protect persons furnishing materials or labor 'for the construction of public works,' as the title declares. The question narrows itself accordingly to whether the steamer was a 'public work' within the meaning of the words as used.
As a preliminary to the answer, it is relevant to mention that by article 3 of the contract, partial payments are provided for as the 'labor and materials furnished' equal certain percentages of the total, and that by article 4 'the portion of the vessel completed and paid for under said method of partial payments shall become the property of the United States,' although the contractor remains responsible for the care of the portion paid for, and by article 2 there is to be a final test of the vessel when completed. The vessel has been built and accepted, and is now in possession of the United States. Notwithstanding these facts, it was argued that the statute did not apply to the contract, because the laborers and materials had a lien by the state law; and that, even if the statute applied, they had lost their rights by not asserting them before the delivery of the vessel, as before that, it is said, the title did not pass to the United States. Among other things, this ended the right to subrogation that the surety might have claimed. But the very recent decision in United States v. Ansonia Brass & Copper Co. 218 U.S. 452, 54 L. ed. 1107, 31 Sup. Ct. Rep. 49 [Nov. 28, 1910] establishes that the title to the completed portion of the vessel passed, as provided in article 4, and that the laborers and materialmen could not have asserted the lien supposed to exist.