131 Reporter's Statement of the Case The defendant, in September 1943, applied as an offset the amount of $6,731.50 due it by the Federal Contracting Corporation, which was a claim not arising under any of the contracts under which plaintiff claims, against the total balances of $12,445.03 due under certain contracts and paid the receiver the difference of $5,713.53. The question presented is whether the Government was entitled as against The Aetna Casualty and Surety Company to retain the total of the balances due on the contracts, to the extent of the $3,568.23 here in controversy. The court, having made the foregoing introductory statement, entered special findings of fact as follows: 1. Plaintiff is a District of Columbia banking corporation with its place of business in Washington, D. C. It was appointed receiver by the District Court of the United States for the District of Columbia in an action entitled Irving Klein v. Henry Morgenthau, Jr., Secretary of the Treasury of the United States et al., being Civil Action No. 11643 in that court, and brings this suit in its capacity as receiver. 2. The Federal Contracting Corporation, a New York corporation (hereinafter sometimes referred to as the "contractor"), entered into the following contracts with the United States through the Public Buildings Administration for the painting and repair of various public buildings of the defendant: Post Office, Denver, Colorado, Contract WA-2-pb-531, May 10, 1940. Post Office and Court House, Tulsa, Oklahoma, Contract WA-2pb-629, July 6, 1940. Post Office, Whitewater, Wisconsin, Contract WA-2pb-597, July 2, 1940. Customs House, Portland, Maine, Contract WA-2-pb-609, July 2, 1940. Post Office, Skowhegan, Maine, Contract WA-2-pb-702, July 16, 1940. Post Office, Gallup, New Mexico, Contract WA-2-pb-806, July 26, 1940. At the time of the execution of the above contracts, the defendant required the contractor to give two bonds with surety in connection with each of them, one bond guarantee 736172-47-vol. 107-11 107 C. Cls. Reporter's Statement of the Case ing the performance of the contract and the other guaranteeing payment of materialmen and laborers. The latter type of bond contained the following provision: NOW, THEREFORE, If the principal shall promptly make payment to all persons supplying labor and material in the prosecution of the work provided for in said contract, and any and all duly authorized modifications of said contract that may hereafter be made, notice of which modifications to the surety being hereby waived, then this obligation to be void; otherwise to remain in full force and virtue. The Aetna Casualty and Surety Company, a Connecticut corporation, was surety on each of the bonds. 3. At the time The Aetna Casualty and Surety Company became surety on the various bonds above mentioned the Federal Contracting Corporation entered into agreements with it in connection with each of the bonds so written whereby it agreed, among other things, that it would at all times indemnify and keep indemnified The Aetna Casualty and Surety Company and save it harmless from and against all damages, loss, costs, charges, and expenses which it might at any time sustain or incur by reason of its suretyship; and further agreed that the surety should be subrogated to all its rights, privileges, and properties in the contracts, and assigned and conveyed to the surety all of the monies and properties that might be due and payable to it upon its failure to pay bills incurred on the work when they became due and payable, agreeing that the proceeds of such payments should be the sole property of the surety to be credited by it upon any damage, charge, or expense incurred by it under its bonds. Each of the agreements was identical in terms except that it related only to the specific contract and bonds in connection with which it was made. 4. At the conclusion of the work under each of the contracts referred to in finding 2 and after the allowance of credit for payments made by the United States, there remained due and owing from the United States to the contractor under each of the contracts the following amounts: 131 Reporter's Statement of the Case Denver, Colorado, Contract WA-2-pb-531. Tulsa, Oklahoma, Contract WA-2-pb-629—- Total $1,423. 67 5, 116. 10 910.00 3, 649.00 391. 60 954.66 $12, 445. 03 5. The contractor failed to make payment to certain persons who had furnished labor and material for use in the performance of the several contracts. The total amounts which the contractor failed to pay to such persons under each of the contracts are as follows: Denver, Colorado, Contract WA-2-pb–531. Total_ None $8,640. 10 648. 00 2,528.00 35.00 1,214. 83 $13, 065. 93 The Aetna Casualty and Surety Company, pursuant to demands by the furnishers of labor and material to these jobs and in accordance with information obtained as to its liability therefor, paid to such persons the total amount of the claims set forth above and in connection therewith each of those persons assigned to The Aetna Casualty and Surety Company his rights against the contractor. 6. On October 18, 1940, the Federal Contracting Corporation (the same corporation of that name previously referred to) submitted a bid in the sum of $20,743 for the painting of the United States Post Office at St. Louis, Missouri. The bid was accepted by the United States but the contractor failed to enter into the contract therefor in that it failed on November 16, 1940, to give the bond required in connection therewith. The United States thereupon caused the work to be performed at a cost of $27,867 which, together with the cost of readvertising the work in the amount of $22.50, created an indebtedness from the contractor to the United States in the amount of $7,146.50. After the application of its bid deposit of $415, there remained an indebtedness due from the contractor of $6,731.50. Reporter's Statement of the Case 107 C. Cls. 7. Thereafter, on June 4, 1941, one Klein, a stockholder of the contractor, instituted an action in the District Court of the United States for the District of Columbia as described in finding 1, wherein he sued the Secretary of the Treasury, the Treasurer of the United States, the Commissioner of Public Buildings, the Federal Contracting Corporation, The Aetna Casualty and Surety Company, its surety, and other persons not concerned in these proceedings. The plaintiff in that action sought the appointment of a receiver for the amounts payable by the United States under the several contracts herein mentioned and the distribution thereof to the labor and material furnishers, or in the alternative to The Aetna Casualty and Surety Company, which latter by counterclaim and crossclaims joined in the same prayers. Thereafter the plaintiff was appointed receiver in that action and directed by the order of its appointment to collect from the United States all monies due under those contracts and to hold the proceeds of such collection for the reimbursement of The Aetna Casualty and Surety Company for expenditures made by it in its payment to persons furnishing labor and materials under the contracts. The same order dismissed the action as to the Secretary of the Treasury, the Treasurer of the United States, and the Commissioner of Public Buildings. 8. Pursuant to the order of its appointment, the plaintiff made demand upon the United States for the proceeds of the several contracts referred to in finding 2. The balances due from the United States on these contracts were in the total amount of $12,445.03, as shown in finding 4, and the net indebtedness due to the United States on account of the failure of the contractor to enter into a contract for the painting of the post office at St. Louis, Missouri, was in the amount shown in finding 6, namely $6,731.50. The General Accounting Office made settlement of the above respective balances due from and to the United States in the following manner: 9. Plaintiff and The Aetna Casualty and Surety Company each protested the above action both before and at the time such action was taken. On July 14, 1944, the Comptroller General denied the protests and affirmed the action previously taken. Plaintiff reported these facts to the United States District Court in the action in which it was appointed and upon consideration of that report the court issued the following order: Upon consideration of the report and supplemental report of the receiver herein and the consents of counsel hereto appended, it is by the Court this 31st day of July, 1944, ORDERED that the receiver, The Munsey Trust Company, be and it hereby is authorized to pay over to The Aetna Casualty & Surety Company $5,213.53 from the funds in its hands and to retain the sum of $500.00 to defray the expenses of the proceeding hereinafter authorized, and it is further ORDERED that the receiver be and it hereby is authorized and directed to institute a suit in the Court of Claims of the United States for the recovery of such other and further amounts as may be due under the contracts of the Federal Contracting Corporation described in the complaint and answers filed in this proceeding. 10. The following tabulation shows the balances due under each of the contracts as set out in finding 4, payments by the surety to the furnishers of labor and material under each |