The opinion of the court was delivered by: BARD
This matter arises on plaintiff's motion for summary judgment pursuant to Rule 56(a) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c.
The record shows that in 1934 plaintiff entered into a contract with the United States for construction work. Defendant DesLauriers Steel Mould Company, Inc., entered into a subcontract with plaintiff to perform certain of the work and delivered to plaintiff its bond for the faithful performance of this subcontract with the defendant Continental Casualty Company as surety thereon. DesLauriers did not complete performance and failed to pay certain of its employees and materialmen. Plaintiff was obligated to complete the work and pay the wages of these employees.
In this Heard Act suit, which was instituted in the United States District Court for the District of Columbia, DesLauriers intervened and asserted a claim against plaintiff for failure to pay it moneys due it under the subcontract and for certain alleged additional labor and materials. Plaintiff filed his answer to this declaration and filed a counterclaim against DesLauriers for failure to perform its contract with plaintiff. DesLauriers filed a reply to this counterclaim and the issues raised by the pleadings were referred to a special master, before whom the case was tried for four days.H. Rook Goshorn, Esquire, counsel for defendant Continental Casualty Company in the present, case, acted as trial counsel for DesLauriers and filed briefs on its behalf. According to an affidavit filed by the plaintiff in support of its present motion, Continental Casualty Company procured the attendance of witnesses at the trial, filed its undertaking for costs in the Washington proceedings, and has paid, or has become obligated to pay, Mr. Goshorn for his services rendered in that proceeding.
The United States District Court for the District of Columbia in that action rendered judgment in favor of plaintiff in this action in the amount of $16,952.21.
The present action was instituted by plaintiff against DesLauriers and Continental Casualty Company as surety for breach of the contract between plaintiff and DesLauriers. The allegations in this action are substantially identical with those in the counterclaim against DesLauriers in the Washington action. An answer has been filed only on behalf of Continental Casualty Company, which latter will hereinafter be referred to as defendant. The defenses raised by this answer are the same as those presented by DesLauriers in the Washington action.
In support of his motion for summary judgment plaintiff filed an affidavit setting forth the matters referred to above which he contends demonstrate that Continental Casualty Company participated in the prior action and is accordingly bound by its outcome. Defendant filed no counter-affidavit. It contented itself at oral argument and in its brief with challenging the competency of the plaintiff to aver of personal knowledge that the defendant "has paid, or is obligated to pay, the counsel fees of H. Rook Goshorn, Esquire" for his services in the Washington proceeding, or that the defendant paid the travelling expenses of the witnesses mentioned. Counsel for defendant stated in his brief that his participation in the Washington trial was "at the request and invitation of counsel for DesLauriers Steel Mould Company, Inc. and as co-counsel with him", and quoted from a letter written to him by counsel for DesLauriers as follows: "As I stated on my trip to Philadelphia, I should be very happy indeed to have you actively participate in the trial of this case with me. The case is very complicated and I feel your services would be very valuable especially in view of your trial experience in cases involving contracts and in suits upon bonds."
Neither by way of counter-affidavit nor in his brief did counsel for defendant deny that defendant was obligated to pay him for his services in the Washington proceeding, nor did he set forth that DesLauriers had undertaken to pay him for these services, nor were the allegations of plaintiff's affidavit as to the procurement of the witnesses and the payment of their expenses by defendant denied. It was of course conceded that Mr. Goshorn, counsel for defendant in this proceeding, did actively participate in the trial of the Washington action.
Following oral argument, defendant moved to file an "additional" affidavit, apparently under Rule 56(e) of the Federal Rules of Civil Procedure. Plaintiff opposes this application on the ground that since defendant elected not to file any counter-affidavit prior to the argument, it should not thereafter be permitted to file such an affidavit without showing good cause for his failure to file such an affidavit prior to the argument.
Under these circumstances the question is presented whether defendant participated in the Washington action to an extent sufficient to bind it by the judgment therein rendered. In the recent case of Massachusetts Bonding & Ins. Co. v. Robert E. Denike, Inc., 92 F.2d 657, the Circuit Court of Appeals for this circuit upheld the entry of a judgment for the plaintiff against a surety which had participated in an action by the plaintiff against the principal in which the same issues had been raised. The participation by the surety in that case was the presence of its mechanical engineer at the trial at the direction of the defendant and his assistance in procuring witnesses for the principal. Said the court at page 658 of 92 F.2d:
"In general, a judgment against the principal is prima facie evidence against the surety, and "if the surety participates in the action against his principal, he is concluded as to the issues therein decided against his principal.' 50 Corpus Juris, p. 199; Moses v. United States, 166 U.S. 571, 17 S. Ct. 682, 41 L. Ed. 1119; Burley v. Compagnie De Navigation Francaise [9 Cir.], 194 F. 335; Strathleven Steamship Co. v. Baulch, [4 Cir.], 244 F. 412; Imperial Refining Co. v. Kanotex Refining Co. [8 Cir.], 29 F.2d 193, 200.
"While the question of what constitutes participation has not been clearly defined by the courts, we think the activity of the defendant at the proceedings in the state court, through its accredited agent, Alva O. Greist, justified the finding of the referee that the defendant had ...