The opinion of the court was delivered by: FOLLMER
1. This is an action under the Miller Act, 40 U.S.C.A. § 270b, and this Court has jurisdiction.
2. Under date of May 27, 1952, the defendant, Merritt-Chapman & Scott Corporation, entered into a contract with the United States of America known as Contract No. DA-36-109 eng.-2901 for the construction of buildings, utility systems and site improvements for the Signal Corps Depot, Tobyhanna, Monroe County, Pennsylvania. Said contract was to be performed and executed at Tobyhanna, Monroe County, Pennsylvania, which is in the Middle District of Pennsylvania.
3. Under date of May 27, 1952, the defendant, Merritt-Chapman & Scott Corporation, as principal and the other defendants as sureties entered into a payment bond in accordance with the above Act of Congress to the United States of America in the penal sum of $ 2,500,000, conditioned for payment to all persons supplying labor and material in the prosecution for the work provided for in the contract above mentioned.
4. The defendant, Merritt-Chapman & Scott Corporation, proceeded to perform the work provided by the said contract and has, by and through its subcontractor, substantially completed the same. No final settlement of the contract had been made to the date of commencement of suit (January 25, 1957) by the United States of America with Merritt-Chapman & Scott Corporation, so that the period of limitations, namely, one year after the date of final settlement of such contract, provided by the statute above mentioned had not expired when suit was commenced.
5. The prime contractor is Merritt-Chapman & Scott Corporation.
6. Frederick Raff Company is a subcontractor on the job under the defendant, Merritt-Chapman & Scott Corporation.
7. John T. Evanick & Company, plaintiff, hereinafter called plaintiff Evanick, is a subcontractor on said job under Frederick Raff Company.
8. On October 9, 1952, the plaintiff Evanick entered into a written contract with Frederick Raff Company (Exhibit E-2, said exhibit also being Exhibit 'B' attached to plaintiff Evanick's complaint) for coal and ash handling equipment at the Tobyhanna Signal Depot for the price of $ 109,952.
9. The contract (Exhibit E-2) provides: 'Price to be adjusted in accordance with Government Regulations on steel, not to exceed 10% Escalation otherwise, price is firm.'
10. The last of the labor was performed and the last of the material was furnished by the plaintiff on November 19, 1954, under the said contract with Frederick Raff Company, for the unpaid balance of which claim is here made.
11. The supervisory personnel of the defendant, Merritt-Chapman & Scott Corporation, on the Tobyhanna project here involved were three employees of Merritt-Chapman & Scott Corporation known as Mr. Card, Mr. Rodriquez and Mr. Dean.
12. An oral notice was given to the prime contractor, Merritt-Chapman & Scott Corporation, by the plaintiff, John T. Evanick & Company, in the manner stated by John T. Evanick in his testimony as follows (Transcript of Testimony, pages 13, 49 and 50):
'Q. You testified you talked to Mr. Rodriquez and who else? A. I went to see Mr. Rodriquez, and he brought in Mr. Dean and Mr. Card.
'Q. And you gave them what? A. Duplicate invoices.
'Q. And what did those invoices evidence? A. It showed the amounts of payments we received and the amounts owed us.
'A. It showed the unpaid balance, yes.
'A. It showed to whom supplied * * *.
'A. * * * We also made demands on Merritt-Chapman & Scott, and the last demand we made we paid a visit to Merritt-Chapman & Scott at Tobyhanna and told them that since we were unable to get money from Frederick Raff, that we had to have money to pay off the people that we owed money, and I spoke to Mr. Dean and Mr. Rodriquez and Mr. Card, and they advised me they would inform their New York office so I would be paid and so I would be protected, and on their advice I wrote that letter on December 15.
'Q. When did this conversation take place with the representatives of the Merritt-Chapman & Scott? A. Say, the last week in November or the first week in ...