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UNITED STATES EX REL. "AUTOMATIC" SPRINKLER CORP.

February 20, 1961

UNITED STATES of America, for the use of: 'AUTOMATIC' SPRINKLER CORPORATION OF AMERICA, Plaintiff,
v.
MERRITT-CHAPMAN & SCOTT CORPORATION, Fidelity and Deposit Company of Maryland, American Employers' Insurance Company, Aetna Casualty and Surety Company, National Surety Corporation, Maryland Casualty Company, New Amsterdam Casualty Company, Hartford Accident and Indemnity Company, Defendants



The opinion of the court was delivered by: FOLLMER

In May 1952, Merritt-Chapman & Scott Corporation (hereinafter called 'Merritt-Chapman') entered into a contract with the United States of America for the construction of buildings, utility systems and site improvements for a Signal Corps Depot at Tobyhanna, Monroe County, Pennsylvania. The initial contract amount, before change orders, was $ 16,353,282.41 and the prime contractor, Merritt-Chapman, furnished a payment bond with Fidelity and Deposit Company of Maryland, American Employers' Insurance Company, Aetna Casualty and Surety Company, National Surety Corporation, Maryland Casualty Company, New Amsterdam Casualty Company, and Hartford Accident and Indemnity Company, wherein and whereby Merritt-Chapman, as principal, and the several surety companies bound themselves in the sum of $ 2,500,000.

Under a subcontract *fn1" known as No. 6-1557, dated February 4, 1953 (plaintiff's Exhibit No. 2) 'Automatic' Sprinkler Corporation of America (hereinafter called 'Automatic') performed a part of the work required of the prime contractor under its contract with the United States of America, i.e., installed automatic sprinkler system on the site of the aforesaid Signal Corps Depot, Tobyhanna, Pennsylvania. Thereafter under a second contract known as No. 6-1616 (plaintiff's Exhibits Nos. 5, 6, 7, and 8), plaintiff again performed a part of the work required of the prime contractor under its contract with the United States of America, i.e., installed a water flow alarm system. This contract was not covered by a formal writing but was encompassed in four letters.

 In this action under the Miller Act, 40 U.S.C.A. § 270a et seq., there was testimony on behalf of plaintiff that it had made complete performance under both of said contracts and that there remained due and owing to it from defendant under Contract No. 1 the sum of $ 7,828.07 and under Contract No. 2 the sum of $ 13,691.25, or a total of $ 21,519.32.

 At the first hearing on this matter, which was before the Court and without a jury, plaintiff did not offer any testimony to prove when the last work was done or the last material was supplied under either of the said contracts but rather relied entirely upon four exhibits, to wit: plaintiff's Exhibits Nos. 9, 10, 14A, and 14B, all of which were admitted without exception. Exhibit No. 9 is a ledger card captioned 'Accounts Receivable,' Contract No. 6-1557, Frederick Raff Company, in connection with Signal Corps Depot, Tobyhanna, Pa., and which shows a balance owing of $ 7,828.07. Action to the exhibit, the last requisition by plaintiff against Raff was made on August 10, 1954. Exhibit No. 10 is a ledger card captioned 'Accounts Receivable,' Contract No. 6-1616, Frederick Raff Company, in connection with Tobyhanna Signal Corps Depot, Tobyhanna, Pa., and which shows a balance owing of $ 13,691.25. This exhibit showed only one requisition under date of July 21, 1954. Exhibit No. 14A is copy of letter dated November 5, 1954, from 'Automatic' Sprinkler Corporation of America addressed to Mr. N. W. Eastwood, General Project Manager, Merritt-Chapman and Scott Corporation, 260 Madison Avenue, New York, New York. This letter is set forth in full in note hereto. *fn2" Exhibit No. 14B is Registry Receipt acknowledging receipt of said letter of November 5, 1954, stamped posted at New York 16, N.Y., addressed return to 'Automatic' Sprinkler Corporation of America, H. E. Teubner, Credit Manager, P.O. Box 360, Youngstown, Ohio, and signed for Merritt-Chapman & Scott Corp., indicating delivery on November 8, 1954. The mailing date was not proven. It was testified on behalf of the plaintiff, without objection, that Exhibits 14A and 14B were taken from the files of plaintiff where they were kept in the regular course of business.

 Apparently relying on the sufficiency of the exhibits above referred to, plaintiff made no attempt to prove that the last work was performed or the last material was supplied on either of said contracts within ninety days of November 8, 1954, (date of receipt of letter of November 5, 1954, supra) as it was required to do under the Miller Act.

 On October 27, 1960, believing that a further hearing should be held, the Court ordered that a hearing be set for November 28, 1960, at Scranton, Pennsylvania, and directed plaintiff to furnish such additional testimony as it might have (1) as to the date of the completion of the work under the various contracts here involved and the amounts due and owing under each separate contract, and (2) as to the exact notice given the prime contractor under the provisions of the Miller Act, 40 U.S.C.A. § 270b, as to form, content and time, with particular reference to the ninety day period referred to in the Act.

 At the rehearing plaintiff again failed to offer any direct testimony with respect to when the last work was performed or last material was supplied under either of said contracts. The Court, at the rehearing, again told plaintiff of the necessity for it to prove the date the last work was performed or last materials supplied. At plaintiff's request and over defendants' objection, the Court granted an adjournment until the following morning to enable plaintiff to produce a foreman or someone to testify to the essential dates.

 At the time of the adjourned hearing, plaintiff called a Mr. Scott, presently plaintiff's District Manager at Philadelphia. Scott testified that plaintiff's home office was at Youngstown, Ohio. Plaintiff then attempted to offer, through Scott, Exhibits Nos. 15 and 16. These papers were captioned: "Automatic' Sprinkler Corporation of America, General Offices, Youngstown 1, Ohio, Completion of Contract Report.' Both exhibits identified the work as that done on United States Signal Corps Depot Contract, Tobyhanna, Pennsylvania, -- Exhibit No. 15 on Contract No. 6-1616 with date work completed September 9, 1954, Exhibit No. 16 on Contract No. 6-1557 with date work completed September 9, 1954. Inasmuch as the hearing was before the Court without a jury, the exhibits were admitted conditionally over defendants' objection. I am now convinced the exhibits were not properly authenticated, identified and proven as business records of plaintiff.

 Scott testified that he had been in telephonic communication with James A. McDermott at the home office of plaintiff in Ohio; that McDermott told him, Scott, that the exhibits were being mailed to Scranton, and what they purported to be. He also testified that he, Scott, had had no personal connection with the work at Tobyhanna, and that all of the company's records in the matter were kept in the Youngstown office. The record of the first hearing in the case shows that McDermott, the Assistant Treasurer and Assistant Secretary of plaintiff, was present and testified in extenso at that hearing. The record fails to show that either Exhibit No. 15 or Exhibit No. 16 was offered at that time. Obviously, the only person other than the person who actually made the writing, who would qualify as a proper witness to prove the genuineness of the exhibits would be the custodian of the exhibits or the person in charge or in control of such records of plaintiff company.

 32 C.J.S. Evidence § 700 states:

 'In order to render the books and records of a corporation admissible in evidence, they must be duly authenicated and, likewise, they must be duly identified as such, and it must be made to appear that they are the books of the corporation, kept as such by the proper officer, or some other person authorized in his absence.'

 McDermott apparently would qualify as a proper custodian of these records. He was in court at the trial of this very case but no attempt was then made to offer the exhibits. Scott testified that Herbert L. Green who signed the proffered exhibits as foreman was still in the employ of plaintiff, located at Philadelphia, and available as a witness. He was not called. The defendants were thus deprived of their valuable prerogative of cross-examination. Clearly the exhibits were inadmissible.

 It seems more than a strange coincidence that both contracts should have been completed on the same day, -- the first large contract for over $ 300,000 starting in February 1953, and the second relatively small contract for about $ 13,000 starting in November 1953. Exhibit No. 9 (Contract No. 6-1557) clearly indicates that the last requisition date was August 10, 1954. Exhibit No. 10 (Contract No. 6-1616) clearly indicates that the last requisition date was July 21, 1954. Both exhibits indicate that as to both contracts the invoice date ...


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