H. Herfurth, Jr., Inc. v. United States ex rel. Squire (85 F.2d 719, 1936)

STEPHENS, Associate Justice.

This case is an appeal from a judgment of the Supreme Court of the District of Columbia entered upon a verdict which the court directed in favor of the plaintiff below, whose successor in interest is "the appellee here, and against the defendants below, the appellants here. The suit was originally commenced in the name of the United States of America, to the use of G. H. Shartzer, The Union Trust Company of Dayton, Ohio, a body corporate, and I. J. Fulton, Superintendent of Banks, State of Ohio. Before the trial Shartzer and The Union Trust Company were dismissed from the case. After the appeal was perfected, Samuel H Smnre Sunenntendent of Banks, State of Ohio, was substituted for I. J. Fulton. The suit was on a Heard Act bond. The only questions in the case raised by the assignment of errors are those as to the admissibility of evidence.

The declaration, as amended, alleged in substance and effect that: On August 19, 1930, H. Herfurth, Jr., Inc. [hereinafter referred to as “Company”], one of the appellants, contracted with the United States to demolish a building located on Square 226 in the District of Columbia, to haul away the débris therefrom, and to furnish all labor and material for such purposes. On August 23, 1930, pursuant to the requirement of the Heard Act (28 Stat. 278, as amended by 33 Stat. 811, as amended by 36 Stat. 1167, § 291 [40 U.S.C.A. § 270]), the Company and the Massachusetts Bonding & Insurance Company [hereinafter referred to as “Bonding Company”], the other appellant, executed a bond to the United States conditioned in the usual terms for the faithful performance of- the contract of August 19, 1930, and for the prompt payment of all persons supplying the Company with Jabor and materials in the prosecution of the work. Thereafter, on a date not made to appear, the Company subcontracted the entire job to Rudolph W. Herfurth, and on March 20, 1931, he in turn subcontracted the steam shovel and truckage work to G. H. Shartzer upon terms of a stipulated sum per cubic yard for all débris shoveled into trucks and removed, and a stipulated sum per b°ur for use of the steam shovel in breaking up debris. A sum of $1,267.29 under this contract was left unpaid; Wherefore the plaintiff [appellee] prayed judgment under the bond against the Company and the, Bonding Company for the sum mentioned, with interest.

The defendants [appellants] filed two pleas. In the first they denied that the Company had breached the condition of the bond, and that the Company had not paid the sum in question to Shartzer. They ablleged that: Shartzer had been fully paid by the Company. They had no knowledge of the contract, or of the promises therein, between Rudolph W. Herfurth and Shartzer, or of the work done thereunder, or ^be failure of Rudolph W. Herfurth Pa7 Shartzer the sum in question. In ^be second they asserted that: After Shartzer entered into the contract with Rudolph W. Herfurth, Shartzer performed certain work thereunder, the nature and amount of which were to the appellants unknown. Thereafter, on a date not made appear, the Company took over from Rudolph W. Herfurth the completion of the work °f dem°bshmg the building and clearm5 the .^re “ “ connection with the completion of the work ky íhe Company> Schartzer, on April 20 1931, entered into a contract under seal .tl\e ^omPany and with H. Herfurth Jr” ^dually *7' "ír / Company and H' Herfurth Jr., obligated themselves pay Shartzer for work to be done by hf a* certain specified rates As a part ?f this agreement of April 20, 1931, and “ C°^lde[atlon thereof’ Shartzer< on April *931, by agent, executed a written release and receipt for and acknowledgment a ^ moneys due for work theretofore bone, or labor theretofore supplied, by Shartzer on Square 226, the said release and recelPt being in terms as follows:

“District of Columbia, ss:

“Before me, Alexander H. Galt) a Notary Public in and for the District of Columbia, personally appeared G. E. Francis, attorney in fact for G. H. Shartzer, who being first duly sworn stated that all moneys now due for labor and trucks on work now being performed by G. H. Shartzer, on Square 226, Washington, D. C, for H. Herfurth, Jr., Inc., have been duly paid in full to date.

“G. H. SHARTZER,

“By G. E. FRANCIS

“Attorney in fact.

“Sworn to and subscribed before me this thirtieth day of April, 1931.

“ALEXANDER H. GALT,

“[SEAL.] Notary Public. ”

After the execution of the contract of April 20, Shartzer performed substantial work thereunder, and the Company made full payment therefor to Shartzer and performed every act to be done by it. Wherefore the defendants [appellants] prayed judgment in their own favor.

Under these pleadings the case came on for trial in the Supreme Court of the District of Columbia before the court ^sitting with a jury. For the appellee there was offered and received in evidence the Company’s bid for the demolition of the building and the clearing of the square in question, a letter of acceptance of their bid from the Treasury Department, the Heard Act bond, and a certificate of final settlement of the contract between the Company and the Treasury Department. It was then stipulated that the Company had subcontracted the job to Rudolph W. Herfurth, and that he in turn had subcontracted a portion of the work, to wit the steam shovel and truckage work in question, to Shartzer; and the contract between Shartzer and Rudolph W. Herfurth was also put in evidence. Thereafter the appellee by deposition and stipulation proved that: Shartzer performed his work under the contract with Rudolph W. Herfurth, including work done in the week of April 11-17, 1931, inclusive. The amount due him for the work in that week, totaling $1,-267.29, had not been paid. Demand had been made therefor against the Company and the Bonding Company.

A part of the appellee’s case was proved by the deposition of one G. E. Francis, which, according to the record, was offered and received in evidence. Apparently this deposition was, according to the usual practice, read to the court and jury. In the course of the deposition Francis stated that when Rudolph W. Herfurth “fell down on his payment,” a new contract was entered-into between Shartzer and the Company and H. Herfurth, Jr., individually, to wit, the contract of April 20, 1931, referred to in the second plea of the appellants. This contract was offered and received in evidence at the taking of the deposition and was thus, as a part of the deposition, received in evidence at the trial. Francis, further stated in the deposition that after-the contract of April 20 had been entered into, the work was continued on the same basis as before, and that for all of the work done under that contract, Shartzer had been paid in lull. Further, in the course of the deposition, the attention of Francis was called “to what purports to be-a copy of a certain estimate set forth- on page three, in the second plea of the defendants [appellants], in the words and figures followingand then there was read into the deposition the words of the instrument printed above as having been, set forth in the appellants’ second plea. In the deposition Francis then stated, upon further direct examination, that he did not remember this document; but, after his, recollection was refreshed by the calling of' his attention to its date as April 30, and that of the contract between Shartzer and the Company as April 20, he stated “It runs in my mind that we were to give H. Herfurth, Jr., when the work was completed, to g'et our final money,, we were to. give him a release of the truck hauling and that is supposed to be the instrument that we made for that purpose.” He further testified that, although he did not recall the signing of this instrument: “Mr. Herfurth '[meaning H. Herfurth, Jr.] asked whether all bills were paid or not . . . for our truck hire and shovel hire .

That was brought up when we [Shartzer and Francis] were asking for the final settlement on the job.” Francis testified further: “This was undoubtedly the in-, strüment that was entered into to guarantee for Herfurth that the bills were paid.” And he explained that when he said “the bills were paid he referred to people hired to do work for Shartzer on Herfurth s job. On cross-examination Francis identified, as the document he had referred to m direct examination, a paper which was Then marked for identification Defendants Exhibit A.”

There was also introduced in _ support of the appellee s case the deposition of Shartzer. Therein he testified that he had been paid by the Company for all the work done and material furnished under the new contract of April 20, but that the $1,267.29 owing from Rudolph W. Herfurth had not been paid. Thereupon his attention was called to the instrument marked for identification “Defendant’s Exhibit A,” and in respect thereof he stated: “I don’t have any knowledge of that, no more than I think they told me in Washington, when I was there one time, we would have to furnish a release that all bills were paid. I think Mr. Herfurth, that is the last contractor, Herfurths, that paid us, before he would give us a final, we had to show that all our bills were paid on the whole job, not only on the first job, but on the first contract too, because he lead us on to believe that he was going to pay that.” '

To meet this case for the appellee, the appellants thereupon called m person as their only witness H. Herfurth, Jr.,^ president of the Company, who testified m substance that: The arrangements made between himself and the Company on the one hand and Shartzer on the other for the completion of the work, after the Company had taken it over from Rudolph W. Herfurth, were first made in a verbal agreement on or about April 18, 1931. He was then asked:

“Q. Were all of the terms of that verbal agreement embodied in a subsequent. written agreement of April 20, 1931? A. *

Q. Were some of them embodied m a later instrument? A. Yes, sir.” . .

He then identified the agreement of April 20, which had been offered and received in evidence for the appellee, and was then shown the paper dated April _ 30, 1931, identified as Defendants Exhibit A,” and the question put: '

“Q. I ask you- whether, these two • instruments constitute together the understanding which you had with Mr. Shartzer with respect to his continuing this work? A. Yes, they do.”

Thereafter the appellants sought to ye b the witness the terms of the verbal agreement of April 18. To this the appellee objected — upon the ground that the verbal agreement had merged in the written one of April 20 — and the court sustained the objection, and exception was noted. Thereupon the appellants:

“proffered that the witness Hugo Herfurth, Jr., if permitted would testify that there was an agreement between H. Herfurth, Jr., inc. and q H. Shartzer, entered into on or about the 17th of April, 1931, as a consideration or inducement to the contract later entered into on Aprii 20, 1931, under whicIl agreement Shartzer, in consideration of the alleged contract, agreed t0 release H. Herfurth, Jr., Inc., from any and au liability which it might have by virtue of its signature on the bond for work theretofore performed by R. W. Herfurth and not paid for.”

Upon objection by the court excluded the proffered testimony, and ex-cepf;ion was noted.

We think this ruling by the court was correct for the reason that the appellants had Just, made clear t0 the court that ^ were relying upon two instruments which together embodied the terms of the verbal agreement It is elementary that under these circuinstanCeS the terms of the agreement can be shown only by the instruments themselves. 5 Wigmore on Evidence, 2d Ed., §§ 2425-2449; Jones on Evidence, Civil Cases, 3rd Ed. § 434.

The appellants next offered in evidence the paper marked “Defendant’s Exbibit A” — the instrument dated April 30, 1931. Upon objection this was excluded an