Bonded Products Co. v. R. C. Gallyon Construction Co.

On August 6, 1957, respondent and cross-appellant B. C. Gallyon Construction Co., Inc. (Gallyon) entered into a construction contract with the Saugus Union School District for the construction of an elementary school. Pursuant to Government Code, sections 4200-4210, Gallyon executed a surety bond with respondent and cross-appellant American Automobile Insurance Company (American) in the amount of $50,750. This bond provided that the surety would pay for any materials or labor not paid for by Gallyon.

Gallyon thereafter entered into a subcontract with Arthur V. Beeee dba Sterling Woodcraft (Sterling) for the furnishing of certain cabinets and mill work for the school project.

Sterling entered into an oral agreement with appellant Bonded Products Co. (Bonded). Bonded was then a licensed partnership and had the same name as appellant which is its transferee corporation. Bonded, the partnership, agreed to and did furnish Sterling with formica counter tops built to Sterling’s specifications at an agreed price, and in a separate contract, dated June 23, 1958, agreed to furnish labor to install the counter tops.

Prior to executing said contracts, the partners of Bonded had filed…