Lease

In May, 1947, the appellants Lease and Leighland, entered into a contract with the Oregon State Board of Higher Education, for the construction by them of a women’s dormitory at the Oregon State College at Corvallis, all in accordance with the plans and specifications and other contract documents referred to in the agreement. Lease and Leighland then entered into a subcontract with the appellee John H. Gallagher, Inc. whereby the latter agreed to furnish the ready mixed concrete required by the specifications. The latter agreed to deliver the concrete at the job for a unit price of $9.50 per cubic yard. (A provision for increasing or decreasing the price should bulk cement prices increase or decrease pending the performance of the contract, is not material here.)

John H. Gallagher, Jr. was managing officer of both appellees, John IT. Gallagher, Inc. and Corval-lis Sand and Gravel Company, Oregon corporations. The appellants, Lease and Leighland, are citizens of the State of Washington.

The sub-contractor appears to have proceeded under its contract sometimes in the name of John H. Gallagher, Inc., and sometimes in the name of Corvallis Sand and Gravel Co. E'or the purpose of…