Milwaukie Construction Co. (Inc.), a Corporation, F. H. St. Pierre and Mary St. Pierre v. Glens Falls Insurance Company, a Corporation

In 1964 F. H. St. Pierre and Mary St. Pierre were officers and directors of Milwaukie Construction Company (Milwaukie), a general construction firm. Between April and July, 1964, Milwaukie had four contracts to build public buildings and made application to Glens Falls Insurance Company, appellee herein, for performance and payment bonds as required by the contracts. To secure the issued bonds totaling more than $600,000, Glens Falls required Milwaukie and the St. Pierres to execute a contract of indemnity. Paragraph four of this contract was as follows:

Milwaukie defaulted upon these construction jobs.

On July 20, 1965, appellee filed an action in the United States District Court for the District of Oregon against Milwaukie and the St. Pierres, appellants herein, asking for specific performance of the above provision of the indemnity agreement. At the time of trial it was admitted that Milwaukie was in default under four construction contracts and that demand had been made upon appellee for performance and payment under each of its bonds.

At the time of trial appellee estimated that it would be obligated to pay approximately $83,000 to the beneficiaries of the bonds, but since…