New England Equitable Insurance v. Chicago Bonding & Surety Co.

Plaintiff’s assignor, one Carr, entered into a contract with the regents of the University of California to build a class-room at Davis, and sublet the portion of his contract to defendant Macdonald, taking a bond from defendant Surety Company for Macdonald’s faithful performance of his contract. Macdonald abandoned the work, whereupon Carr proceeded to do it himself; but later, becoming financially embarrassed, was unable to finish the work, and the regents took it over, completed the job, and deducted the cost thereof, amounting to $1,409, from the money payable to Carr under his contract. On this state of facts plaintiff had judgment against defendant Surety Company for $750, the full amount of its bond.

But two points are presented on this appeal. The contract provided that in the event that Macdonald should delay the work Carr might prosecute it “if same is not done after three days’ notice.” It is claimed that Carr did not give this notice before proceeding with the work after Macdonald’s abandonment, and that the surety was thereby relieved from liability. As was expressly held by this court in Bacigalupi v. Phoenix Bldg. etc. Co., 14 Cal. App. 632, 639 , [ 112 Pac. 892 ],…