Whitty

The Callahan Construction Company was at all times material to this action a corporation engaged in the business of highway construction. About July 1, 1928, it obtained a contract from the state of California whereby it agreed to construct about eleven miles of the state highway in Placer and Nevada Counties. It posted a contractor’s bond pursuant to the provisions of the 1925 Statutes of California (chap. 321, at p. 538), with Fidelity and Deposit Company of Maryland, a corporation, as surety thereon. On September 6, 1929, The Callahan Construction Company entered into a subcontract with the plaintiffs whereby they agreed to construct about one mile of the improvements described in the contract with the state, at a compensation based upon unit prices specified in the subcontract. By the terms of this instrument The Callahan Construction Company agreed to rent to plaintiffs, for use in performing their subcontract, a Northwestern power shovel at a rental of $500 for each calendar month. By the terms of both contracts it was provided that the improvement be completed “before the close down of operations in 1929”. It was agreed by all parties that this phrase meant the prevention…