Associated Oil Co. v. Commary-Peterson Co.

The facts are undisputed and we may adopt substantially respondent’s statement of them. About June 9, 1914, the Commary-Peterson Company, hereinafter referred to as the contractor, entered into a contract with the state of California for the construction of a portion of the state highway in Solano County. In compliance with law, the contractor, as principal, and the defendant, New England Casualty Company, as surety, filed a bond with the department of engineering, the condition being that if the contractor shall pay or satisfactorily secure “the payment of all labor, materials, and supplies furnished for constructing under the said contract the said portion of said highway, as in said contract stipulated, and as required by the provisions of the act of the legislature of the state of California,, approved March 27, 1897, entitled ‘An Act to secure the payment of claims of material men, mechanics or laborers employed by contractors on state, municipal or other public work, ’ and the acts amendatory thereof, then said bond shall have no effect, but that otherwise it shall remain in full force and virtue. ’ ’

On June 25, 1914, the contractor entered into an agreement with…