Kennedy v. National Surety Co.

This is an appeal by the defendant National Surety Company from a judgment for $4,117.09 in favor of plaintiffs and against all defendants.

The action was brought by R. J. Kennedy and J. F. Alexander, partners under the fictitious firm name of Wilshire Plumbing Company, to recover a balance due them for labor and material furnished by them under a subcontract to Whiting, Boynton & Potts, appellant’s co-defendants in the case, who had the contract for the erection of an apartment building on a lot owned by one Grussie Starling. Subsequent to the making of the general contract the contractors applied to the National Surety Company for a labor and material bond under section 1183 of the Code of Civil Procedure, and were advised by the representative of such com pany that because of the insufficient financing of the project the company could not write a bond unless they had a release or waiver to cover the difference between the cost of the building and the amount of the first mortgage thereon. The general contractors secured a waiver from plaintiffs in the following language:

Such waiver was delivered to the surety company and thereafter, on the eighth day of January, 1926, the…