Pacific Automatic Device Co. v. United States Fidelity & Guaranty Co.

On August 2, 1922, the Olympic Products Company, a Washington corporation, as manufacturer, entered into a contract with the Pacific Automatic Device Company, of Portland, an Oregon corporation, as purchaser, for the manufacture and sale of 25,000 automatic *165 windshield swipes to conform to a sample furnished by the purchaser, for which the purchaser agreed to pay the sum of $1.25 each, or $31,250 in all. Other covenants in the contract are not deemed material, aside from an agreement on the part of the manufacturer to furnish a bond in the sum of $31,250 to insure the performance of the contract. August 9,1922, the manufacturer, with the United States Fidelity & Guaranty Company, as surety, entered into a bond in accordance with the foregoing requirement. The bond was in the penal sum of $31,250, conditioned that the manufacturer should well and truly indemnify and save harmless the purchaser from any pecuniary loss resulting from a breach of any of the terms, .covenants, and conditions of the contract on the part of the manufacturer. The bond also contained the usual and customary conditions and provisions, that no liability should attach to the surety unless notice of…