American Surety Co. of New York v. Cove Irr. Dist.

The surety company asks reversal of a judgment for $4,-877.99, rendered against it in an action brought by the irrigation district upon a surety bond.

On September 28, 1922, the Cove irrigation district, organized under the laws of Montana, entered into a contract with Schlueter Bros., contractors, for the construction of certain irrigation works. Contractors agreed to do the work specified and to pay the district $60,000 in cash for the purpose of enabling the irrigation district to meet its outstanding obligations, and to accept in payment therefor bonds of the district of the par value of $279,000, bonds to be delivered to the contractors as the work progressed, and upon delivery of the bonds “accrued interest thereon shall be paid by the contractor to the district; * * * it being expressly understood and agreed that all accrued interest on such bonds at date of delivery shall be then paid by the contractor to the district.” The surety company wrote the contract bond for the faithful performance of the work by the contractors. The bonds were printed, and' provided that the interest should be paid semiannually on the 1st days of January and July upon presentation and surrender…