Independence Indemnity Co. v. Grants Pass & Josephine Bank

Some months prior to February 19, 1927, tbe Oregon Construction Company entered into contracts with tbe eities of Grants Pass and Klamath Falls, in tbe state of Oregon, for tbe construction and laying of sewer systems for tbe two cities, and tbe Independence Indemnity Company executed surety bonds on behalf of tbe contractor for tbe faithful performance of these contracts. Tbe bonds were executed by tbe indemnity company through Brownell-Slocum Insurance Agency, Inc., general agent for tbe indemnity company for tbe state of Oregon. Tbe Grants Pass & Josephine Bank, of Grants Pass, advanced to tbe contractor tbe sum of $6,000 which was expended in the performance of tbe contracts, and took as security for tbe loan assignments of moneys to become due tbe contractor from tbe cities as work under tbe contracts progressed. On tbe above date, tbe contractor was in need of further funds for tbe prosecution of tbe work and applied to tbe bank for an additional loan, which tbg bank declined to make. Thereupon, H. C. Leigh, president of the Brownell-Sloeum Insurance Agency, and the officer in charge of its affairs, visited Grants Pass, and as a result of this visit tbe *84 bank advanced…