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

On September 28, 1922, the appellant, Cove Irrigation District, a Montana public corporation, entered into a contract with Sehlueter Bros., called the contractor, by the terms of which the contractor was to do the work and furnish the materials necessary for certain improvements in the appellant’s irrigation system. The contract provided that, “in consideration of the contractor doing such work and furnishing such materials and paying for the labor performed and the materials furnished and used therefor,” bonds of the district would be delivered to the contractor from time to time in payment for the work as it progressed. Pursuant to a requirement that the contractor furnish a surety bond in the sum of $100,000, “conditioned upon the faithful performance of the contract,” such bond was furnished on October 7, 1922, with the contractor as principal and the appellee herein as surety. In the bond reference was made' to the contract and a copy thereof was attached. The condition of the bond was that if the principal should indemnify the obligee against any loss or damage for its failure faithfully to perform the contract and to complete the work within the time specified, and should…