Union Paving Co. v. United States ex rel. Soule Steel Co.

On November 4, 1939, a contract was awarded to Union Paving Company, hereafter called Union, for the construction of public work of the United States, namely, abutments and piers for a bridge over the Pit River in California. The work was more particularly described in specifications which were part of the contract. The contract was to be performed and executed in the Northern District of California. The total amount payable by the terms of the contract was $1,138,288. Before the contract was awarded, Union furnished to the United States, for the protection of persons supplying labor and material in the prosecution of the work, a payment bond in the sum of $455,315.20 (40% of $1,138,288), as required by § 1 of the Act of August 24, 1935, c. 642, 49 Stat. 793 , 40 U.S.C.A. § 270a. Sureties on the bond were Pacific Indemnity Company and Maryland Casualty Company. On January 6, 1940, Union made a subcontract with Soule Steel Company, hereafter called Soule, whereby Soule agreed to do a part of the work — ■ the part described in the subcontract. The subcontract provided:

“The subcontractor [Soule] at its own cost agrees to provide all labor, materials, tools and equipment or other…