Bowden

In September, 1951 the United States entered into a contract with appellant Twaits-Morrison-Knudsen-Macco, a joint venture, 1 (hereinafter the “prime contractor”), whereby the latter was to furnish the materials and perform the work for constructing launching facilities, utilities, and roads at the Navy Air Missile Test Center, Point Mugu, California. The initial contract amount, before change orders, was $3,661,000.00 and the prime contractor furnished a payment bond, with appellant Fidelity & Deposit Company of Maryland as one of the sureties thereon, in the sum of $1,464,400.00. 2 Under a subcontract, Frank T. Hickey, Inc., (hereinafter “Hickey”), performed a part of the work required of the prime' contractor under its contract with the United States, i. e., grading, excavation, and filling. In doing such work, Hickey used earth moving and excavating equipment which it rented from appellee Mal-loy. Hickey began work on the Point Mugu job in September, 1951, and used Malloy’s equipment from a date soon thereafter and until a very few days before the work under the subcontract was. completed on October 31, 1952.

Hickey’s arrangement with Malloy provided that payment of rental…