Colusa-Glenn Production Credit Ass'n v. Phoenix Insurance

This is an action under 28 -U.S.C. § 1335 by the holder of certain funds, amounting to $12,411.40 and now deposited 'in the registry of this Court, for a determination of the respective rights in that sum of the United States and a surety, the Phoenix Insurance Company of Hartford, Connecticut.

The surety issued its bond to guarantee the performance of a building contract by. one B.erlinger,. a contractor. *845 The other party to' the contract was the Colusa-Glenn Production’ Credit Association, hereinafter called owner. The bond was executed on November 21, 1953, and the building' contract on' November 27, 1953. ' The contract’provided for the usual ten per cent withholding provision until' completion of the entire job, and for progress payments upon architects’ certificates only. The contract further provided that time' was' of the essence and that the building was to be completed by May 24,1954.

Pursuant to this contract, the owner paid to. the contractor approximately $46,000 prior to June 1, 1954. On that date, the contractor was in default in several respects, including the time provision in the contract. The government filed a notice of tax lien upon the owner on June 1,…