Commonwealth v. City Trust Safe Deposit & Surety Co.

Citations

• 224 Pa. 223
• 73 A. 425
• 1909 Pa. LEXIS 761

Syllabus

<p>Principal and surety — Bond—Federal building contract — Voluntary payments.</p> <p>Where a surety on a bond given in pursuance of the act of congress to secure “payment to all persons supplying labor and materials” to a contractor in the erection of a public building, voluntarily pays a judgment obtained against it by a material man, and also an uncontested account, and subsequently another subcontractor establishes a claim which together with the amounts paid exceeds the penal sum of the bond, the surety will not be liable to such subcontractor merely for the difference between the amounts previously paid to other creditors and the penal sum, but its liability will be determined by ascertaining the per centum the creditors would be entitled to on an equal distribution among all, even if the result is a payment by the surety of an aggregate in excess of the penal sum of the bond. In such a case the surety company could have protected itself by restraining execution on the judgment, and by refusing to pay the uncontested claims, until the claim of the subcontractor of which the surety had knowledge, was adjusted.</p>