Maryland Casualty Co. v. Washington National Bank

Citations

• 92 Wash. 497
• 159 P. 689
• 1916 Wash. LEXIS 779

Syllabus

<p>Highways — Construction—Contracts—Reserve Fund — Yaridity. A provision in a state road contract reserving twenty per cent of the contract price for the protection of creditors, exacted by the commissioners, is binding on the surety .and the county, although not required by statute, where not forbidden by Rem. 1915 Code, § 5879-9, under which the road was built.</p> <p>Same — Contracts—Reserve Fund — Parties Entitled — Surety— Subrogation. Where road building contracts provide a twenty per cent reserve fund for the payment of laborers and materialmen, the surety on the contractor’s bond may prevent dissipation of the fund and is entitled to be subrogated to the rights of creditors after paying their claims.</p> <p>Same — Contracts—Reserve Fund — Parties Entitled — Equity— Priority. A hank, having loaned money to a road building contractor on assignments of all payments or warrants that may be due him, is not entitled to equities in the twenty per cent reserve fund intended for the protection of creditors, as against the surety on the contractor’s bond who paid off the creditor’s claims on the contractor’s default, where the bank failed to trace the moneys loaned to any retired claims; since the surety’s equity has the priority.</p> <p>Same — Contracts—Reserve Fund — Loss—Liability of County. Under road building contracts, which, by statute, were projected and made by the county, and approved and paid for by the state upon attested county vouchers, it is the duty of the county to preserve the twenty per cent reserve as a fund for the protection of creditors and the contractor’s surety paying creditor’s claims; and it is liable for the loss of the fund by delivering state warrants to the contractor’s assignee after receiving notice of the contractor’s default and the surety’s payment of claims against the fund.</p> <p>Same — Contracts—Reserve Fund — Actions—Judgment Against Surety. Where a road building contractor’s surety seeks an equity in the twenty per cent rese