Park Paving Co. v. Kraft

Citations

• 262 Pa. 178
• 105 A. 39
• 1918 Pa. LEXIS 615

Syllabus

<p>Principal and surety — Execution of bond by surety after principal’s default — Concealment—Fraud—Discharge of surety.</p> <p>1. Where a principal is in default, and the surety executes the bond in ignorance thereof, he will not be bound where knowledge of such default was withheld from him by the obligee; but where the obligee is also ignorant of the default, or where the surety has knowledge of it, the bond is good. Such concealment of a material fact from the surety by the obligee is a fraud upon the surety which vitiates the contract.</p> <p>2. Where a contractor’s bond indicated on its fade that it was given to insure the faithful performance of work thereafter to be done, and not a guaranty of the payment of an existing indebtedness or fixed liability, and, at the time of the execution of the bond by the surety, the contractor was in default, of which the obligee had notice, although the surety was ignorant thereof, good faith required that the real facts should be made known to the surety, and, as this was not done, the bond was void as to the surety.</p>