The Federal Reporter with Key-Number Annotations, Volume 256: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, May-July, 1919. Page: 80
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256 FEDERAL REPORTER
only the giving of a written notice was to have the effect of excepting
an unexpired scheduled bond from the reinsurance obligation express-
ed. It was not stipulated that the fact that a default of the principal
was known to the original surety was to have that effect. It seems that
compliance with the other provision, whereby the original surety agreed
"that there was no known default * * * upon any of said bonds
and policies by any officer of the Empire State Surety Company lo-
cated as aforesaid," was not made a condition precedent to the taking
effect of the reinsurance obligation, and that that provision was an
independent covenant, for a breach of which the covenantee would have
an action for damages; that covenantee as the reinsurer remaining
subject to the obligation imposed upon it by the contract.
 But, though the provision be treated as having the effect of ex-
cepting from the reinsurance agreement an unexpired bond, a default
of the principal on which was known to an officer of the original surety
at or prior to the time when the reinsurance became effective, it did
not, under the evidence adduced, have that effect with reference to the
bond in question. What is relied on to prove that, prior to August 22,
1912, the officers of the original surety knew of a default of the prin-
cipal, is that, prior to that date, they were advised by a communication
from the office of the United States supervising architect at Washing-
ton that the contract for the building of the post office would not be
completed until about February 1, 1913. Knowledge of that fact, by
itself, did not amount to knowledge of a default by the contractors.
The contract provided that the work agreed to be performed "shall be
completed in all its parts by July 1, 1912," and "that time is and shall
be considered as of the essence of the contract on the part of" the
contractors. But it contained, also, the following provision:
"It is further covenanted and agreed that the United States shall have the
right of suspending the whole or any part of the work herein contracted to
be done, whenever in the opinion of the supervising architect it may be neces-
sary for the purposes or advantage of the work, and upon such occasion or oc-
casions the contractor shall, without expense to the United States properly
cover over, secure, and protect such of the work as may be liable to sustain
injury from the weather, or otherwise; and for all such suspensions the con-
tractor shall be allowed one day additional to the time herein stated for each
and every day of such delay so caused in the completion of the work, the same
to be ascertained by the supervising architect; and a similar allowance for
extra time will be made for such other delays as the supervising architect may
find to have been caused by the United States, provided that a written claim
therefor is presented by the contractor within 10 days of the occurrence of
The contractors were not put in default by the noncompletion of the
work by July 1, 1912, if the delay was caused and allowance for it made
as provided for in the clause just quoted. One who knew only that the
work was not completed by July 1, 1912, but did not know whether
the delay was or was not such as the contractors had become entitled
to in pursuance of the contract, cannot properly be said to have
known that the contractors were in default. There was no evidence
tending to prove that, at the time the reinsurance agreement was
entered into or "prior to August 22, 1912, at 4 o'clock p. m.," any officer
of the Empire State Surety Company knew whether the contractors
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The Federal Reporter with Key-Number Annotations, Volume 256: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, May-July, 1919., legislative document, 1919; Saint Paul, Minnesota. (digital.library.unt.edu/ark:/67531/metadc38827/m1/94/: accessed September 24, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.