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Principal And Surety- Right Of Surety On Building Contract To Be Subrogated To Funds In Owner's Hands As Against Right Of Bank That Advanced Funds To Contractor, Mary Jane Morris

Michigan Law Review

A contract for construction of a city sewerage system provided for progress payments on the fifteenth of each month of ninety per cent of the engineer's estimate of work done during the preceeding month, ten per cent being retained by the owner until final completion of the contract. The contract also required the contractor by the twentieth of the month to pay all labor costs and ninety per cent of the cost of materials delivered the month before. Because the necessary estimates had not been made, the June check was not paid to the contractor on the payment date. On …