S. A. Lindstrom Co. v. Pennsylvania National Mutual Casualty Insurance Co.

DOWLING, J.,

Is a surety discharged of its obligation under a payment bond when its principal, the general contractor, has paid a subcontractor who has failed to pay its subcontractor?

This case reaches us on stipulated facts which are as follows:

Defendant, Pennsylvania National Mutual Casualty Insurance Company, as surety, executed a payment bond in the principal sum of $3,286,591 with Susquehanna Valley Construction Corporation as principal. The payment bond related to a project involving the construction of the 63d Street Bridge in Swatara Township, Dauphin County. Susquehanna was the…