Fidelity and Deposit Company of Maryland v. Scott Brothers Construction Company, Alexander City Bank

GODBOLD, Circuit Judge:

The single issue on appeal of this diversity case involves resolution of the competing claims of a surety and an as-signee bank to contract progress payments made in the form of a check payable to the contractor. The check was deposited with the assignee bank just prior to the contractor’s default and the surety’s undertaking of the contractor’s obligation to complete the construction job. The District Court held that the assignee bank was entitled to prevail over the surety. We affirm.

Scott Bros. Construction Co. (Scott) entered into a contract, bonded by appellant…