United States v. Western Casualty And Surety Co.

498 F.2d 335 (9th Cir. 1974)

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Nature of the Case

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Facts

Pacific (D) contracted with Fritz (P) for wallboard on a hospital contract with the United States and Fisher. D was to make progress payments to P within 10 days after he was paid by Fisher. D had agreed to pay P's supplier out of the progress payments. On the third installment, P directed D to pay P the entire amount with none going to his supplier. D withheld the payment until P could show that the supplier would be satisfied. P was unable to meet D's requirement, and payment was withheld. P quit work on the job. D sent the payments to the supplier and completed the work himself. P sued for restitution. The trial court ruled that D's failure to pay was a breach and that P was entitled to rescind. P was awarded restitution. D appealed.