
    No. 894
    STATE ex. v. SCHLESINGER, Dir. of Highways, etc.
    No. 19346.
    Supreme Court
    In mandamus. Dock.
    Sept. 1, 1925;
    3 Abs. 546.
    1140. SURETY—Where principal on surety bond makes assignment to bank and subsequently defaults in performance of contract, is surety subrogated to such fund, to the extent of the work accomplished by reason of completing the contract?
   On Jan. 9, 1923, the State of Ohio by Leon C. Herrick, the then Director of Highways and Public Works, entered into a contract with John Walsh and Charles McDaniel, operating under the firm name and style of Walsh & McDaniel, for the construction of Sec. “K”, ICH No. 23, in Licking and Knox counties. The Southern Surety Co. executed the bond securing the performance 'of the foregoing contract, as surety.

During the progress of the work, Walsh & McDaniel made an assignment of estimates due, to the Huntington National Bank of Columbus. Before completion of the work, and after making the assignment to the bank, Walsh & McDaniel defaulted on their contract, and the Southern Surety Co., after notice from the Director of Highways and Public Works, entered upon and completed the contract. The Southern Surety Company now claims all of the money due fro-m the State of Ohio to Walsh & McDaniel by reason of subrogation, and that its rights to said fund are paramount to the rights of the bank under its assignment from Walsh & McDaniel. The Huntington National Bank claims that it is entitled to the funds, by reason of its assignment.

Attorneys—Atkinson, Smith & Hogan and Frank Cipriano for Surety Co., C. C. Crabbe and J. C. Williamson for Director; all of Columbus.  