Hugill agreed to deliver shingles to W. I. Carpenter Lumber Co. and furnished a surety bond to secure the faithful performance of the contract on his part. After a breach of the contract by Hugill, the lumber company brought an action to recover its loss from the surety, Fidelity & Deposit Co. of Maryland. The surety denied liability on the grounds that there was concealment of

(a) the price to be paid for the shingles and

(b) the fact that a material advance had been made to the contractor equal to the amount of the profit that he would make by performing the contract. Decide. [W. I. Carpenter Lumber Co. v Hugill, 270 P 94 (Wash)]

AppendixLO1