This section contains the nature of the case and procedural background.

Omaha (P) is a public utility and hired an independent contractor to dismantle certain power lines in order to replace them. P executed a formal contract with Kirby under an agreement that provided for the removal of ten miles of power lines and paying P $2,500 for the salvage rights. Kirby was required to obtain a performance bond for completion of the work, liability insurance and workmen's compensation insurance acceptable under the law of Nebraska. Kirby got his performance bond from Employer's Fire Insurance (D). Kirby then informed P that it was unable to pay the $2,500 as it was facing bankruptcy from a loss resulting from an accident to an employee on another job and could not maintain the insurance required. P then demanded D to undertake Kirby's performance. D declined, and P accepted the lowest bid of $18,500 and advised D reimbursement would be sought. P sued D. D claimed that the condition precedent to the contract never was performed as Kirby failed to procure the requisite insurance. The trial court agreed and dismissed the case. P appealed.

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