91 N.Y.S. 1022 | N.Y. App. Div. | 1905
The plaintiff is a corporation organized under the laws of the State of Pennsylvania. The defendant Haaslocher is the president of an unincorporated association, having an office for the transaction of its business in the-city of New York; and the defendant, the brewing company, is a domestic corporation organized under the laws of the State of New York. The complaint alleges that the Brewers’ Indemnity Fund Association was formed for the purpose of undertaking the. defense of all actions against the members thereof, in the trial and appellate courts, at its own proper cost and expense, and to pay and satisfy judgments obtained against the members of said association, and save the members thereof harmless from any judgments therein, and any costs and expenses, and relieving the members of said association from all loss suffered through claims made or actions brought to recover damages on account of personal injuries to other parties claimed to be caused by
The complaint further alléges the payment of counsel fees and disbursements by the plaintiff in procuring the order for a new trial, the recovery of a judgment against tile brewing company for the amount expended by the' plaintiff, the issuance of an execution and its return unsatisfied; that the plaintiff herein, upon the facts . set forth, and because of the issuance of its undertaking oil appeal as aforesaid “ at the special instance and request of said The Brewers’ Indemnity Fund Association, became subrogated to the rights and claims of said Leibenger & Oehm Brewing Company against said The Brewers’ Indemnity Fund Association to recover from said Association. damages suffered by said Brewing Company in consequence of the failure of said Indemnity Association to do and perform its said contract and agreement and to indemnify the said Brewing Company against said judgment and to prosecute said appeal to the extent of said expenses so incurred and paid by the plaintiff, to wit, the sum of $5,146.66; and the said The Brewers’ Indemnity Fund Association became and is liable and indebted to this plaintiff fpr all of the said expenses as aforesaid, amounting to the said sum, of $5,146.66^ with interest from the 8th .day of June, 1899.” The plaintiff demands judgment against the defendant as president of the Brewers’ Indemnity Fund Association for that sum, with interest and costs. The ground of the demurrer was that the complaint did not state facts sufficient to constitute, a cause of action.
Upon this appeal it is not necessary to determine the extent of the recovery to which the plaintiff would be' entitled. • If upon the facts pleaded the plaintiff would be entitled to any judgment the demurrer should not have kbeen sustained. The indemnity association was on the 7th day of April, 1897, liable to pay the judgment that had been -obtained against the brewing company. It had recognized its obligation by undertaking the defense of the action against the brewing company; employing counsel to try the case and when defeated upon the trial by appealing from the judgment. Upon the entry of the judgment against the brewing company the indemnity association. became bound to pay that judgment, and to secure a stay of the proceedings to enforce the judgment which it would have been obliged to pay, it requested .the brewing company to apply for and
The plaintiff’s, position upon these facts was strictly that of a surety who occupied that position at the request and special instance of the indemnity association to protect it from the enforcement of the judgment for which it was liable pending the appeal. The giving of the undertaking by the plaintiff was directly for the benefit of the indemnity association and was issued at its request and special instance, and the result of the giving of the bond and the efforts of the plaintiff was to reduce the liability of the indemnity association from the amount of the judgment to $250, which was finally paid in settlement of the claim. Upon these allegations the plaintiff was in no sense a volunteer.
It is alleged that it executed the undertaking at the request and special instance of the indemnity association, and whether that request was directly to the plaintiff or to the plaintiff through the principal debtor, the brewing company, seems to me to be immaterial. The undertaking was in fact executed for the benefit of the indem-' nity association and at its request and special instance. If the plaintiff had been compelled to pay the whole amount of this judgment the indemnity association would have been liable to repay to the plaintiff the- amount that it had paid to discharge the judgment. Whether ór not the indemnity association would be responsible for counsel fees paid by the plaintiff in procuring the new trial, we are not now required to determine; but I entertain no doubt but that upon these facts- the indemnity association was liable to the plaintiff for the amount that it paid upon the settlement of the claim, provided that' it be found as a fact that such settlement was a reasonable one for the surety to make and was made in good faith and for the benefit of the principal.
The principle of “ equitable subrogation ” is of extensive application. In Cuyler v. Ensworth (6 Paige, 32) it was held that “ the surety, by the mere payment of the debt, and without any actual assignment from the creditor, is in equity subrogated to all the rights and remedies of the creditor, for the recovery of his debt against the principal debtor or his property, or against the oo-sure
It follows that a cause- of action was alleged, and the judgment should be reversed, with costs,’and the demurrer overruled, with costs, with leave to the' defendant Haasloclier to withdraw the
McLaughlin and Laughlin, JJ., concurred; Van Brunt, P. J., and Patterson, J., dissented.
Judgment reversed, with costs, and demurrer overruled, with costs, with leave to the defendant Haaslocher to withdraw demurrer and to answer on payment of costs in this court and in the court below.