Cochran v. Selling

59 P. 329 | Or. | 1899

Mr. Justice Bean,

after stating the facts, delivered the opinion of the court.

There is but one question involved in this appeal, and that is whether the contract of October 16,1894, between Moyer & Company and Cochran, is a contract of indemnity against liability on account of the debts of the Albany Woolen Mills Company, or against the payment of such debts. If the former, action could be brought and recovery had as soon as the liability was legally imposed, and the claim as presented would necessarily have to be allowed. If the latter, there was no breach of the obligation until Cochran was compelled to and did pay such debts, and the judgment of the court below must be affirmed : Fenton v. Fidelity & Casualty Co. 36 Or. 283 (56 Pac. 1096, — L. R. A. —). This question must be determined from the language of the contract, and it seems to us it is not susceptible of the construction that it is a contract to indemnify against liability. Cochran was already liable, and it was designed to save him harmless against the consequence of such liability. The express stipulation is that Moyer & Company will save him harmless “against the payment of any and all claims and demands” whatever against the Albany Woolen Mills Company for which he was personally liable. But they did not agree to pay or discharge such debts or obligations, nor did they assume the payment thereof. They simply agreed to reimburse Cochran for any moneys that he might be compelled to pay on account of such indebtedness. Upon such a contract it is clear that the obligee has no cause of action against the obligor until he has paid the liability specified : 10 Am. & Eng. Enc.Law (1 ed.), 413. And therefore the judgment of the court below must be affirmed, and it is so ordered. Affirmed.