213 F. 908 | W.D. Wash. | 1914
A petition has been filed by the trustee and general creditors for a review of the order of the referee granting priority of payment to the assignee of claims of workmen over the general creditors. Prior to June 8, 1911, the bankrupt was engaged in grading certain streets in Aberdeen, Wash., under a con
“A surety who has paid the debt of the principal is at once subrogated to all the rights, remedies, securities, liens, and equities of the creditor, for the purpose of obtaining reimbursement from the principal debtor.” 37 Cyc. 402.
The authorities cited by petitioners in this connection are to the effect that the surety on a bond such as the one here in question is liable primarily, not only to the city, but to the workmen. U. S. v. Rundle, 100 Fed. 402, 403, 40 C. C. A. 450; U. S. Fidelity & Guaranty Co. v. Omaha Bonding, etc., Co., 116 Fed. 145, 53 C. C. A. 465; U. S., etc., v. National Surety Co., 92 Fed. 549, 34 C. C. A. 526; United Surety Co. v. Iowa Manf. Co., 179 Fed. 55, 102 C. C. A. 623; U. S. v. Kimpland (C. C.) 93 Fed. 403. This merely makes the question the same as if the workmen were the obligees in the bond instead of the city. It does not change the principle involved. While the obligation as to the workmen is primary, yet, as between the principal and the surety, the liability of the surety is collateral. 'The rule stated in 37 Cyc. 374, to the effect that there is no right of subrogation where the obligation discharged is a primary one, has reference to an obligation primary, not only as between the person to whom it is paid and the person pay
The doctrine of subrogation is recognized in section 57i of the Bankruptcy Act and General Orders in Bankruptcy, XX (4), providing for proof of the claim of a person contingently liable and his subrogation to the rights of a creditor.
An order may be presented confirming the decision of the referee.