Lucy v. Price

39 Iowa 26 | Iowa | 1874

Beck, J.

i contbaotgarnishment, I. It cannot be doubted that a contract of indemnity of the character of the one declared on, if based llPon a sufficient consideration, will support an action. Neither can it be denied that the payment of the judgments, the validity of Avhich were in doubt, constituted a sufficient consideration for the contract of indemnity declared upon. Contracts of this kind are often entered into between parties when the liability of one is a matter of question, and the other is desirous of availing himself of the advantage of the discharge of such liability by the party supposed to be bound. The disadvantage to the first and benefit to the second by the performance of the doubtful obligation, are sufficient to constitute a consideration. Certainly if the party receiving the benefit of the discharge of the supposed obligation be held to admit that it is not in law binding upon the other, he cannot insist that his contract for indemnity is Avithout consideration. This is the precise case made by the petition. The defendants, as the "petition charges, made defense for the plaintiffs in the action wherein recovery Avas had upon the claim setting up the prior judgments upon the garnishment process. They are concluded by the judgment rendered in that case, and are estopped to deny the liability of plaintiffs in that action. It has been held that, in such a case, notice of the pendency of the action will conclude the party bound by the contract of indemnity. Littleton v. Richardson, 34 N. H., 179; Boston v. Worthington, 10 Gray, 496; Chamberlain v. Preble, 11 Allen, 370. And it has been held that in an action upon a covenant to indemnify against claims and suits, the indemnitor, without notice, prima facie, is made "liable by judgment against the principal. Bridgeport Ins. Co. v. Wilson, 34 N. Y., 275; Rapelye v. Prince, 4 Hill, 119; Lee v. Clark, 1 Hill, 53.

___. estoppel. II. If the defendants are concluded by the judgment against plaintiffs in the action to which the judgments in the proceedings by garnishment were pleaded as a defense, they are estopped now to claim that the garnishment was valid, and that plaintiffs were bound thereby. This position cannot be qizestioned. It follows then that defendants cannot in tliis action set up want of consideration to support the contract of indemnity.

These views relieve us of the task of discussing the validity of the garnishment proceeding, and of inquiring into the jurisdiction of the court in that case, which constitute the principal subject considered in the arguments before us.

We conclude that the demurrer was correctly overruled. The judgment of the Circuit Court is

Affirmed.