United States Fidelity & Guaranty Co. v. Bank of Hattiesburg

91 So. 344 | Miss. | 1922

Anderson, J.,

delivered the opinion of the court.

Appellant, United States Fidelity & Guaranty Company, probated its claim for four hundred sixty-one dollars and fifty-one cents against the estate of W. E. Herren, deceased, whose estate was being administered in the chancery court of Forrest county by the appellee, Bank of Hattiesburg, as executor of the will of said decedent. The said claim was contested by the appellee, resulting in a decree disallowing the same, from which decree appellant prosecutes this appeal.

There is no issue of fact involved, only one of law. The case is this: C. O. Eure brought suit in the court of a justice of the peace, and recovered judgment against E. F. Stollenwerck, from which judgment the latter appealed with supersedeas to the circuit court, giving an appeal and supersedeas bond in the sum of five hundred dollars, Avith appellant as sole surety. There was attached to the Avritten application of said judgment debtor, Stollenwerck, made to appellant to become such surety, a contract of indemnity headed “Special Indemnity Agreement,” signed by the testator, Herren, in this language:

“I, the undersigned, hereby agree to indemnify and keep the United States Fidelity & Guaranty Company indemnified and hold and save it harmless from and against any and all demands, liabilities, charges and expenses of whatsoever kind or nature, which it may at any time sustain or incur by reason of or in consequence of having executed the above described bond, and I do further guarantee that the charges for executing and continuing upon the bond Avill be paid as agreed until the company has been released from liability thereunder.”

The said Herren died between the time of the execution of said agreement and the bringing of this suit. There Avas a trial in the circuit court, resulting in a judgment against Stollenwerck in the sum of six hundred nineteen dollars and thirty-five cents, Avith interest and cost, and against appellant as such surety on said bond in the sum of five hundred dollars, the penalty of the bond. Thereupon both said Stollenwei*ck and appellant appealed said cause to the supreme court, both joining in one appeal bond with supersedeas, with two sureties. On that appeal the judgment of the circuit court was affirmed. The amount of the judgment on affirmance by the supreme court, including interest, damages, and costs, was seven hundred eleven dollars and eleven cents, which, of course, was rendered by said court against said Stollenwerck and appellant as principals, as ivell as against the sureties on their appeal and supersedeas bond. At the time of the taking of said appeal to the supreme court said Stollenwerck deposited with the sureties oh the appeal and supersedeas bond given by him and appellant two hundred and fifty dollars in cash for the purpose of saving said sureties harmless to that extent, in the event of the affirmance of said cause. After its affirmance by the supreme court that deposit was by said sureties applied on said judgment, leaving a balance due thereon of four hundred sixty-one dollars and fifteen cents, which amount appellant paid, and, conceiving that the estate of said Herren had by virtue of said indemnity agreement become liable to reimburse it therefor, probated its claim for that amount against his estate, which, as stated above, was disallowed by the court below.

The contention of appellee is, and the court below so held, that by virtue of the giving of the second appeal and super-sedeas bond, in the appeal from the circuit court to the supreme court, with other sureties than the surety on the first bond, the liability of the estate of said decedent, Herren, on said indemnity agreement was discharged. The principal authority relied on to support this theory is Deposit Co. v. Bowen, 123 Iowa, 356, 98 N. W. 897, 6 L. R. A. (N. S.) 1021. That case involved a question of subrogation against the principal debtor as between two sets of sureties for the same obligation. The court held that a surety on an appeal bond will not upon paying the judgment rendered against the principal be subrogated to the creditor’s remedies against the sureties on a prior bond of the same debtor, in the absence of special circumstances rendering his equities equal or superior to theirs.

If that principle has any application here, we are unable to see it. In the case at bar we have a contest, not between two sets of sureties on separate bonds for the same obligation, but a contest between an indemnitor of a surety on the first appeal bond and such surety, the in-demnitee; the former claiming a discharge of liability on his contract of indemnity because the latter in an effort to avoid liability as such surety joined as principal Avith other sureties in the execution of a second appeal and supersedeas bond. The judgment rendered by the circuit court against the judgment debtor, Stollenwerck, and appellant, his surety, was based on the identical cause of action which Avas superseded by the first bond. Thereupon the appellant, as to the sureties on the second bond, became with said Stollenwerck a principal judgment debtor, and primarily liable. It is true that as to Stollenwerck, the principal judgment debtor, appellant never occupied any other relation except that of surety. The question is, as such surety, Avhat did appellant do Avhich under the law had the effect to discharge its indemnitor, ITerren? We think nothing. There is nothing in the record in this case tending in the least to show that appellant was not from beginning to end, in the utmost good faith, seeking to save itself and thereby save the appellee from loss as such indemnitor. The judgment rendered by the supreme court Avas based on the same cause of action that was superseded by each of said bonds, on the first of which appellant, as shown above, was surety, and on the second one of the principals.

Appellee contends further that appellant did not make out its case because it failed to establish that payment of the judgment in question could not have been enforced against the principal debtor, Stollenwerck. The solution of this question depends on the character of obligation entered into by the said decedent, Herren. It is beaded, “Special Indemnity Agreement,” and provided in substance that Herren would indemnify and save harmless appellant as such surety from and against all demands, liabilities, charges, and expenses whatsoever incurred by appellant by virtue of its suretyship. Contracts of indemnity are distinguished from contracts of guaranty and suretyship, in that in indemnity contracts the agreement is to make good and save another from loss upon some obligation which the indemnitee has incurred or is about to incur to a third person, and it is not, as in a case of guaranty and suretyship, a promise to one to whom another is responsible. 22 Cyc. 80. Clearly, therefore, this is an indemnity contract. And in the absence of any express agreement it was not a condition precedent to recovery that appellant, indemnitee, should have first sought reimbursement for the loss sustained from the principal debtor, Stollenwerck. 22 Cyc. 102.

The final judgment against appellant and its discharge by it was all that appellant was required to allege and prove to make out its case.

Reversed, and judgment here for appellant.

Reversed.