A stipulation that a judgment against the person indemnified shall be conclusive upon the person indemnifying, is inapplicable, unless a contrary intention appears, if the person indemnified had a good defense upon the merits, which, by want of ordinary care, he failed to establish in the action.

Source: SDC 1939, § 31.3107 (7); repealed SL 1966, ch 111 , § 5; re - enacted SL 1967, ch 235 , § 7 (7).