American Surety Co. v. Sandberg

225 F. 150, 1915 U.S. Dist. LEXIS 1233
CourtDistrict Court, W.D. Washington
DecidedJuly 3, 1915
DocketNo. 1605
StatusPublished
Cited by5 cases

This text of 225 F. 150 (American Surety Co. v. Sandberg) is published on Counsel Stack Legal Research, covering District Court, W.D. Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Surety Co. v. Sandberg, 225 F. 150, 1915 U.S. Dist. LEXIS 1233 (W.D. Wash. 1915).

Opinion

CUSHMAN, District Judge.

Plaintiff sues to recover against the defendants on account of an agreement entered into by the defendant Peter Sandberg to indemnify the plaintiff in giving a bond for the ■ performance by the Wells Construction Company of a certain contract for the construction of a dam and canal in British Columbia for the Powell River Paper Company. Plaintiff alleges the bringing of a suit in British Columbia against it upon the bond, that it called upon the defendant Peter Sandberg to defend that action, and that a .judgment was obtained in such action against plaintiff in the sum of $13,632.94. It alleges that, by paragraph 10 of the indemnity agreement, set out below, the defendant Peter Sandberg contracted with • the plaintiff in the prosecution of the business of the community consisting of. the two defendants, and that the community thereby obtained the benefit of the continuance of the business of the Wells Construction Company, and obtained the postponement of payment and discharge of indebtedness of Peter Sandberg and the community estate and business from liability thereon to said Wells Construction Company. Plaintiff asks judgment against Peter Sandberg and Mathilda Sandberg, his wife, to the extent of her interest, whatever it may be, for $25,000 and interest, and the additional sum of $1,449.85 and interest» the latter item on account of plaintiff’s expenses in defending the suit against it in British Columbia.

Defendants, by separate answers, deny that either of. them or the community formed by them was interested in the Wells Construction Company’s contract with the Powell River Paper Company, and aver that Peter Sandberg signed the application for the sole use, benefit, and accommodation of the Wells Construction Company, without consideration to the defendants, or the community, and not in the prosecution of any business of the community. They deny that Peter Sand-berg signed the application'with any understanding for the postponement of payment or discharge of any debt to the Wells Construction Company. Defendants interpose general denials to other portions, of the complaint, and set out the date of their marriage, a description of the community property, and pray for a dismissal of the action, and, in the alternative, that, if judgment be rendered against Peter Sand-berg, it be against him individually, and that it be adjudged that the debt is not an obligation of the community, and that it be adjudged that the defendants’ property described in the answer is community property not subject to the lien of any judgment rendered.

[153]*153Plaintiff, in its reply, denies that the defendant Peter Sandberg signed the application for the accommodation of the Wells Construction Company, and avers that he did so for the benefit and profit of both defendants and the community. Plaintiff sets up the recitals of paragraph 10 of the application as representations of the defendant Peter Sandberg that he liad an interest in the Wells Construction Company’s contract and of the benefit to the defendants of plaintiff’s suretyship, by way of estoppel, and alleges that, at the time Peter Sand-berg signed the application, the defendants were indebted to the Wells Construction Company to the amount sued for herein. Plaintiff further alleges the giving of notice to Peter Sandberg of the bringing of suit against it in British Columbia, in which notice he was called upon to defend that action, and alleges that the judgment obtained in that action is res adjudicata.

11 ] In June, 1910, the Wells Construction Company applied to plaintiff for a surety bond in the amount of $25,000. The application was denied for want of indemnitors. Thereafter, on the 20th of June of the same year, another application was made, signed by the Wells Con,si ruction Company and, among other indemnitors, the defendant Peter Sandberg. This application contained the following provisions:

“IV. That the indemnitor will perform all the conditions of said bond, and any and all renewals and extensions thereof, on the part of the indemnitor to be performed, and will at all times indemnify and save the surety harmless from and against every claim, demand, liability, cost, charge, counsel fee (including fees of special counsel whenever by the surety deemed necessary), expense, suit, order, judgment, and adjudication whatsoever, and will place the surety in funds to meet every such claim, demand, liability, cost, charge, counsel foe, expense, suit, order, judgment, or adjudication against it by reason of such suretyship, and any and all renewals and extensions thereof, and before it shall be required to pay the same. * - *
“Vi. That in the event of the surety deeming it advisable, or of the indemnitor requesting the surety, to prosecute or defend or fake part in any action, suit or proi ceding, appeal or writ of error, the indemnitor will, on being advised of the surety’s intent so to do, or on making such request, place the surety in possession of funds or securities, approved by it, sufficient to defray any costs, charges, or expenses which it may incur in so doing, and to discharge any liability, order, judgment, or adjudication which may result therefrom, or from its said suretyship. The indemnitor will not ask or require the surety to remove, or join in any application for the removal of, any action or proceeding from the state court to the federal court, in any state where such action would in any way affect the surety’s license- or right to transact business. * * *
■TX. That, should any claim or demand be.made upon the surety by reason of such suretyship, the surety shall be at liberty to pay or compromise the same, and the voucher or other evidence of payment, compromise, or settlement'of any claim, demand, liability, cost, charge, expense, suit, order, judgment, or adjudication by reason of such suretyship, shall be prima, facie evidence of the fact and of the extent of the ipdenmitor’s liability therefor to the surety.
"X. That the surety also looks to and relies upon the property of the indemnitor, and the income and earnings thereof, and shall also at all times have the right to rely upon, look to, and follow and recover out of the property which 1he indemnitor now has or may hereafter have, and the income and earnings thereof, for anything due or to become due it, the surety, under this agreement, such suretyship having been by the surety entered into for the special benefit of tlie indemnitor and the special benefit and protection of the indemnitor’s property, its income and earnings; the indemnitor being substantially and. [154]*154beneficially interested in. tbe award and performance of sucb contract and obtaining such suretyship.”

This application was upon a printed form, evidently prepared by the plaintiff. Upon this application, plaintiff executed its bond in the sum of $25,000 to the Powell River Paper Company, conditioned for the indemnifying of that company against any failure on tiré part of the Wells Construction Company to perform its contract. The evidence introduced shows that the defendants were married in 1894; that all of the real property described in their answers is community property. In view of the terms of paragraph VI of the application above set out, it is not necessary for the plaintiff to prove that it has paid or satisfied the judgment obtained against it in order to prevail.

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Cite This Page — Counsel Stack

Bluebook (online)
225 F. 150, 1915 U.S. Dist. LEXIS 1233, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-surety-co-v-sandberg-wawd-1915.