National Surety Co. v. Love

182 N.W. 490, 105 Neb. 855, 1921 Neb. LEXIS 127
CourtNebraska Supreme Court
DecidedMarch 25, 1921
DocketNo. 21086
StatusPublished
Cited by5 cases

This text of 182 N.W. 490 (National Surety Co. v. Love) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Surety Co. v. Love, 182 N.W. 490, 105 Neb. 855, 1921 Neb. LEXIS 127 (Neb. 1921).

Opinion

Dorsey, 0.

In National Surety Co. v. Love, ante, p. 38, the judgment of the court below dismissing the -appellant’s action was affirmed and the case is now before us on rehearing.

The circumstances out of which this case arose transpired in Oregon where the appellee formerly resided. He had loaned $1,000 to one A1 Crystal and sued the latter to recover that sum in the circuit court for Klamath county, Oregon. Desiring to attach Crystal’s property in that action, the appellee filed an attachment bond and procured the appellant to become his surety thereon. This bond provided that the appellee, Love, as plaintiff, and the appellant, as surety, “undertake to pay all costs that may be adjudged to the defendant (Crystal), and all damages which he may sustain by reason of such attachment, if the same be wrongfully or without sufficient cause,” etc. Preliminary to the execution of this bond, the appellee signed a written application to the defendant asking it to become his surety, in which there was a clause whereby the appellee agreed to indemnify the appellant “and save it harmless from and against all claims, demands, costs, liabilities, charges and expenses * * * which it should at any time sustain or incur and as well from all * * * judgments * * * against it by reason or in consequence of having executed said bond.”

Crystal’s property was attached, but before the case was tried the money for which he had sued Crystal was paid to the appellee and the action was dismissed. Thereafter the appellee removed from Oregon to Sioux county, Nebraska. After his departure, Crystal brought suit upon the attachment bond for alleged wrongful attachment, making the appellee and the appellant surety company defendants. The appellee, being then a nonresident of Oregon, was not served with process or otherwise notified of the suit, but the appellant was served and the case proceeded to judgment against it for $500. Having paid the judgment, the appellant brought this suit to recover therefor, and for incidental costs and expenses, in the district [857]*857court for Sioux county, Nebraska. The appellee defended on the ground that he had not been notified of the action in Oregon and had had no opportunity to defend there, and also that, by arrangement between his attorney in the attachment suit and Crystal’s attorney, there had been a complete settlement and a release of all liability on his part to Crystal, which was evidenced by the order of dismissal entered by the Oregon court in that action.

The decisive point in the instant case is whether the judgment rendered against the appellant in the action for wrongful attachment in Oregon was conclusive upon the appellee under the terms of the indemnity agreement, above quoted from, or whether the appellee, not having-been served with process or otherwise notified, might still urge the defense of settlement and discharge from liability. In affirming the judgment of the court below the rule was announced, in the former opinion of this court, that such judgment was not conclusive upon an indemnitor under those circumstances, and the correctness of that rule is vigorously challenged by the appellant on the ground that it is in conflict with the decision of this court in Pasewalk v. Bollman, 29 Neb. 519.

We are nevertheless of the opinion that the case referred to is not at variance with the general rule stated in the former opinion in the instant case, to the effect that a judgment against an indemnitee is not conclusive upon his indemnitor who has had no notice of the suit in which the judgment was rendered. In that case a sheriff was sued for conversion and judgment was recovered against him by the owner of personal property which the sheriff had wrongfully taken in execution upon a judgment against a third party. Previous to levying this execution, the sheriff obtained from the execution creditor a bond indemnifying him against the consequences of a wrongful levy. When the action for conversion was commenced, the sheriff notified the execution creditor, who had given him the indemnity bond, and the latter appeared and defended for the sheriff. After judgment went against [858]*858the sheriff, he brought suit on the indemnity bond to recover the amount he had been compelled to pay to satisfy the judgment. It appears, however, that the execution creditor, in whose behalf the indemnity bond had been given to the sheriff, had not signed it, but it‘was signed only by certain sureties; so, in bringing his action on the indemnity bond, the sheriff sued only the sureties. It was, in reality, therefore, an action by an indemnitee against sureties of an indemnitor, upon an obligation of indemnity which the principal had not signed, to recover for damage which had been adjudicated in an action of which the principal indemnitor had full notice and in which he appeared and defended for the indemnitee.

The question in Pasewalk v. Bollman, supra, was whether or not, under the circumstances just detailed, the judgment in the conversion action was conclusive upon the-sureties, who had had no notice of the pendency of that action, but whose principal had been notified of it and had appeared and defended in it. The point actually decided by this court in that case was, in the language of the opinion (p. 527) : “The judgment recovered against the officer is conclusive against the sureties, although they had no notice of the pendency of the action in which the judgment was obtained, when it is shown that their principal defended the suit for the officer.”

In the case at bar, however, the appellant Avas the surety on the attachment bond; the appellee was the principal obligor in that bond, and he had no notice of the action thereon for Avrqngful attachment and did not appear and defend therein. Here it is a question of the binding force upon a principal of a judgment against which the surety appeared and defended, while in Pasewalk v. Bollman, supra, the situation was the exact reverse.

The precise situation in the instant case, briefly stated, is that the appellant surety company, at the appellee’s request, had contracted to indemnify Crystal against any damages that he might sustain by reason of the attachment if it turned out to be wrongful, and the appellee had [859]*859contracted to indemnify the appellant against any liability that it might be subjected to in consequence of having indemnified Crystal. The attachment bond executed by the appellant was not conditioned to indemnify Crystal against such damages as he might recover in an action against the appellee; if it had been so conditioned, the law might have required the appellee to be joined in the action on the bond for wrongful attachment, and that judgment be recovered against him in that action, or in an independent action, as a condition precedent to the appellant being held liable as surety on the bond. But the condition of the attachment bond in this case was not thus restricted; it was that Crystal should be indemnified against such damages as he might sustain, and therefore Crystal was privileged to bring suit on the bond against the appellant alone, as surety on the bond, and to recover judgment thereon for such damages as resulted from the attachment, if he could prove it was wrongful, without making the appellee, the principal in the bond, a party defendant. 6 C. J. 509, see. 1211. Especially would this be true if, as was the case here, the appellee had removed from the jurisdiction of the Oregon courts.

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Cite This Page — Counsel Stack

Bluebook (online)
182 N.W. 490, 105 Neb. 855, 1921 Neb. LEXIS 127, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-surety-co-v-love-neb-1921.