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American Surety Co. v. Thurber

56 N.Y. Super. Ct. 338 24 Jones & S. 338 Court N.Y. Super. Ct. Decision date 1889-01-07 English

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AMERICAN SURETY COMPANY, Respondent v. FRANCIS B. THURBER, et al., Appellants.

Headnote

Bond or Agreement of Indemnity by the defendants to the plaintiff, covenanting to save plaintiff’s harmless upon its guaranty of indemnity to a sheriff, against the consequences of levies under executions in his hands—Extent of liability.
The extent of the liability depends upon the conditions of said agreement, and these are to be so construed as to give due effect to each and every part thereof, according to the intention of the parties at the time. When thus construed, a reference in a part of one of the recitals to a sum of $214.52, must be rejected as plainly erroneous when it so appears from the remaining portion of the same recital.
This reference does not constitute the whole of the recital, in regard to the extent of the bond given by the plaintiff for defendants to the sheriff, for in continuance the recital' further states in reference to the said bond “ a copy of which bond is hereto annexed marked * A ’ and forms a part hereof.” The copy of the bond referred to, being actually
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annexed, it forms a part of the recital, and corrects any misdescription therein, and shows the amount of liability assumed by the plaintiff to be $10,000. There is no ambiguity. The operative words of the agreement are clear and cannot be controlled nor affected by the erroneous recital. Holmes v. Hubbard, 60 N. Y. 183 .
It makes no difference, that some of the other execution creditors executed to the plaintiff separate indemnity agreements for the whole loss, similar to that given by these defendants. If all the execution creditors, including the defendants, had executed to the plaintiff a joint indemnity agreement, a different question would be presented.
Before Freedman and Ingraham, JJ.
Decided January 7, 1889.
Appeal from, judgment in favor of the plaintiff entered upon the verdict of a jury, and from order denying defendant’s motion upon the minutes for a new trial.
H. Arlington, attorney and of counsel for appellants, argued: —
I. A recital in a bond preceding the condition is conclusive upon the parties as an admission of the fact recited, and restrains the condition, the words of which imply a greater liability than the recital. Bell v. Bruen, 1 How. U. S. 183; Arlington v. Merricke, 2 Saund. 403; Liverpool Waterworks Co. v. Harpley, 6 East 507; Wardens, &c., v. Bostock, 2 Bos. & P. 175 ; Leadley v. Evans, 2 Bing. 32; Pepin v. Cooper, 2 Barn. S Aid. 431; Sanger v. Baumburger, 51 Wis. 592 ; Bennehan v. Webb, 6 Fred. L. (N. C.) 57 ; Carpenter v. Buller, 8 M. &, W. 209; Payler v. Hammersham, 4 Maule & S. 423. It will be observed by referring to the bond given by the defendants to the plaintiff, that the recital and the condition point in different directions in reference to the extent of the obligation incurred by the defendants. in giving the same. It will also be observed that in paragraph “ First ” of said bond so given
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by defendants to the plaintiff the annual charge or premium to be paid by the defendants to the plaintiff for executing the bond mentioned in the recital above set forth is two dollars and fifteen cents. The condition of the bond so executed by the defendants is broad and general in its terms, and such as is usually found in bonds of this character.
II. Where several creditors under separate levies give indemnity bonds, an action cannot be maintained against any one creditor for the entire damage by reason of such levies. Posthoff v. Schriber, The Daily Register, March 12th, 1888; Livingston v. Bishop, 1 John. 290 ; Miller v. Fenton, 11 Paige, 19.
Dill, Chandler & Seymour, attorneys, and Edward C. James, of counsel for respondent, argued:—
■ I. It is not true that the indemnity agreement, given by the defendants, recites that it was given only for $214.52. The recital referred to is in these words: “ Whereas, at the special instance and request of the parties of the first part, and on the security hereof, the American Surety Company has become surety for said Thurber, Whyland & Co., on a certain bond to the sheriff of ■Columbia county, of even date herewith, for the sum of $214.52, in an action in the Supreme Court of the county of New York and state of New York, wherein said Thurber, Whyland and others are plaintiffs, and Mark T. Mason is defendant, a copy of which bond is hereto annexed, marked ‘ A,’ and forms a part thereof.” The copy of the bond to the sheriff, which forms part of the same recital and corrects any misdescription therein, shows the amount of liability assumed by the plaintiff to be $10,000; it recites the names of all the execution creditors, interested in the proposed levy, and it expressly covenants to indemnify the sheriff against all damages, etc., which may arise from the levying and making sale, under and by virtue of such executions, of all or any personal property, which he may
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judge to belong to such judgment debtor, etc. This clearly contemplates that the sheriff is to levy under all such executions. With this undertaking in their immediate view, and annexed to their own agreement, the defendants covenant with the plaintiff, that they “ will at all times indemnify and keep indemnified the said company from and against all loss, damages, costs, charges, counsel fees and expenses whatsoever, which said company shall, or may, for any cause, at any time, sustain or incur, by reason, or in consequence of said company having executed said agreement, and do further covenant and agree to pay to said" company and its representatives, all damages for which said company, or its representatives, shall become responsible upon the said bond, before said company, or its representatives, shall be compelled to pay the same,” etc. Nothing in this contract limits the obligation of the defendants to the amount of their execution, which was $256.79 instead of $214.52. There is no agreement to pay a pro rata share of the loss, or to the extent of their interest in the levy, and there is no reference to any other agreements of like character, or to any other persons who are to bear a portion of the loss. This is a plain, direct and specific contract on the part of the defendants to save the plaintiff harmless from the whole loss.
When a bond is received by an obligee, as a security against and a consideration for becoming surety, it should have that interpretation, as between the parties, which will make it effectual. Belloni v. Freeman, 63 N. Y. 383 , 388-9. When the operative words of a deed are clear and unambiguous, a recital may not control them. Holmes v. Hubbard, 60 N. Y. 183 -6. Here the obligation of the defendants to pay the whole loss, even before the plaintiff is obliged to pay any of it, is clearly expressed in their written contract; the recital "referred to does not qualify or limit that obligation; •any ambiguity which might otherwise arise from the
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misdescription of the bond is corrected and dispelled by annexing a copy of the bond as a part of the recital. The defendants had a perfect right to ask the plaintiff to indemnify the sheriff against all of these losses, and to agree to secure the plaintiff harmless from all damage in consequence of its so doing. It was-not even necessary that the defendants should have had any interest in the proposed levy to do this. The case against them is not weakened by the fact that they were interested parties. The plaintiff is simply a surety, having no interest in the acts of the sheriff. It could have let the matter entirely alone. It acted as surety at defendants’ request, and in the faith of their contracts. The defendants were well known and responsible parties. If they had not given this agreement of indemnity to the plaintiff, the latter would not have guaranteed the performance of the undertaking given to the sheriff. The defendants’ agreement to indemnify the plaintiff against all damages arising from these levies may have' been an unwise one, but they should have thought of that before they gave it, and induced plaintiff’s action on the faith of it. The court has no power to change it. A contract is a contract, and, if valid, must be enforced according to its terms. The motion to dismiss the complaint was properly denied.
II. As to the other indemnity agreements. There was a large number of other judgment creditors, whose executions were also in the sheriff’s hands, and who wrere likewise interested in the proposed levy. Some of these executed to the plaintiff separate indemnity agreements for the whole loss similar to that given by these defendants. The position of the defendants is that they should not perform their contract with the plaintiff, because the plaintiff did not pursue its remedy against these other indemnitors upon their separate agreements. This position is wholly untenable. This is a case where each tub stands on its own bottom. It is none of defendants’ business how many separate
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indemnity agreements the plaintiff holds for this loss. The sheriff and the several judgment creditors, who directed him to levy upon the property of Brown, were trespassers. Fonda v. Van Horne, 15 Wend. 631 ; Stevens v. Somerindyke, 4 E. D. Smith, 418. Had all the judgment creditors united in the request, each would be liable for the whole damage, and, if one was compelled to pay the whole, he would have no remedy for contribution from the others. Peck v. Ellis, 2 Johns. Ch. 131 ; Miller v. Fenton, 11 Paige, 18; Wehle v. Haviland, 42 How. Pr. 399 ; Andrews v. Murray, 33 Barb. 354 . Had all united in a joint contract of indemnity to the plaintiff, and one been obliged to pay the whole damage, he would be entitled to compel contribution from his fellows, and his remedy against them would be confined to a claim for contribution. Booth v. F. & M. Nat. Bk., 74 N. Y. 228 -232. But here there is not even a joint contract. Each judgment creditor stands entirely separate from the others. Each contracted separately with the plaintiff that, in consideration of its guaranteeing the performance of the bond of Hamilton and Wood to the sheriff, he would pay all the damages which the plaintiff suffered in consequence of such guaranty. No one is a surety for any other; there is no claim that any one of them acted at the request of any other. It is simply the case of separate and independent contracts of indemnity against an obligation. Each is held to the full performance of his own contract, precisely the same as if the separate contracts never existed.

This action was brought upon an indemnity agreement executed by the defendants to the plaintiff, to recover the sums which the plaintiff had been compelled to pay. The extent of the liability of the defendants depends upon the said agreement, and this is to be construed so as to give due

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effect to each and every part thereof according to the intention of the parties at the time.

! ' When thus construed, the reference in one' of the recitals to the sum of $214.52 must be rejected as plainly erroneous. It does not constitute the whole of the recital as to the extent of the bond given by the plaintiff at the request of the defendants to the sheriff of Columbia county, but, on the contrary, the recital goes on and says, viz.“ a copy of which bond is hereto-annexed, marked ‘ A ’ and forms- a part hereof.”

The copy of the bond thus referred to appears to have been actually annexed. It therefore forms part of the same recital and corrects any misdescription therein.. It shows the amount of liability assumed by the plaintiff to be $10,000; it recites the names of a large number of execution creditors interested like the defendants in the proposed levy, and it expressly covenants to indemnify the sheriff ’ against all damages, etc., which may arise from the levying upon, and making sale of, under and by virtue of “such executions” all or_any personal property which he may judge to belong to such judgment debtor, etc. This clearly contemplated that the sheriff was to levy under all such executions.

• With this bond in their immediate view and annexed to their own agreement, the defendants covenanted with the plaintiff that they will at all times indemnify and keep indemnified, the said company from and against all loss, damages, costs, charges, counsel fees and expenses whatsoever, which said company shall or may, for any cause, at any time, sustain or incur by reason or in consequence of said company having executed said agreement; and does further covenant and agree to pay to said company and its representatives all damages for which said company or its representatives shall become responsible upon the said bond before said company or its representatives shall be compelled to pay the same, etc.

Nothing in this agreement limits the obligation of' the

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defendants to the amount of their execution, which was $256.79, instead of $214.52, or to any pro rata share of the loss, and there is no reference to any other agreements of like character, or to any other persons who are to bear a portion of the loss. The agreement, as a whole, is a plain, direct and specific contract on the part of the defendants to save the plaintiff harmless from the whole loss. There is no ambiguity. The operative words of the agreement being clear and unambiguous, they cannot be controlled by the erroneous recital. Holmes v. Hubbard, 60 N. Y. 183 . For the same reason it can make no difference that some of the other execution creditors executed to the plaintiff separate indemnity agreements for the wdiole loss similar to that given by these defendants. If all the execution creditors, including the defendants, had executed to the plaintiff a joint agreement, a different question would be presented.

The defendants failed to prove any conspiracy or collusion, and an examination of the whole case shows that all the exceptions taken by them are untenable. When the proofs were closed, there was no question for the jury, and consequently the verdict was properly directed.

' The judgment and order should be affirmed with costs.

Ingraham, J., concurred.

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