Anchor Casualty Co. v. Strube

KINGSLEY, J.

This is an appeal by defendant, an indemnitor, from a judgment for plaintiff, a surety company. Plaintiff instituted this action to recover a loss it sustained by virtue of a certain undertaking on a claim and delivery bond.

A chronological summary of the basic facts (as to which there is essentially no dispute) is as follows: American Aeronautics Corporation, a corporation, of which defendant was president, instituted a claim and delivery action against Grand Central Aircraft Corporation. On October 4, 1954, plaintiff, as surety, issued a claim and delivery bond on behalf of American Aeronautics Corporation, as principal, and in favor of certain obligees, including Grand Central Aircraft Company. At the same time, and in order to procure the execution of the bond, an application was executed by defendant on behalf of American Aeronautics Corporation. Also contemporaneous with the issuance of the bond and execution of the application for the bond, defendant signed a separate indemnity agreement, which, in part, provided that the indemnitor would indemnify the surety against all loss, costs, damages, attorneys’ fees and expenses which the surety might sustain or incur by reason of such undertaking on the bond. While the application for the bond was signed by defendant in his representative capacity as president of American Aeronautics Corporation, the indemnity agreement was signed by defendant simply in his individual capacity.

In the litigation in which the bond was posted, Grand Central Aircraft Company was granted a judgment on its cross-complaint for $39,159.66 against American Aeronautics Corporation, the principal on the bond.

In September of 1955 American Aeronautics Corporation became insolvent. Grand Central Aircraft Company, finding that American Aeronautics Corporation could not satisfy the judgment returned against it, instituted suit on May 11,

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1956, against the present plaintiff as surety on the bond. In that action, Grand Central Aircraft Company was successful in recovering a judgment of $39,159.66 plus costs and expenses of $54.25.

On December 13, 1957, plaintiff instituted the present action, seeking to recover from defendant, pursuant to the indemnification agreement, damages allegedly paid Grand Central Aircraft Company, as a result of having posted the claim and delivery bond on behalf of American Aeronautics Corporation, in the sum of $39,213.91, together with interest thereon at the rate of 7 per cent per annum from December 10, 1957, to the date of judgment. The suit asked, also, for $3,641.26 prior attorneys’ fees and costs, plus additional attorneys’ fees and costs for the present action. In this action plaintiff was successful.