Globe Indemnity Co. v. Larkin

SPENCE, J. Plaintiff, having sustained a loss upon two broker’s bonds, brought this action against the indemnitors upon certain indemnification agreements given to plaintiff at the time of the issuance of said bonds in 1929 and 1930. The action resulted in judgment in favor of plaintiff and against defendant Neil E. Larkin in the sum of $8,656.11. Said defendant appeals from said judgment.

The sole contention on this appeal is that the action was barred by the statute of limitations (Code Civ. Proc. 337, subd. 1). It is therefore necessary to set forth the pertinent portions of the indemnification agreements and the chronological sequence of events.

The indemnification agreements provided in part that the indemnitors agreed “to indemnify the Company from and against any and all liability, loss, costs, damages, attorneys’ fees and expenses, of whatever kind or nature, which the Company may sustain or incur by reason, or in consequence of executing said bond or bonds as surety, . . . and which it may sustain or incur ... in defending . . . any action, suit or other proceeding which may be brought in connection therewith . . . and obtaining a release from liability under said bond or bonds; and to indemnify the Company to the full amount of liability, loss, costs, damages, attorneys’ fees and expenses as aforesaid, regardless of any reinsurance that may be carried on said bond or bonds. ...”

Upon default by the broker, three persons instituted actions in Placer County in 1932 against the broker and against the plaintiff herein upon its broker’s bonds. On March 10, [893193]2, plaintiff herein advised defendant of the pendency of said actions and of plaintiff’s intention to hold defendant “personally responsible for any loss, cost or expense of any nature whatsoever which we may be called upon to incur by reason of our having become surety on these bonds. ...” The three actions were pending before the Superior Court in Placer County until January 23, 1937, when the parties thereto apparently worked out an agreement of compromise. On that day, the broker dismissed its cross-complaints; a stipulation was filed waiving findings; and judgments were entered in favor of plaintiffs in said three actions for a total sum, including interest and costs, of approximately $11,000. On the same day, plaintiff herein paid the sum of $6,850 in satisfaction of all three judgments and a satisfaction of judgment was entered in each case. Plaintiff herein also paid attorney’s fees and costs amounting to $1,806.11 in the defense of said three actions, said attorneys’ fees having been paid in September, 1936, and February, 1937. It is apparently conceded that judgment herein was properly entered against defendant for $8,656.11, being the total of the payments made by plaintiff, provided this action was not barred by the statute of limitations. The defense of the statute of limitations was appropriately raised by demurrer and answer in the trial court.