Case Name: JAMES H. DUNHAM & CO. v. McCANN et al.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1905-12-30
Citations: 97 N.Y.S. 212
Docket Number: 
Parties: JAMES H. DUNHAM & CO. v. McCANN et al.
Judges: 
Reporter: West's New York Supplement
Volume: 97
Pages: 212–218

Head Matter:
(110 App. Div. 157.)
JAMES H. DUNHAM & CO. v. McCANN et al.
(Supreme Court, Appellate Division, First Department.
December 30, 1905.)
Principal and Surety—Assignment oe Bond—Rights of Assignee.
After an assignment for benefit of creditors an arrangement was made for a reassignment to the assignor, and he gave the assignee a bond conditioned to protect the assignee from expenses by reason of the assignment and reassignment, and the assignee, in consideration of such sums as might thereafter be advanced to him as assignee by plaintiff, assigned the bond to plaintiff. Plaintiff was surety on the assignee’s bond. Retd, that plaintiff could not recover of the sureties on the bond given to the assignee for moneys advanced after the assignment on account of expenses and disbursements by the assignee growing out of the assignment and reassignment.
[Ed. Note.—For cases in point, see vol. 40, Cent'. Dig.' Principal and Surety, § 124.]
■ Laughlin, J., dissenting
Appeal from Special Terjn, New York County.
Action by James H. Dunham & Co. against Patrick McCann and others. From a judgment in favor of plaintiffs, certain defendants appeal.
Reversed. . •
Argued before McLAUGHLIN, PATTERSON, INGRAHAM, and LAUGHLIN, JJ.
William R. Harris, for appellant Heuberer.
Paul R. Towne, for appellant Nicoll.
G. A. Seixas, for respondents.

Opinion:
INGRAHAM, J.
The bond sued on was upon the principle that the ' principal, McCann, should keep "Thomas O'Brien harmless and save and protect him from all expenses and disbursements by reason of said assignment and reassignment and shall pay and discharge all sai'd disbursements and expenses until said assignee is finally discharged and released from all responsibility, then the obligation to be void; else to remain in full force and virtue." The complaint alleges that on the 19th day of December, 1881, the said Thomas O'Brien duly assigned and delivered said bond of indemnity, together with all his rights thereunder, to the plaintiff; that the consideration of said assignment was certain moneys theretofore advanced by the plaintiff to said O'Brien, as such assignee, on account of the costs and expenses incurred and paid by him by reason of and arising out of said general assignment and said reassignment, and parting with said assigned property, and such other and further sums as plaintiff might, thereafter, advance to said O'Brien, as such assignee, on the same account and purpose. The complaint then alleges that after the assignment by said O'Brien to the plaintiff of said bond of indemnity, and at various times between June 1, 1882, and June 30, 1897, the plaintiff paid and advanced to said O'Brien, as such assignee, on account of the expenses and disbursements paid and incurred by said assignee, arising and growing out of said assignment and reassignment, the sum of $4,792.60.
I do not see how the assignment of this bond to the plaintiff could impose any liability upon the surety for the money subsequently paid to O'Brien or on his account. The obligation ran to O'Brien, his legal representatives or assigns, but it was to be void if McCann should keep said O'Brien harmless and save and protect him from all expenses and disbursements by reason of said assignment and reassignment. As I read the complaint, there is no allegation of any breach of that condition. O'Brien has paid no money on account of the assignment or reassignment. It is not alleged that the plaintiff loaned him any money, but the plaintiffs claim to recover as "the sole, true, and lawful owner of the bond," and that, being the owner of the bond, he is entitled to recover from the sureties the amount that he has paid to O'Brien on his account. This the sureties did not obligate themselves to pay, and the assignment of the bond and the subsequent payment by the plaintiff, as I view it, gives no cause of action against the surety.
I think the judgment should be reversed, with costs, and the demurrer sustained, with costs, with leave to plaintiff to amend complaint on payment of costs in this court and in the court below.
PATTERSON and McLAUGHLIN, JJ., concur.