Case Name: UNITED STATES FIDELITY & GUARANTY CO. v. SMITH et al.
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1933-02-07
Citations: 142 Or. 1
Docket Number: 
Parties: UNITED STATES FIDELITY & GUARANTY CO. v. SMITH et al.
Judges: Rand, C. J., Belt and Rossman, JJ., concur.
Reporter: Oregon Reports
Volume: 142
Pages: 1–12

Head Matter:
Argued December 1, 1932;
reargued January 31;
affirmed February 7, 1933
UNITED STATES FIDELITY & GUARANTY CO. v. SMITH et al.
(18 P. (2d) 1032)
Earl F. Bernard, of Portland (Collier, Collier & Bernard, of Portland, on the brief) for appellant.
L. J. Balbach, of Portland (Sheppard, Phillips & Ralston, of Portland, on the brief) for respondent.

Opinion:
BEAN, J.
This is an action upon an indemnity bond tried by the court without a jury. Judgment was rendered in favor of the plaintiff for the sum of $5,720.89, with interest. Defendant C. J. Smith appealed.
The appellant states in his brief: "The question on this appeal is that there is no evidence that the paper admittedly signed by the appellant is an agreement to indemnify the plaintiff for any obligation incurred by the plaintiff as surety on appeal in the case of Pulkrabek v. Bankers Mortgage Corporation".
We will first notice the allegations of the complaint, which are admitted in the answer, some of which are admitted in part. The first paragraph of the complaint alleges the corporate capacity of the plaintiff, about which there is no controversy. The second paragraph, which is referred to in the denial, is: "That at the times herein mentioned the said defendants were officers and financially interested in a certain corporation, known and designated as Bankers Mortgage Corporation". The third paragraph, which is admitted, is as follows:
"That the said United States Fidelity and Guaranty Company became surety for the said Bankers Mortgage Corporation upon an appeal and stay bond in a certain suit entitled J. E. Pulkrabek v. Bankers Mortgage Corporation prosecuted in the Circuit Court of the State of Oregon for Multnomah County, No. H-4782, in which action judgment was entered against the said Bankers Mortgage Corporation, from which judgment the said Bankers Mortgage Corporation appealed to the Supreme Court of the State of Oregon, which Court affirmed the said judgment, mandate issued and judgment entered on the 7th day of October, 1925, against the said Bankers Mortgage Corporation and plaintiff herein in the sum of $9,619.21 and $195.45 costs and disbursements in the said Circuit Court, with interest on both of said sums at the rate of 6 per cent per annum from the 5th day of July, 1922, and also for the sum of $83.75 costs and disbursements of the said Supreme Court".
The fourth paragraph, which seems to relate to the bone of contention, is as follows:
"That as an inducement to and consideration for the execution of the said appeal and stay bond the defendants entered into and executed a written instrument whereby they jointly and severally agreed, among other things, to save harmless and keep indemnified the plaintiff herein against all loss and damages whatsoever that should or might at any time happen or result to the plaintiff herein for or by reason of the execution as surety of the said appeal and stay bond, a true copy of which is annexed hereto, marked 'Exhibit A' and made a part of this complaint".
This is denied, with certain exceptions to which we will hereafter refer.
The fifth paragraph alleges a demand, that there was a failure to pay the judgment and that plaintiff was compelled to 'and did, on November 4, 1925, pay the said judgment creditor in full satisfaction of its obligation, by reason of said judgment, the sum of $5,720.89. It is, further alleged that plaintiff demanded of defendants payment of said obligation, but they failed to pay any part thereof.
To this complaint defendant C. J. Smith interposed the following answer:
"Comes now the defendant, C. J. Smith, and answering the plaintiff's Amended Complaint, denies Paragraphs No. II, IV and V of said Amended Complaint and the whole thereof, save and except this answering defendant admits that he was at one time an officer of and financially interested in the Bankers Mortgage Corporation, and save and except this answering defendant further admits that he signed the paper in substance as set forth in Exhibit A attached to plaintiff's complaint, and save and except this answering defendant further admits that this answering defendant failed to satisfy the judgment mentioned in the plaintiff's complaint".
Referring first to paragraph II of the complaint, it will be seen from the answer that the "defendant admits that he was at one time an officer of and financially interested in the Bankers Mortgage Corporation". The only part that can be claimed was denied is that the defendant was such officer at the time mentioned in the complaint. But the admission that he was at one time an officer and financially interested in the Bankers Mortgage Corporation, without designating any other time or times than those mentioned in the complaint, would imply that he was such officer at the times mentioned. It is not very material, however.
As to paragraph IV of the complaint, the defendant, as we understand his answer, admits that he, with the other defendant, executed a written instrument whereby they jointly and severally agreed, among other things, to save harmless and keep indemnified the plaintiff
herein against all loss and damage whatsoever that should or might at any time happen or result to the plaintiff herein for or by reason of the execution of the said appeal and stay bond.
The appeal and stay bond, which is usually called an undertaking, is fully described in paragraph III of the complaint, which the defendant does not deny, although the appeal and stay bond signed by the United States Fidelity & Guaranty Company is not attached to the complaint. Therefore, when they refer to said "appeal and stay bond" it refers to the appeal bond mentioned in paragraph III of the complaint.
To mention specifically the defendant's denial of paragraph IV of the complaint, it is denied "save and except this answering defendant further admits that he signed the paper in substance as set forth in Exhibit A attached to plaintiff's complaint". Therefore the execution of the indemnity instrument is admitted. Without any explanation or further allegation that the indemnity bond or agreement was in any way invalid, it must be taken as an admission that the indemnity instrument was executed as alleged by the plaintiff in paragraph IV. This would leave only that part of paragraph IV as denied, namely, that as an inducement to and consideration for the execution of said appeal and stay bond the defendants executed such bond. That allegation is superfluous. The bond of indemnity attached to plaintiff's complaint is executed under seal by the defendant C. J. Smith, which imports a consideration, and it is not absolutely necessary that there should have been any inducement; nevertheless defendant admits in his answer that he was interested in the Bankers Mortgage Corporation and admits the inducement in part.
That leaves the allegation of the complaint in the fifth paragraph, that the plaintiff had paid the judgment rendered on appeal in the Supreme Court, to be proven. As shown by the bill of exceptions, counsel for plaintiff made the following offer in order to prove the payment of the judgment:
"At this time the plaintiff offers in evidence draft No. 4104, in the sum of $5,727.89, in payment of the judgment taken in the case of J. E. Pulkrabek v. Bankers Mortgage Company, No. H-4782, which draft was paid to Mr. T. J. Pulkrabek in satisfaction of the judgment after the same had gone to the Supreme Court and been affirmed, and is a draft paid out by the plaintiff under the bond executed by the plaintiff on the appeal of said case".
This was admitted upon the statement of defendant C. J. Smith, through his counsel, that he had no objections to the admission of said draft in evidence. This statement and exhibit, being uncontradicted, was sufficient to establish the payment of the judgment.
The contention of appellant that the record does not show an agreement to indemnify the plaintiff for any obligation incurred by the plaintiff, as surety on appeal in the case of Pulkrabek v. Bankers Mortgage Company, is not borne out by the record. The indemnity bond, copy of which is attached to plaintiff's complaint as an exhibit, and a photo static copy of which was introduced in evidence, recites in the first part thereof that the plaintiff has become surety "at my request" on a certain bond dated August 26, 1922, wherein Bankers Mortgage Company is the principal, and the same description, somewhat extended, is found in paragraph III of the amended complaint in describing the surety bond that was executed for the said Bankers Mortgage Company upon an appeal and stay bond in a certain suit entitled J. E. Pulkrabek v. Bankers Mortgage Company. It was unnecessary to further describe the appeal and stay bond, and there is no room for any misunderstanding but that the indemnity bond was executed by the defendant C. J. Smith to indemnify the plaintiff by reason of having signed such surety bond. In other words, the portion of the complaint admitted, together with the proof submitted, makes a complete case in favor of plaintiff.
It will be noted from the record that the plaintiff in his complaint described and pleaded in substance the appeal and stay bond describing in what case it was executed and the outcome of the case upon appeal, which we have several times referred to as having been admitted.
Objection seems to be made for the reason that the plaintiff did not also put in evidence a copy of the appeal and stay bond. It is unnecessary for the plaintiff to show the execution of the appeal and stay bond in its complaint more than once. It is unnecessary for it to be admitted by the defendant more than once.
The findings of the circuit court are supported by the admitted portions of the complaint and by the evidence.
The judgment should be affirmed. It is so ordered.
Rand, C. J., Belt and Rossman, JJ., concur.