Case Name: James H. Dunham & Co., a Domestic Corporation, as Substituted Plaintiff in Place and Stead of James H. Dunham, Deceased, Respondent, v. Patrick McCann and Others, Defendants, Impleaded with Edward S. Nicoll and Others, Appellants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1905-12-30
Citations: 110 A.D. 157
Docket Number: 
Parties: James H. Dunham & Co., a Domestic Corporation, as Substituted Plaintiff in Place and Stead of James H. Dunham, Deceased, Respondent, v. Patrick McCann and Others, Defendants, Impleaded with Edward S. Nicoll and Others, Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 110
Pages: 157–165

Head Matter:
James H. Dunham & Co., a Domestic Corporation, as Substituted Plaintiff in Place and Stead of James H. Dunham, Deceased, Respondent, v. Patrick McCann and Others, Defendants, Impleaded with Edward S. Nicoll and Others, Appellants.
First Department,
December 30, 1905.
Bond of indemnity — when sureties not liable to assignee of bond — demurrer to complaint.
When an assignor for the benefit of creditors, after a compromise with the creditors and a reassignment of the property, has given a bond of indemnity with sureties to .his assignee, agreeing to save him harmless from all expenses and disbursements which he may incur by reason of such'assignment and reassignment, and said assignee has assigned the bond of indemnity to the plaintiff, such plaintiff cannot recover from the sureties sums advanced to said assignee for the benefit of creditors subsequent to the assignment of the bond to the plaintiff to meet alleged expenses and disbursements. A complaint in an action, to recover from the sureties such sums advanced after the assignment of the bond is demurrable.
Latjghlin, J., dissented, with opinion.
Separate appeals by the defendants, Edward S. Ricoll and others, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Rew York on the 11th day of March, 1905, upon the decision of the court, rendered after a trial at the Rew York Special Term, overruling the separate demurrers interposed by the sáid defendants to the plaintiff’s complaint.
Paul R. Towne, for the appellant Edward S. Nicoll.
William H. Harris, for the appellant Charles E. Heuberer and guardian ad litem for- the appellants Harriet E. and Cornelia V. Heuberer.
G. A. Seixas, for the respondent.

Opinion:
Ingraham, J.:
The bond sued on was upon the condition that the prinqipal, 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 said 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, 188Í, the said' Tilomas 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, a's 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 Juné 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 off 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 plain- v tiff loaned him any money, but the plaintiff claims to recover as " the sole, true and lawful owner of said 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, givés 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., concurred; Laughlin, J., dissented. , .