Court Opinion

ID: 6600899
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:07:34.254341+00
Date Added: 2024-06-11T15:58:00.625814
License: Public Domain

The motion for a rehearing was disposed of at the January term, 1870, as follows:
Cole, J.
It is claimed on the re-argument of this cause that the court in its former opinion failed to take the distinction between an understanding to indemnify against damage on a liability and an indemnity against the liability itself, and it is insisted that the bond given by the defendants to Bartlett was an undertaking of the latter character. We think that the plain language of the bond itself repels any such construction. In the reciting part of the bond we find that Bartlett proposed to procure the release of the boat by executing or procuring to be executed an obligation for that purpose “ on condition that the above bounden parties shall save and hold harmless the said L. D. Bartlett, or those executing said bond or other obligation from loss or liability for or on account of any judgments that may be obtained in ” the actions against the “ Steamboat Navigation Company.” Again it is recited that it is understood and agreed by the parties to the instrument “ that any judgment that may be obtained in said action which the said Bartlett or those whom he procures to execute the bond or other obligation neces-essary and requisite to obtain the release of the boat shall be compelled to pay, shall be paid by the above bounden parties and the said Bartlett, each of the said parties and the said Bartlett paying equal and even portions thereof, and this obligation is given to secure to the said Bartlett the full payment of the amounts which the above bounden parties may or shall become liable to pay to the said Bartlett or those whom he procures to sign the bond or other obligation aforesaid.” And by the condition the obligors were to pay Bartlett or his assigns “ their *73even, equal and exact portion of all judgments ” that might be obtained against the Navigation Company in the attachment suits, which Bartlett or those signing the obligation to procure the release of the boat “ shall be liable for and compelled to pay shall save and hold harmless the said Bartlett and those signing said bond or other obligation from all loss or liability for or on account of any judgments over and above the said Bartlett's equal, even and just proportions of the same.”
It seems to me impossible to say on these clauses of the instrument that the defendants agreed to indemnify Bartlett against all liability in procuring the release of the boat. On the contrary, it is perfectly apparent that it was .the expectation of all parties that he would incur such a liability by signing a bond for the release of the boat, and that he might become liable to pay judgments obtained in the attachment suits against the Navigation Company. It was not then a covenant to indemnify against liability but a covenant to save him harmless against the consequences of that liability. This distinction is important and is recognized in the cases to which we are referred on the brief of counsel. Judge Gardiner in Gilbert v. Wiman, 1 N. Y., 550-562, alludes to this distinction, and distinguishes such cases as that of Rockfeller v. Donnerly, 8 Cowan, 623, and Chace v. Hineman, 8 Wend., 452, from the case before him. He says: “ The distinction between the bond in question and those above mentioned consists, I apprehend, in this, that by the former a “ charge ” or “fixed legal liability ” is declared to be the injury from which the obligee is to be saved harmless. By the condition of the latter, the obligor stipulates that the sheriff shall not sustain any damage or molestation by reason of any liability, etc. By the former he is to be saved from the thing specified. By the latter from its consequence, or in other words, from the damage or molestation which may result from the liability.” This “ distinction between an affirmative covenant for a specific thing, and one of indemnity against damage by reason *74of tbe non-performance of tbe thing specified ” may be rather shadowy as a foundation for assuming any real difference of intention between the two agreements, as remarked by Mr. Justice Paine in Smith v. The Chi. and Northwestern R. R. Co., 18 Wis., 17-24; or may even be wholly without foundation at common law, as declared by Beardsley, J., in Churchill v. Hunt, 3 Denio, 321-327; (see also Aberdeen v. Blackmar, 6 Hill, 324, and Jeffers v. Johnson, 1 Zab., 73). Yet it may well exist without helping this case. For here it is manifest that Bartlett was to be saved from the consequences of the liability and not from the liability itself. The obligors agree to pay him “their even, equal and exact proportions ” of all judgments that might be obtained against the company in the attachment suits which he should be liable for and compelled to pay, and save him harmless from loss or liability for, or on account of any judgments over and above his equal and just proportions of the same. In view of this plain language how can it be said that the injury from which the obligee was to be saved harmless, was a liability; that this was the thing against which he was to be indemnified ? It was of course contemplated, that Bartlett, by giving his own bond and procuring a release of the boat, must necessarily incur a liability. And it was against the consequences of this liability that he wished to be protected, and was in fact indemnified. It was obviously contemplated also that judgments might be obtained against the company which he might be liable for and compelled to pay, and he was to be saved from all loss or damage on account of being obliged to pay such judgments. This is the plain reading of the bond, and it is difficult to make its meaning more clear and obvious by argument or comment. The bond, then, is an indemnity against damage on a liability as distinguishable from an indemnity on a liability. And it follows from this construction of the instrument that there is not a proper assignment of a breach of the bond. Bartlett has paid nothing and sustained no damage on account of the judgments against the company. And *75as the plaintiffs are assignees their rights upon the hond are measured by his. If the complaint had shown that they accepted an assignment of this bond in discharge of the judgments against the steamboat company, then it doubtless would have been available to them. In that case, such an assignment would substantially be a payment of those judgments by the obligee Bartlett, and the liability of the defendants for the amount of those judgments — except the portion that Bartlett was bound to pay — would be clear and unquestionable. See upon this point, White v. French, 15 Gray, 339. And doubtless it is now competent for the plaintiffs to treat the assignment of the bond as a discharge of those judgments, and if they should conclude to do so and satisfy them of record, we cannot see any objection to their maintaining an action for the amount of those judgments — less the portions that Bartlett was bound to pay. It seems to us that they would be entitled to this remedy upon the- bond when that is done. But as the case now stands the complaint is fatally defective.
By the Court.— The order of the circuit court is modified so as to sustain the demurrer as a demurrer to the complaint.
The Chief Justice took no part in the decision of this cause.