Court Opinion

ID: 6587430
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:50:11.320327+00
Date Added: 2024-06-11T15:57:14.195541
License: Public Domain

ON PETITION FOR REHEARING.
Conaway, Justice.
It is urged that the majority of this court were in error in saying on the first hearing of this cause that the indemnity against loss obtained by Metcalf as surety for Charles Kastaetter was for the benefit of his co-surety equally with himself. It is urged that this rule applies only where the indemnity is furnished by the principal debtor, and not where it is furnished by a third party. It is true that a third party may indemnify one of several sureties to the exclusion of the co-sureties. This is a right of the party furnishing the indemnity so to limit his liability. There is no lack of authority on the part of a co-surety to accept indemnity from a third party sufficient to secure all of the sureties against loss. The indemnity furnished in this *10case was not a contract to bold one surety harmless. It was to pay so. much money if the defalcation should not be found to be for a less amount. I am still of the opinion that such a contract is for the benefit of both sureties. The contract in this case was to pay an amount which proved to be the exact amount of the defalcation, which must have been known at the time of the execution of the contract. It is true defendant in error testifies that he took the notes to indemnify himself. That was, no doubt, his object. That was no obstacle in the way of his indemnifying his co-surety also. But this judgment should be sustained on another ground. It is actually for the amount necessary to indemnify defendant in error alone. If the condition of the contract can be construed as meaning that the defendant in error alone was indemnified, the judgment should still be sustained.
It is urged that there was error of law occuring at the trial in the admission i-n evidence of a former judgment against defendant in error and his co-surety, John Schlichter, in favor of the school district on account of the defalcation of Rastaetter. 12 Am. & Eng. Ency. of Law, p. 81, is cited in support of this contention, but that authority seems not to sustain the point to which it is cited. It reads as follows: “As a rule, a judgment is not admissible in evidence against a stranger to the action in which ‘ ‘it was rendered. An agent or attorney is not estopped by “a judgment because he conducted the suit, nor is a wit“ness bound by a judgment in which he testifies. But in “the absence of fraud and collusion, a judgment is conclu- ‘ ‘sive evidence, even against a stranger, of the relation of “debtor and creditor between the parties thereto, and of “the amount of the indebtedness.” The amount of the indebtedness is the fact to be determined in the case at bar, not the validity of the former judgment. The limitation of this rule is stated in note 3, p. 86: “Supposing “such third persons were not bound with or for the parties “found liable, the rule applies. ” And further: “Accord- * ‘ing to some authorities, the judgment is prima facie evi*11“dence in sucb cases.” Bolln was not bound with or for Metcalf. He contracted directly with Metcalf.
A question has been raised as to the necessity of joining the co-surety, Schlichter, as party plaintiff in the action. This seems to be unnecessary in either view of the case. If the indemnity was for the benefit of Metcalf alone, he is the only party in interest, and the only one competent to sue. If for the benefit of Metcalf and Schlichter both, then Metcalf is a “person with whom or in whose name a “contract is made for the benefit of another, ” and may sue alone. See Rev. Stat., Sec. 2384.
At the time plaintiff in error executed the notes sued on, the sheriff of the county was proceeding to take possession of the goods in question by virtue of a writ of attachment against Rastaetter. It is urged that there was evidence tending to show that no such writ of attachment had been issued, and that no bond for the attachment had been filed, and that the suit in which the attachment was ■claimed to have been issued was not really commenced. It is urged that it was error to take this issue from the jury. If the consideration for the notes had been the forbearance to proceed under this particular writ, this would be plausible. But it would have been of small consequence to plaintiff in error to protect himself from this writ, and leave'matters so that another would be immediately sued out and served on the goods. If any of the ■objections now urged to the writ are truthful, he could have made short work of that writ by raising those objections in a proper proceeding in the trial court, and without giving any notes or other indemnity to Rastaetter’s ■sureties or either of them. But his object was to prevent the seizure of the goods by attachment. He testifies, “I “gave these two notes to save my property from attach“ment.” A decision that the particular writ which the sheriff held was invalid, would not have accomplished this object. Plaintiff in error was evidently aware of this, and he accomplished his object in another way,- by giving as indemnity the notes which he now repudiates. It is *12claimed that notwithstanding this indemnity, Metcalf or Schlichter might have commenced another action, and might have attached Rastaetter’s interest in the goods. This is not conceded. It is negatived by the testimony of both parties. But it is not necessary to discuss this proposition. It was not done nor attempted. So plaintiff in error received the benefit he contracted for as. the consideration of his notes. The court wisely took from the jury the irrelevant and perplexing questions raised as to the actual commencement of an action and the validity of the writ of attachment. It was immaterial whether an action had been commenced or a writ issued or not. Plaintiff in error now claims that Rastaetter had no interest in the goods —that Rastaetter absconded on the third day of April, and plaintiff in error, of his own motion, dissolved the partnership on the fifth. It may be well that he could so dissolve the partnership and proceed to close up the partnership business. But he could not so destroy Rastaetter’s interest in the goods. That remained the same after the dissolution as before, and subject to the same proceedings on account of Rastaetter’s liabilities. Plaintiff in error now testifies that Rastaetter had no interest in the partnership property on account of having received from the firm more than his interest amounted to. But all of this is immaterial. Plaintiff in error did not defend the goods which he claims were exclusively his own on this or any other ground now urged. He avoided all litigation by executing and delivering as indemnity the notes now sued on. And defendant in error, in consequence, lost his opportunity to establish, if he could, that Rastaetter had an interest subject to attachment. Here are two sufficient considerations for the notes. Bolln says: “I gave these two notes, for I ‘ ‘did not know whether I would' have to pay the notes or ‘ ‘not. ” That is, at the time of promising to pay and accepting the consideration he did not intend to pay, and he now asks this court to aid him in completing the fraud. As to the material and controlling facts of this case, there is no *13conflict of testimony. The trial court exercised a wise discretion in taking from the jury the decision of the case, cumbered as it was with a mass of irrelevant and confusing matter. The principal ground for a new trial now urged is that this matter should be submitted to a jury. In my opinion, it is a matter which on a new trial should be excluded from the evidence. If the amount of Bas-taetter’s defalcation had proved to be less than the amount of the notes, a corresponding amount was to be credited on the notes. This contingency did not occur, and it is the only contingency under which a deduction from the amount of the notes is provided for. The judgment of the district court is affirmed.

Rehearing denied.

Hayford, Dist. J., concurs.