Court Opinion

ID: 6654953
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:57:05.802113+00
Date Added: 2024-06-11T09:04:07.800202
License: Public Domain

Albeet, O.
Most of the facts necessary to a proper understanding of this case are set out in a former opinion, reported ante, page 122. A rehearing was ordered, and the cause submitted to this department for an opinion.
The recommendation in the former opinion is based exclusively on the ground that the action ivas barred by the statute of limitations, and that conclusion is based on the theory that -the action is for damages resulting from the negligent performance of a contractual duty. That theory, we are now satisfied, is untenable. The principal *130case cited in the former opinion in support of that theory is Russell & Co. v. Polk County Abstract Co., 87 Ia., 233, 43 Am. St. Rep., 381. In that case the plaintiff had employed the defendant to furnish an abstract of title. A judgment lien was omitted from the abstract, and in consequence of such omission the plaintiff sustained damages for which the action was brought. The plaintiff’s theory of the case was that his right of action did not accrue until he had been damaged by the mistake; the defendant’s theory was that it accrued when the abstract was furnished. The court held with the defendant. But that case differs from this. In that case there was at least an implied undertaking on the part of the defendant to use due care and skill in making the abstract, and upon its failure to use such care and skill there was at once a breach of its undertaking. To say that the omission of the judgment from the abstract was negligence is only another way of saying that the defendant failed to keep and perform its undertaking to the plaintiff. In the case at bar the undertaking of the defendant, as set forth in the petition and shown by the evidence, was to pay off and discharge the Toncray note and mortgage, and “keep and save said Matthew O’Connor [the testator] and the plaintiff free and harmless of and from the same.” It will be seen, therefore, that it was not an undertaking that the defendant would use due diligence in ascertaining the party to whom payment should be made, and in making payment to such party, but an absolute undertaking to make payment to the party entitled thereto, and to indemnify the O’Connors against the Toncray note and mortgage. In that view of the case, the question is not whether the defendant was negligent in the performance of its contractual duty, but whether it performed such duty, and the fact that the amount due on the Toncray note and mortgage ivas paid to Toncray, instead of to the lawful holder of the paper, has no bearing on the question as to the time when the breach of contract occurred.
As we have seen, the defendant engaged to do two *131things, namely, to pay off and discharge the Toncray note and mortgage, and to indemnify the O’Connors against such paper. The undertaking does not differ in principle from that involved in Wright v. Whiting, 40 Barb. [N Y.], 235. There, upon the dissolution of two firms, the defendant had entered into an undertaking with the plaintiff, who was one of the partners, to pay the debts of the two firms, and to save the plaintiff harmless from and against such debts. As to the first clause, the court held that it was an absolute and positive promise to pay the debts, and upon a failure of the promisor to keep and perform such promise, a right of action at once accrued in favor of the promisee, although he had paid none of the debts and had sustained no actual damage. The following cases are to the same effect: Dye v. Mann, 10 Mich., 291; In re Negus, 7 Wend. [N. Y.], 499; Churchill v. Hunt, 3 Den. [N. Y], 321; Douglass v. Clark, 14 Johns. [N. Y.], 177. But as to the second clause, the court held that the promisor was not liable, and no right of action accrued to the promisee, until the latter had paid the debts or some portion of them. In Gregory v. Hartley, 6 Nebr,, 356, this court said (p. 361) : “The rule is well settled that if a condition or promise be only to indemnify and save harmless a party from some consequence, no action can be maintained until actual damage has been sustained by the plaintiff.” To the same effect are the following: Fortes v. McCoy, 15 Nebr., 632; Honaker v. Vesey, 57 Nebr., 413; Chace v. Hinman, 8 Wend. [N. Y.], 452, 24 Am. Dec., 39.
The construction placed on the contract in Wright v. Whiting, supra, commends itself to us, and there can be no doubt that it fits the contract involved in this case. The petition in the case at bar is sufficiently broad to cover both clauses of the undertaking, and to show a breach, both of the undertaking to pay, and of that to indemnify. But there is no need to concern ourselves about the first, because every item of actual damage which resulted by reason of the breach of the undertaking to pay the note is an element of the damages recoverable for a breach of the *132undertaking of indemnity. It is clear, therefore, that if the plaintiff’s right to recover for the latter breach is not barred, the fact, if it be a fact, that his right to recover for the former is barred, has no substantial effect on his right to recover in this action. As we have seen, a breach of the indemnity undertaking occurred as soon as the testator or the plaintiff made payment, in whole or in part, of that against which they were indemnified by the defendant. Such payment "was made within less than four years before the commencement of this action, and then, and not before, did the plaintiff’s cause of action for breach of the indemnity undertaking accrue. It follows, therefore, that the action was not barred by the statute of limitations, and that the former conclusion on that point is wrong.
It is urged that there is no evidence tending to show that McVicker, the agent who made the loan and undertook to discharge and pay off the Toncray note and mortgage, was acting for the defendant in that behalf. The evidence bearing upon that point runs through the greater part of a fair-sized bill of exceptions, and it is impossible to condense it in such a way as to indicate the weight that should be given it. The -writer has gone over it, not once but many times, and is satisfied that it is amply sufficient to warrant the submission of the cause to the jury, and that it Avas error to direct a verdict for the defendant.
It is recommended that the former judgment of this court be vacated, and the judgment of the district court reversed, and the cause remanded for further proceedings according to law.
Faavcett and Granville, CO., concur.
By the Court:
For the reasons stated in the foregoing opinion, the former judgment of this court is vacated, and the judgment of the district court reversed, and the cause remanded for further proceedings according to law.
REVERSED AND REMANDED.