Drake v. Porter

MoxliN, P. J.: Tbe bond on wbicb this action is brought is dated tbe 26th April, 1872. Tbe plaintiff did not give bis note for tbe costs, wbicb be seeks to recover of tbe defendants, until just before this action was commenced, wbicb was in April, 1875. It follows that tbe claims in suit accrued subsequent to tbe execution of tbe bond. Tbe condition of'the bond is, that tbe obligors should pay, or cause to be paid, all tbe firm debts or liabilities now (that is on tbe 26th April, 1872) owing by Drake & Thompson on their joint partnership accounts, due or to become due, or in anywise connected with tbe business of said firm, and save Drake harmless from tbe payment of any and all firm debts and liabilities, of every name and nature, now owing by them in any manner whatever. "Without stopping to inquire whether tbe defendants are liable on tbe clause of tbe condition by wbicb they agree to pay tbe debts due and owing by tbe firm of Drake & Thompson, I propose to consider tbe question of their liability on tbe indemnity clause of tbe condition. Tbe costs,of Puller & Yann, tbe attorneys who procured tbe order of tbe court allowing the plaintiff to appear and answer in tbe action after judgment bad been entered against both tbe partners on tbe patent-right notes, and who subsequently defended tbe action and nonsuited tbe plaintiff, were not a debt due by tbe -firm of Drake & Thompson at tbe time tbe bond was given, but it became a debt due by them when tbe judgment of nonsuit was entered on tbe 16th June, 1871. To entitle tbe obligee in an indemnity bond to recover costs of actions brought against [662] bim for the recovery of copartnership liabilities, he must show that he has paid them, or been in some way damnified thereby. In Churchill v. Hunt (3 Den., 321), it was held that, upon a bond conditioned to save harmless and indemnify the obligee against his liability as maker of a note held by a third person, and to pay the same or cause it to be paid, the obligee may, without having paid any thing, recover the amount of the notes against the obligor upon his failure to pay the holder, but he cannot recover the costs of a judgment obtained against him on the notes when he has not paid them. The costs of Fuller & Yann were due from the firm, and if the plaintiff has paid it, he is entitled to recover. In the following cases it has been held that the obligee in an indemnity bond was entitled to recover on the bond when he had given to a creditor of the firm a promissory note for the demand, which the creditor agreed to receive in payment of his claim against the firm of which the plaintiff was a partner: Witherby v. Mann, (11 Johns., 518); Rodman, v. Hedden (10 Wend., 498); Howe v. Buffalo, New York and Erie Railroad Company (37 N. Y., 297); Doolittle v. Dwight (2 Met., 561); Lee v. Clark (1 Hill, 56). The referee was right in holding that plaintiff had paid the costs so as to entitle him to recover. The appellants’ counsel moved for a nonsuit at the Circuit, and asks for a reversal of the judgment by this court on the ground that the costs sought to be recovered were not a debt against the firm at the time the bond was given. The bond does, in terms, provide that the obligors shall pay the debts of the firm now (at the date of the bond) due or to become due. If the obligors had paid the debts claimed to be due from the firm, the bill of costs in controversy would never have accrued; and it comes with a bad grace from the defendants to refuse to pay the costs occasioned by their own breach of the conditions of the bond. It is true the partners, by defending the action, defeated a recovery on the patent-right notes, and they should the inore cheerfully pay the costs incurred in the defense of the action. The referee was right in holding that plaintiff was not chargeable with fraud in telling, at or before they signed the bond, that the patent-right notes were not a valid claim against the firm. He [663] declared to tbem tbe facts relating to tbe notes, and tbe action brought to enforce tbem, and gaye it as bis opinion that tbe firm was not liable on tbe notes. Tbe defendants bad tbe same means that plaintiff bad to determine tbe question of liability, and was as competent to form an opinion as to tbe legal liability of those who should become sureties on tbe bond. Tbe judgment must be affirmed. Present- — -MulliN, P. J., Talcott and SMITH, JJ. Judgment affirmed.