American Sur. Co. of New York v. Sandberg

• Decision Date: 03 July 1915
• Docket Number: 1605.
• Citation: 225 F. 150
• Parties: AMERICAN SURETY CO. OF NEW YORK v. SANDBERG et ux.
• Court: U.S. District Court — Western District of Washington

225 F. 150

AMERICAN SURETY CO. OF NEW YORK v. SANDBERG et ux.

No. 1605.

United States District Court, W.D. Washington, Southern Division.

July 3, 1915

[Copyrighted Material Omitted]

W. C Bristol, of Portland, Or., and Ellis Lewis Garretson, of Tacoma, Wash., for plaintiff.

Bates Peer & Peterson, of Tacoma, Wash., for defendants.

CUSHMAN District Judge.

Plaintiff sues to recover against the defendants on account of an agreement entered into by the defendant Peter Sandberg to indemnify the plaintiff in giving a bond for the performance by the Wells Construction Company of a certain contract for the construction of a dam and canal in British Columbia for the Powell River Paper Company. Plaintiff alleges the bringing of a suit in British Columbia against it upon the bond, that it called upon the defendant Peter Sandberg to defend that action, and that a judgment was obtained in such action against plaintiff in the sum of $13,632.94. It alleges that, by paragraph 10 of the indemnity agreement, set out below, the defendant Peter Sandberg contracted with the plaintiff in the prosecution of the business of the community consisting of the two defendants, and that the community thereby obtained the benefit of the continuance of the business of the Wells Construction Company, and obtained the postponement of payment and discharge of indebtedness of Peter Sandberg and the community estate and business from liability thereon to said Wells Construction Company. Plaintiff asks judgment against Peter Sandberg and Mathilda Sandberg, his wife, to the extent of her interest, whatever it may be, for $25,000 and interest, and the additional sum of $1,449.85 and interest, the latter item on account of plaintiff's expenses in defending the suit against it in British Columbia.

Defendants, by separate answers, deny that either of them or the community formed by them was interested in the Wells Construction Company's contract with the Powell River Paper Company, and aver that Peter Sandberg signed the application for the sole use, benefit, and accommodation of the Wells Construction Company, without consideration to the defendants, or the community, and not in the prosecution of any business of the community. They deny that Peter Sandberg signed the application with any understanding for the postponement of payment or discharge of any debt to the Wells Construction Company. Defendants interpose general denials to other portions of the complaint, and set out the date of their marriage, a description of the community property, and pray for a dismissal of the action, and, in the alternative, that, if judgment be rendered against Peter Sandberg, it be against him individually, and that it be adjudged that the debt is not an obligation of the community, and that it be adjudged that the defendants' property described in the answer is community property not subject to the lien of any judgment rendered.

Plaintiff, in its reply, denies that the defendant Peter Sandberg singed the application for the accommodation of the Wells Construction Company, and avers that he did so for the benefit and profit of both defendants and the community. Plaintiff sets up the recitals of paragraph 10 of the application as representations of the defendant Peter Sandberg that he had an interest in the Wells Construction Company's contract and of the benefit to the defendants of plaintiff's suretyship, by way of estoppel, and alleges that, at the time Peter Sandberg signed the application, the defendants were indebted to the Wells Construction Company to the amount sued for herein. Plaintiff further alleges the giving of notice to Peter Sandberg of the bringing of suit against it in British Columbia, in which notice he was called upon to defend that action, and alleges that the judgment obtained in that action is res adjudicata.

In June, 1910, the Wells Construction Company applied to plaintiff for a surety bond in the amount of $25,000. The application was denied for want of indemnitors. Thereafter, on the 20th of June of the same year, another application was made, signed by the Wells Construction Company and, among other indemnitors, the defendant Peter Sandberg. This application contained the following provisions:

'IV. That the indemnitor will perform all the conditions of said bond, and any and all renewals and extensions thereof, on the part of the indemnitor to be performed, and will at all times indemnify and save the surety harmless from and against every claim, demand, liability, cost, charge, counsel fee (including fees of special counsel whenever by the surety deemed necessary), expense, suit, order, judgment, and adjudication whatsoever, and will place the surety in funds to meet every such claim, demand, liability, cost, charge, counsel fee, expense, suit, order, judgment, or adjudication against it by reason of such suretyship, and any and all renewals and extensions thereof, and before it shall be required to pay the same. * * *

'VI. That in the event of the surety deeming it advisable, or of the indemnitor requesting the surety, to prosecute or defend or take part in any action, suit or proceeding, appeal or writ of error, the indemnitor will, on being advised of the surety's intent so to do, or on making such request, place the surety in possession of funds or securities, approved by it, sufficient to defray any costs, charges, or expenses which it may incur in so doing, and to discharge any liability, order, judgment, or adjudication which may result therefrom, or from its said suretyship. The indemnitor will not ask or require the surety to remove, or join in any application for the removal of, any action or proceeding from the state court to the federal court, in any state where such action would in any way affect the surety's license or right to transact business. * * *

'IX. That, should any claim or demand be made upon the surely by reason of such suretyship, the surety shall be at liberty to pay or compromise the same, and the voucher or other evidence of payment, compromise, or settlement of any claim, demand, liability, cost, charge, expense, suit, order, judgment, or adjudication by reason of such suretyship, shall be prima facie evidence of the fact and of the extent of the indemnitor's liability therefor to the surety.

'X. That the surety also looks to and relies upon the property of the indemnitor, and the income and earnings thereof, and shall also at all times have the right to rely upon, look to, and follow and recover out of the property which the indemnitor now has or may hereafter have, and the income and earnings thereof, for anything due or to become due it, the surety, under this agreement such suretyship having been by the surety entered into for the special benefit of the indemnitor and the special benefit and protection of the indemnitor's property, its income and earnings; the indemnitor being substantially and beneficially interested in the award and performance of such contract and obtaining such suretyship.'

This application was upon a printed form, evidently prepared by the plaintiff. Upon this application, plaintiff executed its bond in the sum of $25,000 to the Powell River Paper Company, conditioned for the indemnifying of that company against any failure on the part of the Wells Construction Company to perform its contract. The evidence introduced shows that the defendants were married in 1894; that all of the real property described in their answers is community property. In view of the terms of paragraph VI of the application above set out, it is not necessary for the plaintiff to prove that it has paid or satisfied the judgment obtained against it in order to prevail.

Plaintiff and defendants have stipulated as to plaintiff's items of expense incurred in defending the suit in British Columbia in the amount of $1,556.20. The effect of this stipulation is to amend the complaint to that extent.

A certified copy of the judgment obtained against it in British Columbia was offered by the plaintiff upon the trial. It was objected to as not properly certified or authenticated. The copy purports to be certified as a true copy by A. B. Pottenger, district registrar. There is impressed upon the copy what purports to be the seal of the Supreme Court of British Columbia. A certificate is attached of David L. Wilber, consul general of the United States of America in Vancouver, B.C., to the effect that A. B. Pottenger is a duly appointed and commissioned registrar of the province of British Columbia. The objection made is that there is no certificate by the consul general, or otherwise, that the signature to the copy is that of A. B. Pottenger. Further, that there is no certificate that A. B. pottenger is the legal custodian of such records and that there is no certificate that the purported seal is the seal of said court.

Section 905, R.S., applies only to the authentication of records of judicial proceedings had in the states and territories. It is conceded that there is no statute providing for the authentication of judicial proceedings in foreign countries. No treaty touching the question has been called to the court's attention. Justice Gray in Hilton v. Guyot, 159 U.S. 113, 228, 16 Sup.Ct. 139, 40 L.Ed. 95, intimates that there is neither statute law nor treaty on the subject of foreign judgments.

The defendants in their answers deny upon information and belief the allegation of the complaint as to the rendition of the judgment by the Supreme Court of British Columbia against the plaintiff. Plaintiff now contends that, the judgment being a matter of public record, the denial is insufficient. Plaintiff did not move against this denial in the answer, but raises the question upon the argument after the...