Fidelity & Deposit Co. of Maryland v. Bassett

• Decision Date: 19 February 1925
• Docket Number: 18844.
• Court: Washington Supreme Court
• Parties: FIDELITY & DEPOSIT CO. OF MARYLAND v. BASSETT et al.

233 P. 325

133 Wash. 77

FIDELITY & DEPOSIT CO. OF MARYLAND v. BASSETT et al.

No. 18844.

Supreme Court of Washington

February 19, 1925

Department 1.

Appeal from Superior Court, Spokane County; Webster, Judge.

Action by the Fidelity & Deposit Company of Maryland against J. D Bassett and others. Judgment for plaintiff, and defendants appeal. Affirmed.

Powell & Herman, of Spokane, for appellants.

Danson Williams, Danson & Lowe, of Spokane, for respondent.

PARKER J.

The plaintiff, a surety company, seeks recovery from the defendants upon an indemnity bond executed by them indemnifying the plaintiff against loss it might suffer by reason of it executing a depositary bond as surety with the Grant County Bank as principal, securing deposits in that bank of the funds belonging to Grant county deposited therein by the treasurer of that county. A trial upon the merits in the superior court for Spokane county sitting without a jury, resulted in findings and judgment awarding to plaintiff recovery as prayed for, from which the defendants have appealed to this court.

Deposits being made and about to be made by the treasurer of Grant county of funds belonging to that county in the Grant County Bank, in pursuance of the provisions of section 5563, Rem. Comp. Stat., the bank as principal, and the plaintiff as surety, executed a bond in the sum of $5,000 to secure such deposits, conditioned, among other things, that the bank 'shall well and truly keep all such sums of money so deposited or to be deposited, and the interest thereon, subject at all times to the check and order of said treasurer, and shall make prompt and faithful payment thereof on checks drawn by such treasurer to the extent of all moneys upon deposit by such treasurer.' At the time of the execution of this depositary bond, and as an inducement for the execution thereof by the plaintiff as surety, the defendants executed the indemnity bond here sued upon, which, after reciting the execution of the depositary bond by the plaintiff as surety, recites the defendants' promise of indemnity as follows:

'Do hereby covenant, promise, and agree with the said Fidelity & Deposit Company of Maryland to indemnify it, and keep it indemnified, from and against any and all loss, costs, charges, counsel fees, and expense of whatever nature or kind, which it, the said Fidelity & Deposit Company of Maryland, might suffer, be put to, or incur, for, by reason of, or in consequence of consenting to, and executing, the said depository bond, or any continuation or continuations of same on behalf of the Grant County Bank.'

While the depositary bond and indemnity bond here in question were in full force and effect, on October 10, 1922, the bank was closed and ceased to do business as a going concern because of its then insolvency; its assets and affairs then passing into the hands of the state bank examiner for liquidation. On December 13, 1922, the plaintiff having become satisfied that at the time of the closing of the bank the county treasurer had on deposit of the county's money in the bank over $50,000, no part of which had been paid, on demand settled with the county treasurer for its liability as surety upon the depositary bond by paying to the county treasurer the full amount thereof. This was done without suit being instituted or...