Maryland Casualty Co. v. Baune
| Citation | 239 N.W. 598,184 Minn. 550 |
| Decision Date | 04 December 1931 |
| Docket Number | 28,632 |
| Parties | MARYLAND CASUALTY COMPANY v. W. A. BAUNE |
| Court | Supreme Court of Minnesota (US) |
Defendant appealed from an order of the district court for Hennepin county, Nordbye, J. denying his motion for a new trial. Reversed with directions to enter judgment for defendant.
Judgment -- as bar to second cause of action.
Plaintiff as his former surety, seeks indemnity from defendant. If that right ever existed, it is now barred by the judgment in a former action between the same parties wherein plaintiff's present claim was actually litigated and determined by the judgment adverse to it.
George H. Spear and James E. Gardner, for appellant.
Barrows, Stewart, Jackson & Junkin, for respondent.
After decision for plaintiff, defendant appeals from the order denying his motion for amended findings or a new trial.
The suit arises out of three state timber sale permits originally issued to defendant. Plaintiff became his surety for payment of the purchase price. In applying for the bond defendant obligated himself to indemnify plaintiff against any loss by reason of the latter's suretyship. The permits were assigned by defendant to one Stenback. Plaintiff not only consented to the assignment but also became surety for Stenback. It did not issue a separate bond, but agreed in writing "to remain bound unto the said state of Minnesota, for the faithful performance" of the three timber permits "in all respects the same as if" they "had been originally issued to said John Stenback."
After defendant's assignment of the permits to Stenback and plaintiff's becoming surety for the latter as well as for defendant, all annual premiums accruing upon the bond or bonds were collected by plaintiff from Stenback.
Stenback defaulted, whereupon the state sued him, defendant, and plaintiff, and recovered judgment in 1925 for upwards of $3,000. In so far as it exceeded the amount for which plaintiff was liable as surety, defendant as original purchaser of the timber permits has paid the judgment. To the extent of its liability as surety plaintiff also paid. But, claiming as surety the right to subrogation to the remedy of the judgment creditor, it took from the state an assignment rather than a satisfaction of the judgment.
Thereafter, in 1928, there was prosecuted to judgment in the district court of St. Louis county an action wherein defendant was plaintiff and the present plaintiff was defendant. Its sole purpose, accomplished by the judgment, was permanently to enjoin plaintiff, as assignee thereof, from enforcing against defendant, "by execution, levy and sale, or otherwise," the state's original judgment. That judgment in the St. Louis county case is pleaded in bar of this action.
Notwithstanding that action and the judgment for defendant, this suit was later commenced in Hennepin county to recover from defendant on his contract of indemnity, made with plaintiff when the latter became surety for him. The complaint set up the whole matter, from the issue of the permits, through their assignment to Stenback, to the state's judgment and plaintiff's payment of part thereof as required by the terms of its suretyship for both Stenback and defendant. The decision below awards full recovery on that theory to plaintiff.
Defendant all the time remained primarily liable to the state, notwithstanding his assignment to Stenback. The original situation as between Stenback and defendant, and plaintiff as surety for both, and its effect, if any, on plaintiff's rights as against defendant, can be put aside. The judgment in the injunction suit in St. Louis county bars this action.
As surety, plaintiff was entitled to be subrogated to the...
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