N. Welding Co. v. Jordan

• Decision Date: 22 July 1921
• Docket Number: 22223.,Nos. 22222,s. 22222
• Citation: 150 Minn. 12,184 N.W. 39
• Parties: NORTHERN WELDING CO. et al. v. JORDAN et al.
• Court: Minnesota Supreme Court

150 Minn. 12

184 N.W. 39

NORTHERN WELDING CO. et al.

v.JORDAN et al.

Nos. 22222, 22223.

Supreme Court of Minnesota.

July 22, 1921.

Appeal from District Court, Hennepin County; Wm. E. Hale, Judge.

Action by the Northern Welding Company and another against L. E. Jordan and others. Judgment for plaintiffs, and all the defendants appeal; defendant Jordan appealing separately from an order denying new trial. Affirmed.

Syllabus by the Court

A contract which in plain terms obligates one party to save another harmless from any and all claims is not limited by an especial reference to particular claims. Where language is unequivocal, rules of construction have no application.

A contract to indemnify against claims on account of contracts, not intended to indemnify against subsequent breaches generally, may apply to subsequent breaches arising out of acts of an agent under a contract previously made authorizing him to perform such acts.

Whether it was the duty of the party indemnified to violate the contracts with its agents in order to mitigate damages is to be determined by the test whether a reasonably prudent and diligent person would take such a course.

Where an indemnitor is under obligation to defend against a claim and defense is tendered and refused, the indemnitor is liable for the reasonable expense of the defense. George S. Grimes, of Minneapolis, for appellants.

Kingman, Cross, Morley & Cant, of Minneapolis (McDowell & Fosseen, of Minneapolis, of counsel), for respondents.

HALLAM, J.

On April 9, 1913, E. B. Teeple was doing business at Minneapolis under the name of Vulcan Process Company, and on that day sold to the Lewistown Iron Works of Lewistown, Fergus county, Mont., a Vulcan welding apparatus and equipment and by the contract of sale agreed-- ‘to protect the Lewistown Iron Works for the county of Fergus, Mont., on our apparatus that we shall sell him, and guarantee not to place any other apparatus in said county without their consent.’

In June, 1913, defendant Jordan acquired a partnership interest in the business of the Vulcan Company. In July, 1913, the Vulcan Process Company was incorporated and took over all the property and assumed all debts, liabilities, and obligations of Teeple and of the partnership. Teeple and defendant Jordan were directors and officers and actively engaged in the management of the corporation.

In February, 1914, the corporation, through its jobbers, sold a Vulcan welding apparatus and equipment to Herbert McHardie, a blacksmith in Fergus county, Mont. In April, 1915, the Lewistown Company sued the corporation for damages for breach of its contract because of the sale to McHardie. In January, 1916, it recovered a verdict for $4,200.

In 1915, Teeple retired and Jordan became the active manager of the corporation. In January, 1916, defendants H. A. and J. C. Hallum and Burrows purchased stock in the corporation and in March, 1916, defendants were the owners of practically all the stock of the corporation. In March, 1916, defendants sold their stock to the Northern Welding Company. This company had for some time been manufacturing the product, the Vulcan Company selling it. A contract was entered into between the Northern Welding Company, party of the first part, the Vulcan Process Company, party of the second part, and defendants, parties of the third part. The contract contained this stipulation:

‘Third parties hereby agree also that in further consideration of the covenants herein contained, they will at all times assume full liability for and save first and second parties harmless from any and all claims or damage suits on account of any contract or agreements made by or for second party, or by any of its agents, officers or employés, for second party, prior to the date hereof (especial reference being had to a disputed account for twenty-one hundred and sixty dollars ($2,160.00) with the Presto-O-Lite Company of Indianapolis, Indiana, a verdict for forty-two hundred dollars ($4,200.00) secured by Lewistown Iron Works of Lewistown, Montana, against second party, and certain claims made by the Canadian Government for certain duties in reference to goods sold to the Auto-Lite Gas Company of Winnipeg, by second party).’

In June, 1916, the verdict of $4,200 in favor of the Lewiston Iron Works was set aside and a new trial granted. In July, 1916, the Lewistown Iron Works brought a second action against the Vulcan Company for seven other breaches of the same contract, arising out of sales of apparatus to seven other concerns in Fergus county, on dates as follows: June 1, 1915; June 5, 1915; August 1, 1915; January 15, 1916; May 15, 1916; June 15, 1916; June 20, 1916.

This action was consolidated with the first one and a verdict recovered for $4,600. Judgment was entered and the judgment paid.

In March, 1917, the Lewistown Iron Works commenced a third action against the Vulcan Process Company for five violations of the contract of April, 1913; resulting from sales on the following dates: October 7, 1916; November, 1916; December 1, 1916; December 5, 1916; January 30, 1917. Judgment was given for plaintiff for $1,885.82, and this was paid.

The trial...