National Surety Corporation v. Peoples Milling Co.
| Decision Date | 24 October 1944 |
| Docket Number | No. 239.,239. |
| Citation | 57 F. Supp. 281 |
| Parties | NATIONAL SURETY CORPORATION v. PEOPLES MILLING CO., Inc., et al. |
| Court | U.S. District Court — Western District of Kentucky |
Terrell & Schultzman, of Paducah, Ky., for plaintiff.
Turner & Turner, of Paducah, Ky., for J. D. Coffee and D. G. Childress.
Wheeler & Shelbourne, of Paducah, Ky., for C. S. Thomas, C. H. High and J. T. Rice.
On June 16, 1941, the defendant, Peoples Milling Company, Inc., entered into an agreement with the Secretary of Agriculture for the storage of grain, and at approximately the same time executed in its own name as principal and with the plaintiff, the National Surety Corporation, as its surety a bond to the United States of America by which they covenanted to the Secretary of Agriculture in the sum of $5,000 to faithfully perform the terms of the storage agreement. In order to induce the plaintiff to execute the surety bond, the defendants D. G. Childress, J. D. Coffee, O. Alexander, C. S. Thomas, C. H. High and J. T. Rice executed a third party indemnity agreement by which they obligated themselves to indemnify the plaintiff against any and all liability and damage which the plaintiff might sustain or incur as such surety. In November, 1942, the Commodity Credit Corporation claimed to be damaged in the amount of $3,084.35 on account of certain deficiencies in the quantity and quality of wheat stored in the warehouse under the storage agreement, and demanded of the Peoples Milling Company and the plaintiff the payment to it of said sum. Upon the failure of the Peoples Milling Company to pay the claim the plaintiff made said payment on March 31, 1944. The Peoples Milling Company and the individual indemnitors refused to reimburse the plaintiff and this action followed to recover of them the amount which the plaintiff had paid by reason of its bond guaranteeing the faithful performance of the storage contract.
The defendants, Thomas, High and Rice, filed an answer in which by paragraphs 1 and 2 thereof they moved the Court to strike the complaint as amended and certain portions thereof. In paragraph 3 they claim that the storage contract was invalid id because at the time of its execution O. Alexander, who signed the name of the Peoples Milling Company, was not the general manager of the corporation, and was not authorized to execute said agreement, and that they notified the plaintiff in writing long before the claim was paid that said claim was invalid and should not be paid. By paragraph 4 they allege that approximately 13,000 bushels of wheat was delivered to the Peoples Milling Company in July and August, 1941, which wheat was infested with garlic and foreign matter, and that much of the wheat was high in moisture content, and that by reason of these facts the Peoples Milling Company was not liable for the alleged deficiency claimed by the Commodity Credit Corporation.
The defendants, Coffee and Childress, filed their separate answer, counterclaim and cross-petition. They later moved to dismiss without prejudice the paragraphs attempting to assert a counterclaim and cross-petition. That motion is sustained. This makes it unnecessary to consider the separate motions of D. W. Judd and J. T. Rice to dismiss the counterclaim and cross-petition as against them. To clear them from the record said motions are overruled. The separate answer of Coffee and Childress alleges that the claim of the Commodity Credit Corporation was not a just claim against the Peoples Milling Company, that they notified the plaintiff not to pay the claim, but that the plaintiff disregarded their notice and paid the claim.
The plaintiff has moved to strike the separate answer of the defendants Coffee and Childress, and also to strike paragraphs 2, 3 and 4 of the separate answer of the...
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...the parties. 14. The right to recover under an indemnification agreement is well recognized in Kentucky. National Surety Corp. v. Peoples Milling Co., 57 F.Supp. 281, 282 (W.D.Ky.1944); Fosson v. Ashland Oil & Refining Co., 309 S.W.2d 176, 178 (Ky.1958); United States Fidelity & Guaranty Co......
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...115, 30 U.S. 115, 128, 8 L.Ed. 66; United States v. Hartford Accident & Indemnity Co., 2 Cir., 117 F.2d 503; National Surety Co. v. Peoples Milling Co., D.C., 57 F.Supp. 281; Southern Surety Co. v. Dawes, 161 Ga. 207, 130 S.E. 577; Robinson Clay Product Co. v. Beacon Const. Co., 339 Mass. 4......
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...and contracted for. Also on point are United States v. Hartford Accident & Indemnity, 2 Cir., 117 F.2d 503, and National Surety Corp. v. Peoples Milling Co., D.C., 57 F.Supp. 281. This is also the rule when the statute is declared unconstitutional. State to use of Brontrager v. Mundy, 53 N.......