Springfield Nat. Bank v. American Surety Co. of New York

Decision Date03 July 1925
Docket NumberNo. 4285.,4285.
Citation7 F.2d 44
PartiesSPRINGFIELD NAT. BANK et al. v. AMERICAN SURETY CO. OF NEW YORK.
CourtU.S. Court of Appeals — Sixth Circuit

J. E. Bowman, of Springfield, Ohio (Frank W. Geiger, of Springfield, Ohio, on the brief), for appellants.

James I. Boulger and W. R. Pomerene, both of Columbus, Ohio, for appellee.

Before DENISON, DONAHUE, and MOORMAN, Circuit Judges.

MOORMAN, Circuit Judge.

On April 8, 1922, the American Surety Company executed a bond to the state of Ohio, as surety for the Springfield National Bank, to secure a deposit of the state of $50,000 in the bank. On May 20, 1922, it became surety on a bond of $50,000 executed by A. H. Penfield for the faithful performance of his duties as cashier of the bank. Through the frauds of Penfield the bank became insolvent and was closed by the comptroller April 5, 1923. Shortly after the appointment of the receiver the state filed proof of its claim against the bank, which was allowed, and a certificate of allowance issued to the state and assigned by it to the surety company upon the payment by that company of its full liability on the deposit bond. Subsequently the receiver for the bank paid to the surety company about $21,000 on the claim of the state. The difference between the amount so received by the surety and what it paid to the state it claims is a debt due it from the bank which may be set off against its liability to the bank under the bond of Penfield. The lower court sustained the claim.

The recent case of United States Fidelity & Guaranty Co. v. Wooldridge, Receiver, etc., 45 S. Ct. 489, 69 L. Ed. ___, decided May 11, 1925, clearly disposes of the contention that the surety company had the right of set-off as assignee or subrogee of the state. It is contended, however, for the company that a provision in the application of the bank for the bond, by which it agreed to "indemnify and keep indemnified" the surety against any loss sustained on account of the suretyship, brings into existence independent and different rights from those arising under the assignment which may be enforced against its liability on the cashier's bond.

This provision did not give to the surety company any right that it otherwise did not have upon the execution of the bond, for there is always an implied obligation, in the absence of an agreement to the contrary, that the principal will indemnify the surety against loss resulting from the suretyship. This applied to the case just referred to,...

To continue reading

Request your trial
4 cases
  • Federal Deposit Ins. Corp. v. American Surety Co. of NY, 2325.
    • United States
    • U.S. District Court — Western District of Kentucky
    • June 30, 1941
    ...United States Fidelity & Guaranty Co. v. Wooldridge, 268 U.S. 234, 45 S.Ct. 489, 69 L.Ed. 932, 40 A.L.R. 1094; Springfield National Bank v. American Surety Co., 6 Cir., 7 F.2d 44. But this rule does not prevent a debtor of a national bank after insolvency from being subrogated to a claim ag......
  • Willis v. Fidelity & Deposit Co. of Md.
    • United States
    • United States Appellate Court of Illinois
    • January 21, 1952
    ...collateral rights of third persons, lawfully acquired.'' The cases of Mack v. Woodruff, 87 Ill. 570, and Springfield National Bank v. American Surety Co. of New York, 6 Cir., 7 F.2d 44, also support plaintiff's position. In Jenkins v. National Surety Company, 277 U.S. 258, 267, 48 S.Ct. 445......
  • In re Bay State York Co., Inc., Bankruptcy No. 91-10187-JNG
    • United States
    • U.S. Bankruptcy Court — District of Massachusetts
    • May 29, 1992
    ...a setoff under a subrogation theory. With respect to this argument, the Trustee principally relies on Springfield Nat'l Bank v. American Surety Co. of N.Y., 7 F.2d 44 (6th Cir.1925). In that case, the American Surety Company executed two bonds, one as surety for the Springfield National Ban......
  • American Bonding Co. v. Anderson, 7968
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • April 12, 1940
    ...four specified sinking fund accounts. We are of the opinion that the decree is erroneous. In the case of Springfield Nat. Bank, et al. v. American Surety Co., 6 Cir., 7 F.2d 44, 45, a surety company had executed a bond to secure payment to the State of Ohio of a $50,000 deposit in the Sprin......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT