Summary
In Miano v. Empire State Surety Co. (153 App. Div. 423, 425) the Second Department unanimously determined that although the surety had notice but did not defend, such judgment was not evidence against him in cases where the bond was not given to indemnify the principal but was given to indemnify others against the default of the principal.
Summary of this case from Farley v. PattersonOpinion
November 22, 1912.
Louis Diamant and Isaac Siegel, for the appellant.
Benjamin Reass, for the respondent.
Present — JENKS, P.J., HIRSCHBERG, THOMAS, CARR and RICH, JJ.
The question is whether a judgment against the principal in a bond is sufficient evidence against the surety of its liability for breach of conditions that can be asserted only by a third person. The bond was given by one Labriola as principal and the Empire State Surety Company as surety on the condition that they "shall * * * pay to the said City of New York, * * * any loss, damage or injury resulting to persons or property from the use or keeping of such explosives; and for the strict observance of an ordinance, and the regulations made thereunder, to regulate the sale, use and transportation of explosives in the City of New York, passed * * * on May 19th, 1902, under and by virtue of such permit as aforesaid, such payment to be for the benefit of any and all persons suffering damage or loss thereby." The plaintiff, Labriola's servant, was injured by a discharge of a blast, and recovered damages in an action wherein he charged his master with negligence in divers ways. It will be observed that the complaint in the action against Labriola is not limited to acts or omissions that would make a breach of some condition in the bond, but also charges negligence on the part of the defendant and his superintendent in violation of the duty of the master to the servant. It does not appear upon what issue or issues the judgment rests. If it be on the breach of a duty of the master to his servant, the matter may be quite unrelated to the issues in the action at bar. But if it be assumed that the judgment is for a violation of the provisions of the bond and that the surety company has such lawful notice of the action that it could have interposed and defended, even then the judgment is not evidence in the present action. Labriola and the surety company promised through the city of New York that it would pay directly to the plaintiff damages caused him from the use or keeping of explosives by Labriola. ( Obendorfer v. City of New York, 130 App. Div. 877; affd., 198 N.Y. 583.) The bond is for the benefit of the city and those whom it would protect, and not for the indemnification of Labriola by the surety company. Hence the obligors are one and both directly liable to the person injured, and recovery against the principal is not a condition precedent to recovery against the surety. Labriola is the offender, and as between him and the surety is primarily liable to the plaintiff, but both owe the plaintiff the duty of paying his damages. In that case the surety is entitled to its day in court, not through opportunity to interpose in an action against its co-obligee, involving as it happened issues irrelevant to those on which its liability could be predicated. For this authority is found in Berry v. Schaad ( 50 App. Div. 132) ; Loewer's Gambrinus Brewery Co. v. Lithauer (43 Misc Rep. 683). But it is urged that as the surety had notice and opportunity to defend the action against the principal, it is estopped by the judgment against him. This would be the case if the surety company were bound to indemnify Labriola. But the relation is reversed, for Labriola would be bound to indemnify the surety. If one person binds himself to save another harmless, the latter's adjudged obligation measures the latter's liability, or if the wrong of one subject another without his immediate fault to the payment of damages, the result is the same. But in such case the person ultimately liable must have notice and opportunity to contest the liability and damages, or the judgment will be inter alios. Such feature of indemnification of the principal, or ultimate obligation to pay the damages, is present in all the cases on which appellant relies, of which Village of Port Jervis v. First National Bank ( 96 N.Y. 550) and Oceanic S.N. Co. v. Compania Transatlantica Espanola (134 id. 461) are types.
The judgment should be affirmed, with costs.
Judgment unanimously affirmed, with costs.