69 gation. And where a receiver, or those acting for him, fail to exercise ordinary care, and the receiver pays a dividend from an insolvent corporation to a person not authorized to receive it, he is chargeable with the resulting loss to a creditor. A recovery may also be had against a receiver of a water company for injuries sustained by a person after his appointment, and occasioned by the negligent filling in of an excavation by the company and the receiver's failure to put the street in a safe condition and so, even though the appointment was made after such filling in had been done. But where through a railroad company's negligence a passenger suffers death, the receiver is not liable personally therefor." Nor can a recovery be had for the failure of a receiver to maintain proper fences and consequent injury to stock. Nor is a receiver chargeable with losses sustained on the sale of goods at auction under order of court procured by the interested parties. Nor can a recovery be had against a corporation for breach of a receiver's contracts, or for his torts, on the ground alone that it receives the property from him. But a receiver may be liable for a tort committed by the corporation before his appointment."4 § 2109. Recovery by receiver.-The value of property taken from a receiver in an action of replevin, brought against him without the court's permission, may be recovered by him. But a receiver of an insolvent insurance company, which is itself a party to the fraud, cannot recover damages against a bank for false and fraudulent representations as to the company's deposits, thereby inducing the insurance commissioner to certify as to the company's solvency. 67 76 Hays v. Griffith, 85 Ky. 375; 3 | Ark. 322; Metz v. Buffalo, C. & P. R. S. W. 431. Co., 58 N. Y. 61; 17 Am. Rep. 201. 68 Todd v. 38 Atl. 349. 69 Robinson v. Mills (Mont. 1901), 65 Pac. 114. Meding, 56 N. J. Eq. 83; 70 Cardot v. Barney, 63 N. Y. 281; 20 Am. Rep. 533. 71 Schurr v. Omaha & St. L. R. Co., 98 lowa, 418; 67 N. W. 280; 5 Am. & Eng. R. Cas. N. S. 152. See Memphis & L. R. Co. v. Stringfellow, 44 72 Eskridge v. Rushworth, 3 Colo. App. 562; 34 Pac. 482. 73 Missouri, K. & T. R. Co. v. McFadden, 89 Tex. 138; 33 S. W. 853. 74 Combs v. Smith, 78 Mo. 32. 75 Jones v. Moore, 106 Tenn. 188; 61 S. W. 81. 76 Ray v. First Nat. Bk., 23 Ky. L. Rep. 717; 63 S. W. 762. SUBD. VIII. 78 SURETIES, GUARANTORS AND INDEMNITY. 79 § 2110. Sureties, guarantors and indemnity-General rules and decisions.-The same rules of construction apply in determining a surety's liability as in other contracts under a code providing that a surety cannot be held beyond the express terms of his contract." And where money is given to sureties to hold until their liability is discharged, and they agree to surrender the money and take a bond in a surety company, the measure of damages for breach of their agreement is only the expense necessarily incurred in procuring and offering the bond. It is also decided that if subsequent bonds are given and they are cumulative, the sureties on the original bond are not released thereby. The sureties on an undertaking in arrest are not liable, however, for counsel fees in an action after it has been determined that the defendant is not subject to arrest.80 And if before delivery, a note is altered by the principal, without the surety's consent, by increasing the rate of interest, said note being payable to a specified person or bearer, the surety, it is held, will be released from liability. It is also decided that an intentional concealment which operates as a fraud upon sureties on a promissory note will relieve them from liability. So the surrender by the principal of collateral security has been held to release the surety on a note. And if a surety is induced to refrain from taking steps to protect himself by thorough information being withheld by a creditor without sufficient cause or through the latter's giving him false 81 83 77 Northern Light Lodge No. 1, I. | R. 258; 20 Civ. Proc. 218; 13 N. Y. O. O. F. v. Kennedy, 7 N. D. 146; 73 Supp. 899. N. W. 524; N. D. Rev. Codes, sec. 81 Hill v. 4651. S. E. 996. O'Neill, 101 Ga. 832; 28 78 Cook v. Casler, 76 App. Div. 279; release of surety, State Solicitors 78 N. Y. Supp. 661. Co. v. Savage, 39 Fla. 703; 23 So. 413; 82 Jungk v. Holbrook, 15 Utah, 198; 49 Pac. 300. 83 Rye v. Adkins (Tenn.), 46 S. W. 80 Sperry v. Hellman, 37 N. Y. St. 458. 136 2161 84 86 85 89 information, such creditor is liable for the loss actually sustained thereby. The measure of damages, where a mortgage is given to secure a guaranty that a judgment assigned to the mortgagee was valid and it proves invalid, is the amount paid therefor, with interest thereon. And where the safety of a mortgage is guaranteed, and a person advances money thereon, and it is transferred for a less sum, only the difference between such sums can be recovered. But actual damage must be alleged and proved in an action on a contract of indemnity.87 If the contract is to save one harmless on account of a claim, it is decided that the damage does not occur until a recovery is obtained against him by the claimant. Again, the terms of a guarantor's contract measure the extent of his liability which cannot be limited or enlarged by implication. But a person is not deprived of his right to sue on his contract merely because he has an action for damages for the injury sustained, and against which the contract is intended to indemnify him. Again, if the obligor is requested to defend but refuses, the necessary expenses incurred, by the purchaser at an execution sale, in defending the title, are recoverable under an agreement of the executor's creditor to hold him harmless." And where a city has responded under a judgment for damages for personal injuries, occasioned by the negligence of a private corporation, and the former seeks indemnity against the latter, no defense is available to the latter of which it could have availed itself at the original trial, where it was requested to defend and was represented at the trial by counsel who gave advice 84 Benton County Sav. Bk. v. Boddicker, 105 Iowa, 548; 75 N. W. 632; 45 L. R. A. 321. 88 Sherman v. Spalding (Mich. 1903), 9 Det. L. N. 617; 93 N. W. 613. Examine Mamerow v. National Lead 85 Duecker v. Goeres, 104 Wis. 29; Co., 98 Ill. App. 460. 85 N. W. 91. 89 Mamerow v. National Lead Co., 88 Sheers v. Thimbleby (C. A.), 76 98 Ill. App. 460. See Randolph on Commercial Paper (2d ed.), secs. 852, 868. Law T. Rep. 709. 87 Jenckes v. Rice (Iowa, 1903), 93 N. W. 384. As to necessity of proving damage or negligence for which indemnity is sought, see Morton v. Union Trac. Co., 20 Pa. Super. Ct. 325. 90 Gordon v. Stanley, 108 La. 182; 32 So. 531. 91 Cassidy v. Taylor Brew. & Malt. Co., 79 App. Div. 242; 79 N. Y. Supp. 595. and took notes. Generally the indemnified party should not do any act which injuriously affects the rights of the indemnitors under their obligation, except the latter consent thereto; thus a payment by a surety company of a judgment against it without the indemnitor's consent will release them, where such company is indemnified by bond against liability on other bonds. So a guarantor will be discharged from liability by an extension of the time of payment." But a guarantor is held not to be released by a want of diligence in resorting to the principal for he may upon the latter's default look at once to the guarantor for satisfaction. § 2111. Sureties on trustee's bonds.-A surety on a bond is not released from liability for a testamentary trustee's past or prospective misconduct merely because he is required to furnish a new bond by order of court, as such bond is merely cumulative. And if assets are received before the execution of the bond the sureties are liable for the failure of the principal to account there for. But a trustee and his sureties. are not liable for a greater sum than the difference between the amount of the trust fund and a wife's claim, where she has waived payment into court of the amount of the trust fund due her by the trustee. Nor are sureties liable for defaults or breaches of duty committed by a trustee prior to a delivery of a bond conditioned that he faithfully discharge the duties 92 Waterbury v. Waterbury Tract. | See Getty v. Schantz (U. S. C. C. A. Co., 74 Conn. 152; 50 Atl. 3. Wis.), 40 C. C. A. 500; 100 Fed. 577; | * American Surety Co. v. Ballman | Esberg-Buchman L. T. Co. v. Heid (U. S. C. C. A. Mo.), 115 Fed. 292; (U. S. D. C. D. Alaska), 62 Fed. 962. id., 104 Fed. 634. See Byers v. Hick- That demand on principal not preman Grain Co. (Iowa), 84 N. W. 500; requisite to recovery, see German Sav. New York v. Baird, 72 N. Y. Supp. Bk. v. Drake Roofing Co. (Iowa), 83 606; 36 Misc. 68, rev'd 77 N. Y. Supp. N. W. 960; 51 L. R. A. 758. Exam446; Andrews v. Pope, 126 N. C. 472; | ine Randolph on Commercial Pa35 S. E. 817; Buffington v. Bronson, per (2d ed.), secs. 880, 886-893, 61 Ohio St. 231; 56 N. E. 762. 1208-1210. 94 Rushton v. Dierks Lumber Co. (Neb. 1902), 89 N. W. 616. See Randolph on Commercial Paper (2d ed.), secs. 476, 954, 1817 n. 95 Yager v. Kentucky Title Co., 22 Ky. L. Rep. 2240; 66 S. W. 1027. 96 Richter v. 77 N. W. 745. Leiby, 101 Wis. 434; 97 McIntire v. Linehan (Mass. 1901), 59 N. E. 767. 98 Second Nat. Bk. v. Smith, 103 Tenn. 57; 57 S. W. 156. of his office. Again, a judgment for a breach of trust obtained by a substituted trustee against the executrix of a deceased trustee is not evidence against a surety, in an action to recover the sum due by reason of such breach, of the amount of damages sustained thereby.10 § 2112. Sureties on executor's or administrator's bonds -Probate bonds. If there is a breach of her bond by an executrix, in failing to render a satisfactory account, the surety is not relieved, although the heirs stipulated that she need render no account. And money in the hands of an insolvent administrator arising from debts owing by him to the estate are recoverable from the sureties. But a surety on a probate bond is only liable upon the contingency that the principal fails to pay the amount for which he is chargeable. And where a sum of money is received by an administrator as the purchase price of real property forming part of the estate but is not administered, the heirs conveying directly to the purchaser, such money cannot be recovered of the sureties on his bond. And if property comes into an administrator's hands but is not subject to administration, the surety on his bond is not liable therefor.5 § 2113. Sureties on receiver's bonds.-Sureties are liable on a receiver's bond for his failure to pay to himself in that capacity money borrowed by him of the company which he so represents prior to his appointment. And where a receiver fails to faithfully discharge his duty in collecting sale bonds. and distributing the funds under order of court, the sureties are liable therefor. So sureties on a receiver's bond are liable 99 State v. Hunter, 73 Conn. 435; 47 Atl. 665. See also Thomson v. American Surety Co., 56 App. Div. 113; 67 N. Y. Supp. 564, aff'd 170 N. Y. 109; 62 N. E. 1073. 100 Thomson v. American Surety Co., 170 N. Y. 109; 62 N. E. 1073, aff'g 56 App. Div. 113; 67 N. Y. Supp. 564. 2 James v. West, 67 Ohio St. 28; 65 N. E. 156. 3 Shaw v. Humphry, 96 Me. 397; 52 Atl. 798. Johnson v. Hall, 101 Ga. 687; 29 S. E. 37. 5 Jackson v. Wilson, 117 Ala. 432; 23 So. 521. • Commonwealth v. Gould, 118 1 Fuller v. Wilbur, 170 Mass. 506; Mass. 300. 49 N. E. 916. 7 Commonwealth V. Leachman |