App. Div.]

First Department, July, 1920.

upon the track and that, but for the negligence of the defendant's employees, the boy would not have been run over.

It seems to be the settled law in this jurisdiction that, notwithstanding a person may be placed in a position of great peril by reason of his own act of negligence, it is the duty of the one operating a railroad to avoid further injury to him if, by the exercise of ordinary care, he is able to do so. In Weitzman v. Nassau Electric R. R. Co. (33 App. Div. 585) the court held that, notwithstanding one is placed in a perilous situation through his own negligence, the railway company owes a duty upon notice to it of the peril to exercise reasonable care to prevent any infliction of further injury to the one in danger. This rule has been recognized in numerous other cases. (McKeon v. Steinway R. Co., 20 App. Div. 601; Kenyon v. N. Y. C. & H. R. R. R. Co., 5 Hun, 479; affd., 76 N. Y. 607.)

The defendant claims that the act of the intestate in attempting to board the train after the gates had been closed and while the car was in the act of pulling out of the station constituted him a trespasser, and that, therefore, he was not entitled to the degree of care due a passenger; and that defendant owed the intestate as he lay upon its track no greater care than if he was a trespasser. Such seems to have been the view of the court in McKenna v. N. Y. C. & H. R. R. R. Co. (8 Daly, 304). In Sheehan v. Nassau Electric R. R. Co. (143 App. Div. 621), where the circumstances were quite similar to those here appearing, the court said: "The justice should have charged that decedent came to his place of peril by his own negligent act, and that the guard owed him no duty as a carrier, save that the law required him to afford such relief, using ordinary skill and judgment, as the occasion reasonably permitted.”

But even if it be assumed for the purpose of this discussion that the defendant owed only such duty toward the intestate as it would owe to a trespasser placed in peril in similar circumstances, that duty would be substantially the same in both cases. In Feldman v. N. Y. C. & H. R. R. R. Co. (142 App. Div. 340; affd., 205 N. Y. 553) it was held in the case of a trespasser that, where a common carrier knew of the intestate's imminent peril from passing trains in time

First Department, July, 1920.

[Vol. 192.

to prevent them from running over her, the company was bound to use reasonable care to save her from such injury.

Applying that rule to the proofs in this case, it seems to us that the testimony unfolded upon the trial required a submission of the case to the jury in order to determine whether or not the defendant exercised that reasonable or ordinary care which would be expected of it under the circumstances. The evidence established that the guard of the train from which the intestate fell was apprised of the accident, but he made not the slightest attempt to save the boy. He did not even take the trouble to ascertain whether the boy was on the track. He could have readily gone to the rear end of the car and signaled the approaching train, which had not then yet reached Fourteenth street, by the use of a red lantern. This witness had previously admitted that when such a red lantern is waved, the motorman in charge of the following train would ordinarily stop his train immediately upon seeing the signal. He changed his testimony upon the last trial by stating that it is a rule that the motorman of an approaching train usually stops a short distance from the place where the lantern is waved. It was for the jury, however, to say which of his two statements was true and whether or not, if he had taken this precaution, the motorman on the train which ran over the boy would not, under such circumstances, have been impressed with the importance of carefully scanning the track in front of him and have discovered the boy's body in time to avoid running over him. When he reached Eighteenth street, he at least should have asked the ticket agent to telephone to the Fourteenth street station and give notice to the approaching train of the danger in which the plaintiff's intestate was. He did nothing of the kind. The two companions of the deceased themselves communicated with the ticket agent at Eighteenth street, who consumed what seemed to be unnecessary time, considering the urgency of quick action, in asking a lot of useless questions, instead of at once putting himself in communication with the Fourteenth street station. That there might have been time to avoid the accident is evidenced by the fact that the witness Wagner, who got off the train at Eighteenth street and ran on the boardwalk alongside of the track, had

App. Div.]

First Department, July, 1920.

nearly reached Fifteenth street before the train ran over the boy.

Respondent also contends that the duty devolved upon the plaintiff to establish that the lad was alive immediately before the train ran over him. There was sufficient evidence on this point, if the jury believed the testimony in that behalf of the deceased's two companions and Mr. Wagner, and of the coroner's physician, who testified that there was no probability of the boy's having been killed by reason of his falling on the track at Fourteenth street. There was abundant evidence to entitle the plaintiff to have the case submitted to the jury. The judgment should be reversed and a new trial ordered, with costs to the appellant to abide the event.

CLARKE, P. J., LAUGHLIN, SMITH and MERRELL, JJ., concur.

Judgment reversed and new trial ordered, with costs to appellant to abide event.

NATIONAL SURETY COMPANY, Appellant, v. FRANK J. FULTON, Respondent.

First Department, July 2, 1920.

Principal and surety

fidelity bond and agreement to indemnify surety against loss thereon provision making proof of payment by surety conclusive when such agreement not against public policy.

Where the defendant for whom the plaintiff had issued a fidelity bond insuring the honesty of the defendant in his employment made an agreement to indemnify the plaintiff and save it harmless from all loss or damage it might sustain by reason of the execution of said bond, a provision in the latter agreement that vouchers or other proper evidence of payment of any claim by the plaintiff for loss or damage in connection with such bond shall be conclusive evidence of the fact and the amount of liability, provided such payment shall have been made by the plaintiff in good faith, is not void as against public policy.

The defendant is liable on such agreement where there is proof of good faith on the part of the plaintiff in paying a defalcation of the defendant.

APPEAL by the plaintiff, National Surety Company, from a judgment of the Supreme Court in favor of the defendant,

First Department, July, 1920.

[Vol. 192. entered in the office of the clerk of the county of New York on the 2d day of February, 1920, upon the dismissal of the complaint by direction of the court at the close of plaintiff's

case.

William R. Page, for the appellant.

Edward N. Perkins of counsel [James Adikes with him on the brief; Rhinelander, Seymour & Barnard, attorneys], for the respondent.

GREENBAUM, J.:

on the

The plaintiff issued its fidelity bond to the general creditors' committee of the Kentucky Refining Company against any loss it might sustain not exceeding $10,000, "by reason of any act of personal dishonesty, forgery, theft, larceny, embezzlement, wrongful conversion or abstraction" part of defendant as an employee of the committee. In consideration of its giving the bond in question and as an inducement therefor, the defendant executed an agreement of indemnity to the plaintiff whereby he agreed that he would indemnify and save harmless the plaintiff from and against any and all loss, damage, fees or expense which it might incur or sustain by reason of the execution and delivery of the said bond or undertaking and to make good and reimburse plaintiff for all sums of money which it might pay or become liable to pay in consequence of such bond or undertaking, and further agreed that the vouchers or other proper evidence showing payment by plaintiff of any claim, demand, loss, damage, fee or expenses in connection with such bond or undertaking should be conclusive evidence of the fact and amount of liability in that respect of defendant to plaintiff, provided that such payment should have been made by plaintiff in good faith, believing it was liable therefor.

The defendant claims that such an agreement is void as against public policy because of the provision "that the vouchers or other proper evidence," etc., "shall be conclusive evidence of the fact and amount of liability." There appears to be no case in this State which has passed upon this precise question. There are, however, eight cases in other jurisdictions

App. Div.]

First Department, July, 1920.

which discuss this form of agreement, four of which hold one way and four another. In the following cases the "conclusive evidence" clause has been held void: Fidelity & Casualty Co. v. Eickhoff (63 Minn. 170, 178); Fidelity, etc., Co. v. Crays (76 id. 450, 455); Fidelity & Deposit Co. of Maryland v. Nordmarken (32 N. Dak. 19; 155 N. W. Rep. 669); Guarantee Co. v. Charles (92 S. C. 282; 75 S. E. Rep. 387). In the following cases it has been held valid: Am. Bonding Co. v. Alcatraz, etc., Co. (202 Fed. Rep. [C. C. A. 1913] 483); Illinois S. Co. v. Maguire (157 Wis. 49); Guarantee Co. v. Pitts (78 Miss. 837; 30 So. Rep. 758); U. S. Fid., etc., Co. v. Baker (206 S. W. Rep. [Ark.] 314).

In Fidelity & Deposit Co. of Maryland v. Nordmarken (supra) the agreement did not provide for any exception in the case of fraud, which would be a sufficient ground for differentiating that decision from the others. In Fidelity & Casualty Co. v. Eickhoff (supra) the case arose on an appeal from an order sustaining a demurrer to the complaint, and the question of the validity of the clause was not involved in the appeal.

The reasoning of the cases in which such "conclusive evidence" provisions were held to be void, seems to be that it is contrary to public policy to permit the bonding party to be the sole judge of the rightfulness of his cause of action and thus oust the courts of their jurisdiction. On the other hand, in Guarantee Co. v. Pitts (supra) the court states that "the expense, delay, trouble and risk of loss to the guaranty company is a sufficient safeguard against an unwarranted payment, and without such a stipulation as complained of here, guaranty companies could not safely do business anything like as cheaply as they do, and to the evident advantage of the parties and of the general public."

It should be noted that most of the cases upholding the validity of such a clause do so only where the payment by the indemnity company has been made in good faith, and hold that it would not be valid to protect it against its own fraud.

In the instant case, the agreement contains the phrase: "Provided that such payment shall have been made by the company in good faith, believing it was liable therefor," thus