Assets Realization Co. v. American Bonding Co.

Citations

• 88 Ohio St. (N.S.) 216

Syllabus

<p>Co-suretyship does not exist—Where sureties are bound to same principal on separate instruments—Each bond limiting liability proportionately to total loss by obligee—Collateral given to indemnify one surety—Does not inure to benefit of all, when— Distribution of assets among respective sureties—Law of surety-ship and assignment.</p> <p>1. Where several surety companies are-bound by separate instruments on account of the same principal, and each company, by its bond, limits its liability, in the event of default on the part of the principal, to such proportion of the total loss sustained by the obligee as the penalty named in its bond bears to the total amount of the bonds furnished by the principal to the obligee, the suretyship of each company is a separate and distinct transaction and the relation of co-suretyship among them does not arise, nor does the right of contribution exist.</p> <p>2. Where, in such case, collateral or securities are placed by the principal in the hands of one of the companies to indemnify it against any loss it might incur by reason of its obligation on its bond, none of the other companies, in the event of the default •of the principal, is entitled to any part of such collateral or securities to indemnify it against a loss incurred on account of its bond.</p> <p>3. The principal, indebted at the time to the -obligee on the obligation for which the bonds were required, made an assignment for the benefit of its creditors, and the claim of the obligee against the principal was allowed by the assignee; the several surety companies paid to the obligee the amount of this claim, each company paying the proportionate part of the indebtedness as provided in its bond, and each company taking an assignment from the obligee of its proper fractional share of the claim of the obligee against the principal and its assignee; subsequently a company, other than the surety companies, purchased all the assets, except cash, of the assignor in the hands of