Indemnity Insurance Co. of North America v. Brennan

A surety company, which executes its bond for an administrator at a premium of fifty-one dollars and fifty cents and requires an indemnity agreement with a clause for payment of its obligation for expense or attorney fees by reason of execution of the bond, is not entitled to payment for attorney fees for supervising, aiding or coercing the performance of duty or making payments required under the law by the administrator. It may not interject itself into the administration of the estate and obtain payment for expense or attorneys’ fees. An attempt to obtain discharge of its bond by requiring the administrator to account does not furnish grounds for such payment. It is only when there is default of performance of his duty under the law by the administrator and bona fide demand upon the surety company of performance of its own obligation under the bond that the surety company may assert liability under the indemnity agreement.

Judgment reversed, with thirty dollars costs, and judgment directed for defendants, with costs.

Hammer and IIecht, JJ., concur; Shientag, J., dissents.

I dissent. I have no quarrel with the general rule of law enunciated by my learned colleagues. The situation here, however, was most unusual; the surety company was compelled to participate actively in the proceedings.