Max M. Hayden, Trustee, Etc. v. Standard Accident Insurance Company

This appeal is from an order of the United States District Court, Southern District of California, affirming an order of a referee in bankruptcy. Jurisdiction is conferred on this court under the provisions of 11 U.S.C. § 47 , sub. a.

The facts are not in dispute. On or about November 25, 1959, appellee became surety upon a cattle dealer’s bond in the penal sum of $20,000 with Forrest Dale McCulloch, bankrupt herein, as the principal thereon. As a part of the transaction in which appellee became surety McCulloch agreed in writing to “indemnify and save the surety harmless from demands, losses, costs, damages and expenses” which the surety might incur by reason of the issuance of the bond, McCulloch was adjudicated bankrupt on December 28,1960. Prior thereto and on or about August 26, 1960, Valley Livestock Marketing Association had commenced an action against McCulloch for the recovery of the purchase price of cattle purchased by McCulloch, and against appellee for the recovery of the penal amount of the bond in the sum of $20,000. On June 13, 1961, the court ordered the discharge of appellee from the action on condition of its payment into court of the said penal sum of $20,000.…