The FIDELITY & CASUALTY COMPANY of NEW YORK
v.
CHARLES W. ANGLE, Inc., and Charles W. Angle.
No. 593.
Supreme Court of North Carolina.
February 29, 1956.*579 Smith, Moore, Smith & Pope, Greensboro, for plaintiff appellant.
Andrew Joyner, Jr., Greensboro, for defendant appellee.
WINBORNE, Justice.
Admitting the truth of the allegations of fact set out in the complaint in present action, as is done when testing the sufficiency of a pleading challenged by demurrer, the Court is unable to say that in no view of the case the complaint fails to state a cause of action. Hence, error is made to appear in the judgment from which appeal is taken.
As to the first ground on which demurrer is based, that is, that the contract here in suit, not having been executed by plaintiff, did not become binding upon the individual defendant, the demurrant:
From the pleadings and briefs filed in this Court, it seems to be conceded that the contract here involved is an indemnity agreement. Such an agreement usually has only two parties to it, the indemnitor and the indemnitee. New Amsterdam Casualty Co. v. Waller, 233 N.C. 536, 64 S.E.2d 826. And ordinarily it is not necessary for the person indemnified to sign the agreement. 42 C.J.S., Indemnity, § 4a p. 567, Signing. Gushard v. Moyer, 92 Ind.App. 519, 164 N.E. 281; Berlinger v. Bernstein, 102 Pa.Super. 225, 156 A. 548.
Indeed, the text writers, interpreting decided cases, say that the rules laid down relating to signing of contracts generally apply to a contract of indemnity; that signature is not always essential to the binding force of an agreement; that the object of a signature is to show mutuality or assent, which may be shown in other ways; and that "in the absence of a statute", it need not be signed, "provided it is accepted and acted on, or is delivered and acted on." 42 C.J.S., Indemnity, § 4, p. 568, and 17 C.J.S., Contracts, § 62 p. 410. See also Coppersmith & Sons v. Aetna Ins. Co., 222 N.C. 14, 21 S.E.2d 838.
And, in this connection, it is alleged in the complaint in the present case that the defendants executed and delivered to plaintiff the contract of indemnity to induce plaintiff to become surety for the defendant Charles W. Angle, Inc., on certain performance bonds, and relying upon the indemnity agreement, plaintiff thereafter from time to time over a period of nearly sixteen years became such surety for defendant Charles W. Angle, Inc., on numerous such bonds, including the three specifically described.
These allegations would seem to be sufficient to admit of an inference that plaintiff, as indemnitee, accepted and acted on the indemnity contract on which this action is based.
Now as to the second ground on which the demurrer is based, that is, that the liability of demurrant to plaintiff, if any, is strictly that of indemnitor, and the amount of loss, if any, resulting from the matters and things of which complaint is made, has not been determined, and, hence, a cause of action does not now lie against him:
In this connection in 27 Am.Jur. p. 469, the author declares: "The necessity for actual damage to the indemnitee as a condition to the liability of the indemnitor depends upon the terms or conditions contained in the contract, actual damage being required in the case of strict contract of indemnity against loss or damage, and none in the case of an indemnity against liability. It therefore becomes necessary to distinguish between strict indemnity and indemnity against liability * * *. It has been generally observed that a contract which simply indemnifies, and nothing more, is against loss or damage only, whereas a contract which binds the indemnitor to pay certain sums of money or perform other acts which will prevent harm *580 or injury to the indemnitee is one of indemnity against liability. Contractors' bonds requiring payment of claims for labor and material and obligating the contractor to perform as agreed in the contract are quite generally of the latter type. A single contract may, however, indemnify against both actual loss or damage and liability."
These principles are accordant with decisions in this State. And the rule as to accrual of cause of action is stated in Hilliard v. Newberry, 153 N.C. 104, 68 S.E. 1056, 1057, by Hoke, J., speaking for the Court, in this manner: "On the question presented, the authorities are to the effect that, when a collateral obligation is in strictness one of indemnity, an action at law will not lie unless and until some actual loss or damage has been suffered, but, when the obligation amounts to a binding agreement to do or refrain from doing some definite, specific thing materially affecting the rights of the parties an action will presently lie for breach of such an agreement, and no damage need be shown", citing Burroughs v. McNeill, 22 N.C. 297, and quoting from 16 A & E 179, Pingrey on Suretyship and Guaranty, Section 182. See also these cases: Clark v. Bonsal & Co., 157 N.C. 270, 72 S.E. 954, 48 L.R.A.,N.S., 191; Orinoco Supply Co. v. Shaw Bros. Lumber Co., 160 N.C. 428, 76 S.E. 273, 42 L.R.A.,N.S., 707; Town of Lumberton v. Hood, 204 N.C. 171, 167 S.E. 641; Boney v. Central Mut. Ins. Co., 213 N.C. 470, 196 S.E. 837, 117 A.L.R. 231; Lackey v. Southern R. Co., 219 N.C. 195, 13 S.E.2d 234; New Amsterdam Casualty Co. v. Waller, supra.
Applying these principles to the indemnity contract under consideration, it appears that the language used is sufficient to support an action on indemnity against actual loss or damage, or an action on indemnity against liability, or on both. Hence the allegations of the complaint are sufficient to withstand the demurrer.
For reasons stated, the judgment from which appeal is taken is hereby
Reversed.