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Keywords

indemnityappealgood faithpiracy
indemnityappealpiracy

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First Nat. Bank v. Tenney, 43 Ill.App. 544, 1891 WL 2293

Facts

In May 1876, the John B. Jeffery Printing Company owed the First National Bank of Chicago $25,000, secured by judgment notes of the company owned by Emma J. Jeffery. After the company faced financial troubles, Tenney, acting on behalf of the bank and Mrs. Jeffery, entered judgments against the company. A creditor's bill was filed alleging fraud, leading to a decree that found Tenney and others conspired to defraud creditors. Tenney appealed the decree, which was later reversed by the Appellate Court.

In May 1876, the John B. Jeffery Printing Company owed the First National Bank of Chicago $25,000, secured by judgment notes of the company owned by Emma J. Jeffery.

Issue

Did the First National Bank of Chicago have an obligation to indemnify Daniel K. Tenney for expenses incurred in appealing a decree that found him part of a fraudulent conspiracy?

Did the First National Bank of Chicago have an obligation to indemnify Daniel K. Tenney for expenses incurred in appealing a decree that found him part of a fraudulent conspiracy?

Rule

A principal is bound to indemnify an agent against the consequences of all lawful acts done in good faith in pursuance of the authority conferred upon him.

A principal is bound to indemnify an agent against the consequences of all lawful acts done by him in due execution of the authority conferred upon him.

Analysis

The court found that Tenney acted within the scope of his authority as an agent for the bank when he entered judgments and purchased the company's assets. The decree against him was a consequence of his actions taken on behalf of the bank, and thus the bank was obligated to indemnify him for the expenses incurred in appealing the decree.

The court found that Tenney acted within the scope of his authority as an agent for the bank when he entered judgments and purchased the company's assets.

Conclusion

The Appellate Court reversed the Circuit Court's decree and affirmed that Tenney was entitled to indemnity from the bank for his expenses related to the appeal.

The Appellate Court reversed the Circuit Court's decree and affirmed that Tenney was entitled to indemnity from the bank for his expenses related to the appeal.

Who won?

Daniel K. Tenney prevailed in the case because the court ruled that he was entitled to indemnity from the bank for the expenses incurred in defending against the decree.

Daniel K. Tenney prevailed in the case because the court ruled that he was entitled to indemnity from the bank for the expenses incurred in defending against the decree.

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