
    Matter of the Application of The United States Fidelity & Guaranty Company, to be Released on the Bond of Arthur F. Cosby, Receiver, Etc.
    (Supreme Court, Appellate Term,
    March, 1906.)
    Bonds — Rights and liabilities of parties — Right of surety to be discharged. (Code Civ. Pro., § 812.)
    Principal and surety — Discharge of surety — Proceedings for discharge under section 812 of the Code of Civil Procedure.
    Under the provisions of section 812 of the Code of Civil Procedure, a surety company is entitled to be released from the bond of a receiver though the receiver has paid to the company a year’s premium and the year has not expired. The unearned premium may be recovered back.
    Appeal from an order of the City Court of the city of New York, denying a motion made by petitioner under section 812 of the Code of Civil Procedure, to be released as surety upon the bond of Arthur F. Cosby, as receiver.
    Leonidas Dennis, for appellant.
    Harry L. Herzog, for respondent.
   Newburger, J.

Section 812 of the Code of Civil Procedure, provides: “The surety or sureties or the representatives of any surety or sureties upon the bond heretofore or hereafter executed, of any trustee, committee, guardian, assignee, receiver, executor, administrator or other fiduciary, shall he entitled as a matter of right to he, and shall be, discharged from liability as hereinafter provided, and to that end may on notice to the principal named in such bond apply to the court that accepted such bond or to the court of which the judge that accepted such bond was a Inember or to any judge thereof, praying to be relieved from liability as such surety or sureties for the act or omission of such principal occurring after the date of the order relieving such surety or sureties hereinafter provided for and that such principal be required to account and give new sureties. Such notice of such application may be served on said principal personally within or without the State, or, not less than five days prior to the date on which such application is to be made, unless it satisfactorily appears to the court, or a judge thereof, that personal notice cannot be given with due diligence within the State, in which case notice may be given in such manner as the court or a judge thereof directs. Pending the hearing of such application the court or judge may restrain such principal from acting except to preserve the trust estate until further order.”

Notice was served upon the receiver, the principal on the undertaking. He appeared by attorney who filed an affidavit stating that he had paid the premium to the surety company for the term of one year and that the year had not yet expired. The court below thereupon denied the motion of the surety company for a discharge from future liability. The motion should have been granted. The surety company was entitled to the discharge as a matter of right; and the mere fact that compensation was received by the company for a period beyond the date of the return of the motion is not a defense, as the unearned premium could be recovered by the receiver upon demand in writing made upon the surety company.

The order appealed from must, therefore, be reversed, with ten dollars costs and disbursements.

Scott and O’Gorman, JJ., concur.

Order reversed, with ten dollars costs and disbursements.  