John Hartman v. Ernest R. Utley, Trustee in Bankruptcy of the Estate of Schroeder & Company, Etc., Bankrupt

BROWNING, Circuit Judge.

I

Schroeder & Company furnished a surety bond to the State of California, pursuant to California Government Code, §§ 4200-4208, to guarantee payment of laborers and materialmen on a public works project for which Schroeder was contractor. Founders Insurance Company, appellant's assignor, executed the bond. In return, Schroeder agreed, among other things, to indemnify Founders against “all loss, costs, damages, expenses and attorneys’ fees” incurred in consequence of its execution of the bond. Nonetheless, Founders’ claim for reasonable attorneys' fees necessarily…