De Sisto v. Loewy

The jury having determined, upon a conflict of testimony, that the suits brought against the defendant above referred to were brought in due time, the question arises whether the paper writing in question is broad enough to embrace the counsel fees incurred in defending' the same. The sum deposited as aforesaid was in lieu of a bond generally given to indemnify the sheriff, or a constable, or marshal against damages from levy and sale under an execution, and the inference is therefore fairly deducible that the parties intended the rules governing bonds of such character to apply. The said instrument fairly imports an agreement on the part of the defendant to defend any action which may be brought against him by reason of the acts-referred to; and hence the payment of counsel fees therefor was-within the reasonable contemplation of the parties. Aside from these considerations, the language of the instrument in question is? in my opinion, broad enough to cover the counsel fees so incurred. It is similar to that employed in an undertaking given on the granting of a preliminary injunction, and it has frequently been held that the word “damage” included necessary counsel fees paid to secure the' enacting of the same. Edwards v. Bodine, 11 Paige, 223; Aldrich v. Reynolds, 1 Barb. Ch. 613 ; Andrews v. Wool Co., 50 N. Y. 282 ; Hovey v. Pencil Co., Id. 335 ; Disbrow v. Garcia, 52 N. Y. 654 ; Rose v. Post,. 56 N. Y. 603 . The words “damages and costs,” used in an undertaking to procure a warrant of attachment, were held in Northrop v. Garrett, 17 Hun, 497 , to include counsel fees incurred in preparing' for and trying the attachment suit. In Corcoran v. Judson, 24 N. Y. 106 , an injunction bond was given to indemnify the plaintiff for the expense and damage to which he might be subjected by a certain proposed contestation of an award made by the secretary of the treasury, and it was held that counsel fees incurred in the defense of a suit to restrain the payment of such award were recoverable. A bond to indemnify and save harmless against all “actions, suits, costs, damages, and demands whatsoever” in consequence of certain acts was held in Trustees v. Galatian, 4 Cow. 340 , to extend to the costs of defending a groundless suit for an act in which the obligee succeeded. The learned author of the American & English Encyclopedia off Law (volume 10, p. 419), concerning the measure of recovery in indemnity contracts, says: “As part of the damage, the obligee in an express obligation may generally recover any costs to which he has been put, even though the action in which they were incurred was groundless.” While it is apparent by reason and authority that the defendant is entitled to reimbursement for whatever reasonable counsel fees he may have incurred in defending suits brought in consequence off said levy and sale, the court erred in admitting evidence, over plaintiff’s objection, with respect to the amounts paid by the defendant in defending the action now before us, and the previous action between the same parties, which was discontinued, involving the same question. Such charges plainly do not come within the purview of the agreement. As the jury, in rendering their verdict, manifestly included this part of defendant’s claim, the verdict is erroneous, and the judgment must therefore be reversed.

Although not necessary to the decision of this appeal, it may be useful to suggest to the counsel for defendant that he is mistaken in his theory that the defendant is not bound to do anything to bring the action now pending against him concerning the levy to an end. He must be diligent in his defense, and should either bring the action on for trial, or, whenever the situation justifies it, secure its dismissal for want of prosecution. It is manifest that this is a duty which he owes to the plaintiff here, springing out of the nature of the agreement under which the deposit in question was made. . Were it not so, the plaintiff would be at the mercy of the defendant, and the time might never come when the former would be in a position to enforce his rights. In saying this I do not wish to be understood as intimating that the evidence before us, as far as it went, established such lack of diligence, but only that such a line of proof is pertinent to the question of defendant’s liability.

Judgment reversed, and new trial ordered, with costs to appellant to abide the event. All concur.