Grant v. Tefft — 26 N.Y. St. Rep. 102

Majority

p. 102

Hugh J. Grant, Sheriff, etc., Resp’t, v. Erastus T. Tefft et al., App’lts.

(City Court of New York, General Term,

Filed October 3, 1889.)

Headnote

1. Indemnity — Defense—Evidence.

" The fact that defendants were induced to give an indemnity bond by an offer of the sheriff to pay their execution out of the proceeds of sale to be made on a levy under executions in favor of other persons is no defense to an action on the bond, and under such an allegation evidence of conditions qualifying the delivery of the bond is inadmissible.

2. Same — Instructions by indemnitors.

yyhere there are several sets of indemnitors, one of them cannot change

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the nature of their liability by giving to the sheriff a notice not to defend an action brought against him where the others have an interest in the defense thereof and do not consent to a discontinuance.

3. Same — Payment by sheriff.

Payment by the sheriff of a counsel fee for defending an action brought against him is presumptive evidence against indemnitors that the charge, was reasonable.

The action is on a bond of indemnity executed by Tefft,. "Weller & Go., as principals, and. by Andrew J. Shively, Thomas E. Armstrong and Edward H. Branch, as sureties, to the plaintiff,, as sheriff of the county. The bond recites the recovery of a judgment by Tefft, Weller & Co. against Adolph Yon Der Linden for $2,174.73, the issuing of an execution thereon to the sheriff, and that certain personal property, apparently the property of the judgment debtor, was claimed by others. The condition of the obligation was, that the indemnitors were to save, keep and bear harmless the plaintiff against any damage, liability, costs, counsel fees, expenses, suits, actions and the like, that might, at any time, arise, come, accrue or happen by reason of the levying, taking or making sale under such execution of all or any personal property which he might judge to belong to the judgment-debtor, or for or by reason of any action- that might be brought against him on account thereof. There was also in the hands of the sheriff an execution against Yon Der Linden, in favor of Abrar ham Weinberg, for $469.74, and another in favor of John Claflin and others for $3,988.39. In each of these actions a bond of indemnity similar in form, executed by the plaintiffs in said actions as principals and by others as sureties, was given to the plaintiff as sheriff.

A sale of certain property levied on was had, and the various executions were paid in full. James J. Byrne, as general assignee of the judgment debtor, claimed title to the property and brought action against the plaintiff, to recover damages by reason of the levy thereon, and sale, thereof. The action was defended, tried twice, the jury on each trial disagreed, and the action was thereafter-discontinued. The plaintiff paid his counsel for defending that action $1,000, and claimed that Tefft, Weller & Co., were liable to him for $325, their proportion of the fee. The defendants offered evidence tending to show that inducements were offered to give the bond, that conditions accompanied it, and that certain instructions were thereafter given concerning the defense of the action brought by Mr. Byrne.

The evidence offered was excluded, under exception.

The defendants then moved to dismiss the complaint, on the ground that there was no evidence of any levy on behalf of Tefft, Weller & Co., and no proof that the sum paid by the plaintiff as counsel fee was a reasonable and fair charge. The motion - was denied under exception.

The jury, by direction of the court, found a verdict in favor of plaintiff for $325, and from the judgment entered thereon the defendants appeal.

Roscoe H. Channing, for app’lts; David Leventritt, for resp’t.

The relevancy of the testimony ruled out must be determined by reference to the answer of the defendants, .for if relevant it must have been offered to sustain its allegations.

They allege that a levy had been made on the property of Yon Der Linden, under attachments issued in the two suits brought by Weinberg & Claflin, that they, the attaching creditors, had indemnified the sheriff in those actions immediately upon the making 'of the levy, and that the sheriff’s attorneys had represented to Mr. Schell, the attorney for Tefft, Weller & Co., that the sheriff was about to sell the property levied on, and that if they, the defendants, would give the sheriff a bond of indemnity, he would pay the amount of their execution out of the proceeds of the sale about to be made, whereupon they executed and delivered the bond sued upon.

The matter pleaded constitutes no defense. The bond was delivered to the obligee, and parol evidence of conditions qualifying the delivery was inadmissible. Codes v. Barker, 49 N. Y., at p. 110. A bond of indemnity given to the sheriff applies as well to a levy made before the bond was given as to one made afterward, and the obligors in a suit upon the bond are chargeable with knowledge •of the prior levy. Reilly v. Coleman, 1 City Ct. R., 476. The levy made by the sheriff under the prior writs enured to the benefit of the Tefft, Weller & Co. judgment, Crocker on Sheriffs, §§ 413, 442, so that the admission in the answer that a levy had been made under the writs in the cases of Weinberg and Claffin, sufficiently proves a levy under the execution issued on the Tefft, Weller & Co. judgment.

The next defense is, that immediately after the commencement of the action by Byrne against the sheriff the defendants notified the sheriff’s attorneys that they did not wish that action defended. Assuming as we do that ordinarily an indemnifying creditor may give such a direction, in order to save the expense of a useless litigation, the rule cannot be extended to a case like the present, where other creditors have an interest in the defense of such action and do not consent to its discontinuance. The sheriff was sued for the consequences of his levy and sale under all process in his hands and was obliged to justify under all such writs for the joint protection of all the judgment-creditors interested.

True, if the sheriff had become satisfied that the action against him. was well-founded, and that he had no legal defense to it, he might have allowed judgment to go against him by default or even by consent.

But such a judgment would not have concluded the judgment creditors who did not consent to that course from proving that the alleged cause of action on which the judgment was permitted to go pro confessa was without foundation; and in that case the sheriff would have been obliged to pay the judgment himself and have no remedy over on the indemnity bonds given by the objecting creditors.

That the defense interposed by the sheriff to that action was meritorious, is proven by the result. Two trials were had, at both of which the jury disagreed, and the plaintiff therein,

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as a consequence, finally abandoned and discontinued the prosecution. If the action had been allowed to go undefended, as the defendants seem to have desired it to have gone, the recovery against the sheriff could not have been less than the sums collected and paid over, which aggregate $6,232.86, and this without considering the expense connected with the levy and sale. In consequence of the defense by the sheriff, the indemnitors, instead of being called upon to pay their proportionate amount of the damages and costs that have been recovered in the Byrne action, are now called upon to pay only their proportionate share of the $1,000 fee paid for conducting such defense.

When the defendants executed the bond of indemnity they knew that other creditors had issued process against the same debtor; they knew that a levy had been made under these prior writs, and that the creditors issuing them had indemnified the sheriff, and with this knowledge they executed the bond in suit, and became a party to the act of levy and sale, jointly with the other obligors, to such an extent that Byrne could have prosecuted the indemnitors jointly, either with or without the presence of the sheriff as a party defendant Barbour on Parties, 203, 204; Cowen’s Treatise and Practice, § 765; Herring v. Hoppock, 15 N. Y., 409 .

If such an action had been brought, Tefft, Weller k Co. could have allowed it to have gone by default, so far as they were concerned, but they could not have prevented Weinberg & Glaflin from defending the action, nor could they have escaped the entry of a joint judgment against all, for damages and costs, if Byrne had ultimately succeeded. Delatour v. Bricker, 2 City Ct. R., 22.

On principle, Tefft, Weller & Co. stand in no better position now.

They must, so far as that suit is concerned, be considered joint tort feasors with Weinberg & Glaflin. They were in effect sued as such, and their liabilities must be determined with reference to the nature-of that action and its legal consequences.

The defendants assumed this position by their bond of indemnity, and could not change the nature of their liability by the giving of a notice in which the other creditors and indemnitors jointly liable 'with them neither joined nor approved. The evidence as to such notice was, therefore, properly excluded.

The only other" question to be considered is the exception to the refusal to dismiss the complaint, on the ground that there was no evidence that the fee paid by the plaintiff to his counsel, $1,000, was a fair and reasonable charge. In an action against indemnitors, the practical question will always be what the plaintiff was obliged or authorized to pay, both in respect to the principal or incidental costs and expenses. 1 Sutherland on Dam., 135. The plaintiff was authorized, for he was under legal obligation, to pay his counsel a reasonable fee, and this they agreed upon and fixed at $1,000, and the payment of this sum created a legal presumption that it was a fair and reasonable charge. H the plaintiff’s counsel had sued him to recover $1,000, and he had suffered

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a recovery by default, or even consented to judgment therefor, such a presumption would certainly have attached. The court of appeals, in Conner v. Reeves, 103 N. Y., 527 ; 4 N. Y. State Rep., 216, committed itself to this principle, which, in the opinion of the court, Judge Andrews says, “presents a feature not found in .any of our reports.”

In the case cited the court says: “ The bond was given to indemnify the sheriff against suits and judgments to which he should be a party, growing out of that proceeding. The appellants did not make it a condition of their liability that they should have notice. They were satisfied that the sheriff should conduct litigations founded on his seizure of the property, without reserving any right of intervention. They committed the matter to his •discretion, not, indeed, by express words, but by necessary implication. It is true the sheriff was not, in a legal sense, the agent of the sureties to manage suits brought against him, but the sureties agreed that no judgments should be recovered against him therein. They did not limit the indemnity to judgments obtained upon an actual trial or after a contest in court, and they did not undertake to divest the sheriff of the power incident to his position as a party, to settle and adjust litigations instituted against him in view of the exigencies of the situation. It might very well happen that a judgment founded upon a compromise or agreement, with-' out actual trial, would best promote the interest of all concerned.”

The rule is that a judgment recovered after actual trial is conclusive on the indemnitors, while a judgment confessed is presumptive evidence only against the sureties, who are at liberty to show that it was not founded on any liability to the plaintiff in the action, or exceeds such liability. Conner v. Reeves, supra. It follows as a legal sequence that if the sheriff may fix a presumptive liability by suffering a recovery by default or confessing a judgment, he may without incurring the expense of a judgment, confess the liability by payment without a suit, leaving the indemnitors to attack it by proof that it was not founded on any liability, or that the bill paid was excessive in amount, and therefore exceeded the legal liability, or as was said in U. S. v. Behan, 110 U. S., at pp. 345, 346, it will not do to say that the injured party has not been damaged at least to the amount which he has been induced fairly and in good faith to lay out and expend, unless the party objecting “ can show that the expenses of the party injured have been extravagant and unnecessary for the purpose of carrying out the contract.” If the sheriff believed the charge to be reasonable, he was bound to pay it; he had no right, because he had an indemnity, to defend a hopeless action, and put the indemnitors to a useless expense attempting to defend himself against it. See cases cited in Wood’s Mayne on Damages, 134. The condition of the bond was to protect the sheriff not only against actions and judgment, but “counsel fees” incurred in defense of actions as well. The plaintiff relied upon the payment as evidence, and did not therefore plead the reasonableness of the fee paid. The defendants should have attacked the reasonableness of the charge in their answer if they thought the sum paid exor

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bitant, and should have followed it up by proof of its excessiveness at the trial, because the payment was only presumptive, not conclusive evidence of its propriety. If the charge had been attacked by evidence that it was excessive, the plaintiff could only have recovered what was found to be fair and reasonable. Sutherland on Damages, vol. 1, p. 799. The rendition of an attorney’s bill, not paid, is not conclusive evidence of value, even as between attorney and client. Williams v. Glenny, 16 N. Y., 389 . If paid, it constitutes a good accord and satisfaction. Id.

If the sheriff had not paid the bill, the question of value would have been an open one; having paid it, he presumptively did so because he was obliged to pay it, and he simply ran the chance of being compelled to prove its reasonableness, ii first attacked by evidence that it was excessive. It was not so attacked, and the presumption of its accuracy properly prevailed. It will not do to imply that what a person pays in the market for a marketable commodity furnishes some evidence of its value, and to assume that what a client pays his lawyer is of such doubtful character as to require proof, in the first instance, that the latter did not cheat the former by extravagant charges. If a merchant sues for the value of an article, or an artisan or a professional man for his fees, he must, if it be disputed, prove their reasonable value because the price named by the one is disputed by the other; but where the bill is paid by a person acting under a bond of indemnity, it is not going too far to presume in the first instance that the charge made by the one and acquiesced in by the other, followed by payment, carries with it at least the presumption that it was fair, leaving those who desire to question its propriety to attack it by proof to the contrary

Upon the entire record, we are of opinion that no legal error was committed at the trial, and that the direction to find a verdict for $825, the defendants’ proportionate share of the expense incurred and paid in defending the Byrne’s suit, was proper, and that the judgment entered on such direction must be affirmed, with costs.

Nehrbas and McGown, JJ., concur.