Bacon v. Fourth National Bank — 28 N.Y. St. Rep. 151

Majority

p. 151

Alexander S. Bacon, Pl'ff, v. The Fourth National Bank of the City of New York, Def’t.

(City Court of New York, Trial Term,

Filed December 4, 1889.)

Headnote

Bailment—Implied, authority in bailee to incur expense in protecting bailor’s property.

Plaintiff left wiili defendant a mortgage and assignment to be sent to its correspondent in escrow to deliver to one F. on payment of a certain sum. F. procured an attachment and levied it on the papers, and defendant’s correspondent retained a lawyer to defend possession. Held, that the expenditure for legal services was a proper one and within the authority of the bailee, and defendant having paid the same was entitled to recover of plaintiff.

The action is brought to recover $238.60, a balance 'of a deposit which the defendant held to the plaintiff’s credit August 7, 1889. The defendant admitted owing $213.60, paid this amount into court, with the costs and disbursements to the time of payment, and the plaintiff has admitted the sufficiency of the tender. The contest is solely as to the difference between the amount tendered and the demand, viz.: $25, and arises under the following circumstances: The plaintiff left with the defendant to deliver to its correspondent in Boston, the Maverick National Bank, a mortgage for $6,000 and an assignment in blank and an agreement in escrow to deliver to one C. C. Foster or to his order upon payment by him to said correspondent of the sum. of $2,500.

The defendant transmitted the securities to the Maverick National Bank, which institution received the papers and agreed to perform the instructions. While the papers were in the hands of the Maverick National Bank, an attachment was levied upon the papers by Charles C. Foster, and to defend the possession of said securities for the benefit of the plaintiff, the Maverick National Bank retained a lawyer, who rendered legal services in the matter to the value of $25. The Maverick National Bank paid the $25, and the defendant having reimbursed the amount paid, seeks to counterclaim the same as so much money paid to and for the plaintiff’s use and benefit. Though the amount in dispute is small, both parties have treated the principle involved as of importance, a circumstance that invites careful consideration in disposing of it.

Nichols & Bacon, for pl’ff; Bristow, Beet & Opdyke, for def’t

The fees paid to the attorney in Boston were expended under circumstances from which the law implies a request 10 pay for them on the part of the plaintiff. Legal advice and services may be as necessary to protect the property as the aid of a physician or surgeon is to protect life. Neither may prove serviceable in some cases, in others extremely so, depending in a measure on results. Prudence requires their employment in all" cases wherein property or life is imperiled. It would be negligence not to employ professional aid in cases requiring it The result does not determine the propriety of the employment The .condition of things at the time must decide that. A party who

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acts according to the best lights that can be obtained at the moment is not negligent, but discreet. It is elementary, that an agent is not permitted to reap any of the profits of his agency properly belonging to his principal; so, on the other hand, he is entitled to be indemnified against all losses which have been innocently sustained by him on the same account. Story on Agency, §§ 339, 340; Ewell’s Evans on Agency, 473 ; Howe v. Buffalo, N. Y. & E. R. R. Co., 38 Barb., 124 .

The naked depository ought neither to be injured nor benefitted in any respect by the trust undertaken by him. In an emergency he has an implied authority to incur expenses on behalf of the owner for the preservation of the property. Edwards on Bailments, § 66. It is a familiar rule that an agent has the duty of taking-such steps as are reasonably necessary for the protection of his. principal’s interests, and for the preservation of his principal’s property, and that having made outlays for that purpose, he is entitled to reimbursement at the hands of his principal. Story on' Agency, § 335 ; Wharton on Agency, § 314.

. The reason of the rule is that a request on the part of the principal is inferred where the advances are made in the regular course of business, or even on the spur of some pressing urgency not provided for by any rule, since the employer may fairly be taken to have authorized the employed to make the expenditure under any circumstances that a prudent man would conceive necessary for the safeguard of his interest. Smith on Mer. Law, § 169.

In Harter v. Blanchard, 64 Barb., 617 , the rule was applied to the case of a horse who, while in the bailee’s possession, had his leg broken, and it was held that the bailee had, from the nature of the case, an implied authority to contract in behalf of the bailor with a competent farrier for the care of the animal. Indeed, this just rule of implied authority and indemnity pervades the law of principal and agent, and of bailments as well. The expenditure made by the Maverick National Bank was the proper exercise by it of a discretion conferred by the very nature of the transaction j it was reasonable in amount, the services rendered were necessaiy, and there is no principle of justice that requires that it should lose the amount so paid. The expenditure was to protect the plaintiff’s interest in the property; was made for his sole benefit, at a place far distant from his residence, and impliedly at his request.

The expenditure being a proper one was legally authorized., •and is a good counterclaim against the plaintiff, and the cause of action for the balance of his demand having been legally dis*charged by payment into court, it follows that there must be judgment for the defendant, with costs from the time of such payment Dakin v. Dunning, 7 Hill, 30 ; Becker v. Boon, 61 N. Y., 332 .