Hyperlawhypertext legal database Kiernan v. Agricultural Insurance 74 N.Y. St. Rep. 417

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Kiernan v. Agricultural Insurance

74 N.Y. St. Rep. 417 Court N.Y. App. Div. English

Delivered by HARDIN, P. J.

Contents

Majority

p. 417
William Kiernan, as Executor, etc., et al., App'lts, v. Agricultural Insurance Company et al., Resp'ts.
(Supreme Court, Appellate Division, Fourth Dept.,
Filed March, 1896.)

Headnote

1. Appeal—Discretion.
In equitable actions, where discretion has been exercised as a part of the action of the trial court or of a referee as to costs, the discretion cannot be reviewed at special term. The party seeking to have altered or changed the discretion exercised at the trial term should appeal.
2. Costs—Offer—Judgment.
Where an offer of judgment is made before trial, by defendant, and not accepted by plaintiff, the latter, though the court orders judgment for him, with costs, must pay the costs incurred from the time of the offer, if he fails to obtain a more favorable judgment.
8. Same—Equitable action.
Section 738 of the Code applies to equitable actions.
. A ppeal from an order, made at special term requiring the clerk' of Cattaraugus county to retax and readjust the cost in said action.
Appeal from an order made at the Erie special term in October, 1895, requiring the clerk of Cattaraugus county “to tax and allow the defendant’s costs in this action subsequent to the offer of judgment made by the defendant May 11, 1892, and to retax and readjust the plaintiffs’ costs in this action, and to allow the plaintiffs only such items of costs and disbursements as accrued prior to said offer of judgment, on the 11th day of May, 1892, and to add the same to the damages recovered by the plaintiffs in this action, and from such aggregate to deduct the defendant’s costs and dis
p. 418
bursments as taxed by Mm, and to enter judgment in this action, in favor of the plaintiffs’ and against.-the defendant, for the amount remaining after such reduction.” The issues were brought to trial at a special term in June, 1895; and, among the-conclusions of law, is was found, viz.: “The evidence given upon the trial of this action was not sufficient to justify the court in ordering a reformation of said policy of insurance; and the plaintiffs, upon all the proofs in this case, are not entitled to a reformation thereof.” The court also found, viz.: “The plaintiffs are entitled to recover in this action for the amount of the insurance-upon said personal property in said dwelling bouse, being the sum of $300, with interest thereon from the 18th day of March, 1892; and I direct judgment to be entered accordingly in favor of the plaintiffs, and against the defendant the Agricultural Insurance Company, for the said sum of $300, and interest thereon from March 18, 1892, with costs and disbursements to be taxed.” It appears that on the 11th of May, 1892, the defendant the Agricultural Insurance Company made an offer of judgment to the plaintiffs “to allow judgment to be taken in this action in favor of the plaintiffs, and against said defendant, for $300, with interest thereon from the 18th day of March, 1892, with costs.” The offer was not accepted. Considerable litigation ensued after the offer. See 81 Hun, 373 ; 63 St. Rep. 146 .
E. D. Northrup, for app’lts; A. H. Sawyer, for resp’ts.

It is apparent from the pleadings in the action, as well as from the concessions made by the respective counsel upon the argument, that this was an equitable action. The general rule is that in equitable actions, where a discretion has been exercised as a part of the action of the trial court or of a referee, as to costs, the discretion cannot be reviewed at special term. The party seeking to have altered or changed the discretion exercised at the trial term should appeal. Olcott v. Maclean, 11 Hun, 394 ; Woodford v. Bucklin, 14 Hun, 444 ; McLean v. Stewart, Id. 472 ; House v. Eisenlord, 30 Hun, 90 ; Rosa v. Jenkins, 31 id. 384; West v. City of Utica, 71 id. 540; 54 St. Rep. 991 ; Kahn v. Schmidt, 83 Hun, 541 ; 65 St. Rep. 196 ; Schulte v. Shoe Co., 88 Hun, 226 ; 68 St. Rep. 258 , and cases cited in the opinion at page 229, 88 Hun, and 261, 68 St. Rep. 258 ; Heath v. Banking Co., 146 N. Y. 260 ; 66 St. Rep. 632 . _

_ It is contended in behalf of the plaintiffs that the action of the trial court in awarding costs to the plaintiffs should control, and that the clerk, on presentment of the decision of the trial court, should have taxed a full bill of costs in the action. We think otherwise. Section 738 of the Code of Civil Procedure provides1 that a defendant may, “before the trial, serve upon the plaintiff’s1 attorney a written offer to allow11 judgment to be taken against him, for a sum, or property, or to the effect, therein specified, with costs.” In the case in hand, an offer was made; and, under the

p. 419
language just quoted, the plaintiffs were entitled to costs to the time of the offer. The section further provides that “if the plaintiff, within ten days thereafter, serves upon the defendant’s-attorney a written notice that he accepts the offer, he may file the summons, complaint, and offer with proof of acceptance, * * * and enter judgment accordingly.” The plaintiffs failed to avail themselves of this provision, and they did not accept the offer. ¥e must, therefore, turn to the remaining portion of the section to determine the status of the parties, after the failure of the plaintiffs to accept the offer tendered. The further provision of the section is as follows: “If notice of acceptance is not thus given, the offer cannot be given in evidence upon the trial; but, if the plaintiff fails to obtain a more favorable judgment, he cannot recover costs from the time of the offer, but must pay costs from that time.” The language of the section applied to the case in hand excludes the plaintiffs from the right to .recover costs after the offer was made, inasmuch as the plaintiffs failed “to obtain a more favorable judgment.” It must be- understood that when the court ordered judgment for the plaintiffs, with costs, it was such costs as are authorized by the statute, read in connection with the offer served in the action and the recovery allowed. The further provision of the section also applies a rule as to costs. The words “but must pay costs from -that time” casts upon the plaintiffs the burden of the costs that accrued subsequent to the offer. The words of the section seem sufficiently broad to apply to the case in hand, and to require us to hold that the plaintiffs “must ,pay costs from” the time the offer was served. Such seems to 'have been the result arrived at at the special term.

However, it is contended strenuously by the learned counsel for the appellants that section 738 does not apply to an equitable .action. The learned counsel for the respondents, however, con'tends that the court has no jurisdiction in the matter*, and, in support of his contention, refers us to Bathgate v. Haskin, 63 N. Y. 261 ; Lumbard v. Railroad Co., 62 N. Y. 290 ; Hunt v. Chapman, 51 N. Y. 555 ; Pfister v. Stumm, 7 Misc. Rep. 526 ; Dowd v. Smith, 8 Misc. Rep. 619 ; 61 St. Rep. 333 ; affirmed 80 Hun, 604 . Very extensive -argument is made by the -learned counsel for the appellants to distinguish the cases, and he asserts the conclusion that section 738 does not apply to an equitable action. We think his contention must fail.

The question seems to be expressly adjudicated in Singleton v. Home Insurance Co., 121 N. Y. 644 ; 31 St. Rep. 906 , in which case the section was quoted and construed, and near the close of the opinion it was said:

“We think that the defendant was entitled to its costs against plaintiff arising subsequent to the offer”, on the ground that the plaintiff failed to obtain a more favorable judgment than was offered him. We also think that the direction -of the statute are explicit, and that they refer to actions which are in the nature of equitable actions, as well as the actions at lay.”
p. 420
Reading section 1022 of the Code of Oivil Procedure, as amended to take effect the 1st day of January, 1893, so far1 as it relates to the discretion of the court, in connection with section .738 and section 3262, we think it cannot he held to change the rule laid down in the case of Singleton v. Insurance Co., supra.

The f oregoing views lead to the conclusion that the order made at special term should be sustained. Order affirmed, with $10 costs and disbursements.

All concur.

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