Home Insurance v. Watson — 8 N.Y. Sup. Ct. 643

Majority

p. 643

THE HOME INSURANCE COMPANY, Plaintiff, v. WILLIAM WATSON and another, Defendants.

Headnote

Attachment — bond—consideration of.

Certain moneys owing by the plaintiff to one Campbell, had been attached by the sheriff, in a suit brought by J. and D. Carolin against said Campbell. Judgment having been recovered in this suit, the plaintiff refused to pay over the money unless it was indemnified. A bond was accordingly executed by the defendants, conditioned to “indemnify, save, defend and keep harmless the said Home Insurance Company from and against the claims of the said James T. Campbell, and of all other persons claiming or to claim the said moneys so paid by the said insurance company to said sheriff, and of and from all costs, damages and expenses that shall or may happen or arise therefrom and the money was paid to the sheriff. Campbell subsequently sued the insurance company for the money, and was defeated, and judgment rendered against him, the costs and expenses of the company, in such suit, being $2,337.91; Campbell being insolvent, this suit was brought upon the bond to recover said amount. Held, that defendants were not liable ; that as to the claim of Campbell, it was established by the judgment of the court, in which he sought to enforce it, that ne had none; and that the costs, damages and expenses included in the judgment, did not arise because of any just and lawful claim, but from the false assertion of one against which the covenant was not intended to indemnify.

Que?'e, whether the bond was not void for want of consideration, as it was the duty of the insurance company to pay over the money to the sheriff upon the recovery of the judgment in the attachment suit.

Ohamib&rlain v. BéU&¡' ( 18 N. Y., 115 ) distinguished

Controversy submitted without action, under section 372, of the Code of Procedure.

The facts are stated in the opinion.

Thomas H. Hubbard, for the plaintiff.

M. Nolan, for the defendants.

The question in this case arises upon a bond executed by the defendants as sureties.

The sheriff of the city and county of New York had attached certain moneys, owing by the plaintiff to one James T. Campbell,

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a resident of South Carolina, in a suit in the Supreme Court of this State, brought by James and Dennis Carolin against said Campbell. The regularity of the proceedings on the attachment is conceded. The indebtedness to Campbell is also admitted.

Judgment had been duly recovered in the attachment suit against Campbell, and execution duly issued. The sheriff on the execution demanded the attached moneys. The plaintiff refused to pay the same to him unless indemnified. The defendants thereupon executed the bond upon which the question now submitted arises, conditioned to “ indemnify, save, defend and keep harmless, the said Home Insurance Company, from and against the claims of the said James T. Campbell, and of all other persons claiming, or to claim, the said moneys, so paid by the said insurance company to said sheriff, and of and from all costs, damages and expenses that shall or may happen or arise therefrom.” Upon the execution of this bond, the insurance company paid over the attached indebtedness to the sheriff, who proceeded to apply the same to the execution and judgment. Afterward, Campbell sued the Home Insurance Company in the city of Charleston, to recover the same indebtedness. The company set up in defense, the suit in New York, the attachment and judgment, and the payment of the indebtedness to the sheriff; and, on this defense, successfully defeated the claim of Campbell, and recovered judgment against him, but were unable to collect their costs, Campbell having become insolvent. The company incurred expenses in defending the suit of Campbell, to the amount of $2,337.91, which are admitted by the statement, to have been reasonable and proper. The question presented, is, whether the plaintiffs are entitled to recover upon these facts, of the defendants, the amount of the penalty of their bond.

It is insisted, first, that the bond is without consideration. At common law, the seal imports a consideration; but, under our statute, the question of actual consideration is an open one, subject to the same inquiry and defense as if the instrument were a simple contract.^[2]

And the admission in the statement, that there was no other consideration for the bond than the forbearance to defend an action to

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recover the attached debt, and the payment, without suit or delay, of so much thereof' as would satisfy the judgment, brings the question whether the consideration was good and sufficient directly before the court. There is no doubt, upon the facts admitted by the statements, that the sheriff was entitled to collect the attached indebtedness, and to receive at once from the company, so much of the money owing thereon, as would extinguish the judgment and his lawful charges. The company had no lawful right to refuse to pay it to him. There was no controversy whatever as to the regularity of the attachment and judgment, nor as to the indebtedness to the judgment debtor; and these facts were not only undisputed at that time, but their existence was subsequently established by the result of the suit in South Carolina. The attachment and judgment were a complete justification and defense of the company’s making the payment to the sheriff; and, indeed, the sheriff had become the assignee and owner, by operation of law, of so much of the indebtedness to Campbell as was paid to him.

The company, in making the payment, did nothing more than the law, at the suit of the sheriff, would have compelled them to do; and the sheriff would have been awarded costs by the law, as his indemnity for the delay and the expense of the suit. It may well be doubted whether the bond is not without lawful consideration ; but, in the view we take of its condition, it is not necessary to determine that question.

No claim appears to have been made to the money by any person except Campbell, the judgment debtor. Upon the facts, before us, the bond must be deemed an indemnity against his claim. He is shown by the result to have had no claim, and it is established that his suit for the indebtedness was nothing but a false clamor, which has been proved to have been groundless, by the judgment of the court in which he sought to enforce it. So far, therefore, as relates to indemnity against Campbell’s claim, there has been no breach of the covenant, for no claim has been established, and none existed which could have been established. But the condition is not only to indemnify against any claim of Campbell, but against all costs, damages and expenses which the plaintiff might suffer by reason of his claim. This is to be construed in con

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sonance with the principal object of the indemnity, which was the claim itself. Where that is shown not to have existed at all, the costs, damages and expenses cannot be said to have arisen because of any just and lawful claim, but because of the false assertion of one. The covenant is not to indemnify against false and unlawful assertions of Campbell, or of the whole world, to tbe indebtedness of the company, but in substance is to indemnify the company in paying the money to the sheriff, if it shall turn out that Campbell, or anybody else, shall establish a better title, and compel the payment to him; and in that event, not only to make good to the company the amount paid to the sheriff, but also all costs, charges and expenses, to which it shall be subjected by reason of the superior title.

Regarding this as the true construction ■ of the condition of the bond, there has been no breach of it, entitling the plaintiff to recover, and hence the defendants are entitled to judgment, with costs.

Chamberlain v. Beller^[2] was upon a bond to the sheriff, under the statute. The sheriff’s jury having been waived, the court held that the bond was within the statute notwithstanding the waiver; and its effect was therefore to compel the sheriff to proceed where he would not at law have been obliged to act; the verdict which was assumed by the waiver being his protection for refusing to proceed until the bond should be given. We do not consider that case to be in point.

Judgment is therefore ordered for the defendants, with costs.

Beady and Daniels, JJ., concurred.

Judgment ordered for the defendants, with costs.

* 18 N. Y., 115 , p. 119.

Footnotes

* 2 R. S., 407, sec. 77.