Corcoran v. . Judson

The only point made on the argument is whether counsel fees paid by the plaintiff are covered by the words in the condition of the bond, "costs and damages," I cannot doubt that they are. The bond was to indemnify the plaintiff for the expenses and damages to which he might be subjected by the proposed contestation. It was in contemplation of the defendant to institute legal proceedings, thereby subjecting the plaintiff to costs, and the employment of counsel. He would be necessarily damnified in consequence thereof, *Page 108 to the amount he should be compelled to pay such counsel. It was a damage clearly within the contemplation of the act, and of the parties. Sedgwick on Damages (p. 177), lays down the rule that in an action of covenant for breach of warranty, where a former suit has taken place which the covenantee has been obliged to defend, not only his costs but his counsel fees may be recovered in the proceeding on the covenant itself. Edwards v. Bodine (11 Paige, 224), is not unlike the present case. There an injunction master, on issuing an injunction, took from the party applying for it, a bond to the defendant, conditioned to pay the parties enjoined such damages as they might sustain by reason of the injunction. The court dissolved the injunction and decided that the party suing it out was not entitled to the writ. An order was then obtained referring it to a master to ascertain what damages the party enjoined had sustained by reason of the injunction. This proceeding was a substitute for an action on the bond. The master allowed the counsel fees paid by the party procuring the injunction to be dissolved, and this allowance was affirmed by the Chancellor. He says "as the counsel fees are clearly covered by the condition of the bond, I cannot disallow them without depriving the party of a legal right. By the Code (§ 222), when an injunction order is made, it is the duty of the court, or judge making the order, to take a written undertaking, with or without sureties, to the effect that the plaintiff will pay to the party enjoined, such damages not exceeding the amount specified, as he may sustain by reason of the injunction. Under this section of the Code, the practice is universal, to allow the party enjoined as part of his damages, the counsel fees he has been subjected to, in consequence of the issuing of the injunction. In accordance with this rule is the case of Coates v. Coates (1 Duer, 664). The judgment of the Superior Court should be affirmed, with costs.