General Outdoor Advertising Co. v. R. C. Maxwell Co.

Martin, J. In this action the plaintiff seeks to recover the sum of $2,250 on an attachment undertaking given by the defendant R. C. Maxwell Company, on which the defendant National Surety Company was surety, in an action brought in the Supreme Court by R. C. Maxwell Company against this plaintiff. A warrant of attachment was issued in that action and the plaintiff’s property in New York and Kings counties, consisting of bank accounts, was attached. As a condition to discharging the levy under the attachment, the plaintiff paid $889 as premium on a bond and also paid $619 poundage to the sheriff of Kings county, and $627.75 to the sheriff of New York county, a total of $2,136.25. By the terms of the undertaking the National Surety Company agreed that if the plaintiff herein (defendant in the attachment action) should recover judgment in that action, the defendant R. C. Maxwell Company would pay all costs awarded to said plaintiff, and all damages which it sustained by reason of the attachment, not exceeding $2,250. On April 27, 1932, judgment was entered in the attachment action in favor of this plaintiff and against the R. C. Maxwell Company. The plaintiff then brought this action and now demands judgment for the sums necessarily paid out by it in procuring the discharge of said attachment, as the measure of plaintiff’s damages sustained thereby, together with interest. The answer of each of the defendants set up, by way of affirmative defense, a stipulation made by the parties after the decision in the attachment action, in. favor of the plaintiff herein, but before the entry of judgment thereon, by which, in consideration of the waiver by the plaintiff herein “ of its costs and disbursements taxable by the clerk ” upon the entry of such judgment in its favor, defendant Maxwell Company “ waives its right to appeal from such judgment.” The answers further allege that by reason of said stipulation plaintiff waived the items sued for in this action. In reply to said affirmative matter set up in the answers, plaintiff alleges that the agreement of the parties, respecting the waiver of costs and disbursements in the attachment action, is expressed and fully explained in the correspondence annexed to the reply which [446] accompanies the stipulation set up in the answers, by which it appears that the phrase “ costs and disbursements taxable by the clerk ” was used by the parties for the purpose of expressly excluding from the waiver the items of sheriffs’ poundage and bond premium above referred to. The allegations of the answers that defendant Maxwell Company failed to appeal from said judgment in reliance upon the supposed waiver by plaintiff of the items of sheriffs’ fees and bond premium, to recover which this action is brought, are put in issue by plaintiff in its reply to the answers. The claim is made that on May 23, 1932, three days before the Maxwell Company’s time to appeal from said judgment expired, the plaintiff made a formal demand in writing upon both the Maxwell Company and the surety company for the payment of these specific items of sheriffs’ fees and bond premium, pursuant to said undertaking given by them. The plaintiff contends that the sheriffs’ fees and premium paid on the bond given to discharge the attachment are damages within the meaning of the undertaking, and are recoverable in this action on the undertaking. It is also claimed that the plaintiff did not waive the damages sued for in this action, namely, the premium on the bond to discharge the attachment and the sheriffs’ poundage. The defendants, appellants, contend that the damages recoverable in an action on an undertaking on attachment, where judgment in the attachment action results in favor of the defendant, are limited to the items of taxable costs and disbursements; that the plaintiff waived its right to recover the sums paid for sheriffs’ fees and.premium on the bond given to release the attachment; that the stuns paid by the plaintiff for the sheriffs’ fees and bond premiums are not damages within the meaning of the undertaking sued on herein. On motion of the defendants made in the City Court, judgment on the pleadings was ordered and the complaint dismissed. An appeal to the Appellate Term of the Supreme Court resulted in a reversal of the order and judgment of the City Court and a denial of the motion. The defendants have now appealed to this court. Sheriffs’ fees and the premium paid on a bond given to discharge an attachment are damages within the meaning of the undertaking and are recoverable in an action thereon. In the case of Fuerstenberg v. American Soda Fountain Co. (21 App. Div. 501) this court held that the security given in an action by a plaintiff who obtains a warrant of attachment is intended to indemnify the defendant against his costs, disbursements and damages. At page 502 the court said: “It is plain that the security given was altogether inadequate. The condition of the undertaking on the attachment was that if the defendant recovered judgment, or if the warrant was [447] vacated, the plaintiff would pay all costs which might be awarded to the defendant, and all damages which he might sustain by reason of the attachment, not exceeding the sum specified in the undertaking. It is apparent that $250 is no security for the costs which the plaintiff may be called upon to pay if the defendant is successful. The disbursements already necessarily incurred upon the part of the defendant in discharging the attachment exceed the amount of the undertaking. Security upon an attachment is intended to be an indemnity to the defendant against his costs, disbursements and damages, and, as already seen, the undertaking in question by no means secures the plaintiff in the manner contemplated by the Code. We think, therefore, that the motion should have been granted, and the security increased by the sum of $750.” In Brandenstein & Co. v. Castano (283 Fed. 843) the court said: “ The sheriff’s poundage and the premium are certainly to be included in the bond. Today the giving of a surety company bond is a regular course of procedure, a proper incident of every action, and the premium is a cost of the attachment.” In Ives v. Ellis (35 Misc. 333; affd., 67 App. Div. 619) the court said: “ The security to be given in an action by a plaintiff who obtains a warrant of attachment is intended to be an indemnity to the defendant against his costs, disbursements and damages. (Fuerstenberg v. American Soda Fountain Co., 21 App. Div. 501.) The sheriff’s fee of $313 is "unquestionably covered by the bond.” It is interesting to note that the appellants are not contesting the claim of respondent that sheriffs’ fees and bond premiums are damages arising out of the attachment; in fact, the appellants go a step further and say that the sheriffs’ fees are taxable as disbursements. It is clear, in view of the above cases, that the plaintiff is entitled to the damages sought to be recovered on the undertaking. The question now to be considered is whether the plaintiff waived the damages sued for in this action in consideration of the agreement of the R. C. Maxwell Company not to take an appeal. At the close of the trial of the attachment action, upon rendering his decision in favor of the plaintiff herein against the R. C. Maxwell Company, the court suggested that if Mr. Greene, as counsel for the plaintiff herein, should waive costs, Mr. Lamb, counsel for the R. C. Maxwell Company, might waive his right to appeal. Thereafter, and on April 25, 1932, and prior to the expiration of the time within which the Maxwell Company might take an appeal, the attorney for the plaintiff wrote to the attorney for the Maxwell Company. A telephone conversation referred to in the letter took place on the twenty-second of April, three days before the letter [448] was written. The letter is in part as follows: “At that time we discussed by telephone the extent to which my commitment went. I told you that at the time the suggestion was made I had in mind only the ordinary taxable costs, which I then supposed to be in the neighborhood of $125 to $150. Later, I was informed that my client had paid $1,247.25 poundage and $889 for a bond to lift the attachment; and also that the bond given by the Surety Company on attachment was in the sum of $2,250. I stated to you that I did not intend at any time to waive the claim against R. C. Maxwell Company or the Surety Company for damages occasioned by the attachment. To that position I adhere. “ Enclosed you will find a stipulation for the entry of the judgment without taxable costs, i. e., costs taxable by the clerk on entry of judgment, and for the waiver of right to appeal. “ If you now agree with me on the form of this stipulation and will sign it, and also will have R. C. Maxwell Company sign the stipulation and acknowledge it, I will sign the duplicate and enter the judgment accordingly; but this offer is good only until 12:00 o’clock noon on Wednesday, the 27th inst.” On the same day the attorney for the R. C. Maxwell Company accepted the proposition except that he inserted in the stipulation the words “ and disbursements ” after the word “ costs.” The attorney then forwarded it to the president of the R. C. Maxwell Company for signature. It is evident from the foregoing that the parties, through their attorneys, intended that only those costs and disbursements taxable by the clerk were to be waived and that they purposely excluded from the waiver the sheriffs’ poundage and premium paid for the bond. The determination of the Appellate Term should be affirmed, with costs. Finch, P. J., and O’Malley, J., concur; Merrell and Untermyer, JJ., dissent and; vote for reversal.