Krach v. Security State Bank

Bronson, J. This is an action to recover damages upon a bond given for a warrant of seizure. In the trial court a verdict was re [443] turned for the plaintiff for $1,195, and from the order of the trial •court denying a motion for judgment non obstante, or for a new trial, the defendant has appealed. The facts substantially are as follows: In January, 1913, the appellant instituted an action to foreclose the lien of its chattel mortgages upon the grain of the respondent, and to recover judgment upon certain promissory notes for which such chattel mortgages stood as security. The appellant procured a warrant of seizure, having filed a statutory undertaking therefor, signed by itself and two sureties in the sum of $1,000. Pursuant thereto on January 15, 1913, the sheriff of Hettinger county levied upon and took into his possession certain wheat and oats belonging to the respondent. Subsequently, upon trial of such action in the district court, judgment was rendered against the respondent herein upon such notes, for the foreclosure of such chattel mortgages and for the sale of the property taken in the warrant of seizure. From such judgment the respondent herein appealed to this court, and this court finally, on January 12, 1917, reversed the judgment of the trial court and remanded the cause, with directions to enter judgment for the appellant herein upon one of the notes amounting to $255, .with interest and costs, and for dismissal of the action in other respects. Security State Bank v. Krach, 36 N. D. 115-119, 161 N. W. 568. Later this action was instituted in August, 1917, upon a cause of action for damages through the conversion of such grain so taken, and the expenses incurred, and also upon the undertaking given hy the appellant herein. Upon the trial of the action in the district court the respondent herein elected to stand upon the cause of action for damages predicated upon such undertaking so given, pursuant to a motion made by the appellant therefor. The appellant in its answer sets up as a counterclaim the judgment secured in the former action, which amounted to $404.72, with legal interest thereon since March 7, 1917. In the submission of the case to the jury, the trial court gave instructions that the respondent was entitled to recover the value of the grain plus legal interest thereupon, and in addition his reasonable attorneys’ fees in defending the former action, less the amount of the judgment in favor of the defendant. The jury accordingly returned this verdict for $1,-195, which means that the respondent must have been awarded damages of approximately $1,600 less the judgment of the appellant. Upon [444] this record the appellant herein challenges the judgment, so entered upon the ground that the verdict as returned exceeded the penalty of the bond, and, further, that the trial court improperly permitted the plaintiff to submit evidence of his attorneys’ fees in defending the former action, and the jury to include in its verdict such attorneys’ fees for so defending such former action. Upon the latter contention of the appellant, we are of the opinion that no error was committed by the trial court in submitting to the jury the reasonable attorneys’ fees of the plaintiff herein expended or incurred by him in defending the former action. The main contention of the appellant in this regard is that it recovered judgment in such action, and that the plaintiff herein should not be awarded attorneys’ fees for defending the main action. This contention is without merit for the reason that it was necessary for the plaintiff to defend the entire cause of action of the appellant in such former action in order to secure the release of this property so seized under the warrant of seizure. However, we are clearly of the opinion that damages could not be awarded upon the cause of action submitted to the jury in excess of the penalty of the undertaking, with legal interest thereupon from the time of the breach of its conditions. The general rule of law, now supported by the weight of authority, and held applicable in this jurisdiction, is that damages may be recovered in excess of the penalty stipulated in such a bond to the extent of the legal interest accruing on such penal sum from the date of the breach of the conditions thereof, as against the principal therein. See 9 C. J. 133; note in 19 L.B..A. (N.S.) 84. This is in harmony with § 7142, Comp. Laws 1913, permitting interest on damages. In accordance with the computations of the parties a total amount of damages that could have been awarded was approximately $1,400. The jury in estimating the damages of the respondent necessarily awarded him, pursuant to the verdict rendered, approximately $1,600. The verdict therefore was excessive. The respondent, however, contends that the judgment of the appellant was not properly to be considered as an offset against the cause of action upon the undertaking, for the reason that the respondent was entitled to a restitution of his property, the same being exempt by law, without any deduction. This contention is without merit. The deduction of such judgment did not serve to take from the respondent [445] any part of his property exempt by statute. If such judgment had not been deducted in this action it might have been offset pro tanto otherwise upon application of the court. Comp. Laws 1913, § 7706; Cleveland v. McCanna, 7 N. D. 455, 41 L.R.A. 852, 66 Am. St. Kep. 670, 75 N. W. 908. The order of the trial court denying a new trial is reversed, and a new trial granted, with costs to the appellant. Birdzell and Grace, JJ., concur.