Case ID: ad_169/html/0656-01.html
Source: Caselaw Access Project
Author: {"author": "Scott, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

George D. Cook, Respondent, v. National Surety Company, Appellant.
    First Department,
    November 5, 1915.
    Undertaking—order of arrest — action against sureties, when premature— appeal pending—damages — expenses of trial and counsel fees.
    No action lies upon an undertaking given to obtain an order for arrest and securing the payment of costs by the plaintiff if the defendant recovers judgment, or if it is finally decided that the plaintiff is not entitled to the order of arrest, where an appeal, taken by the plaintiff from a judgment for the defendant, is still pending and undecided.
    It is only a final determination of the action that establishes the sureties’ liability.
    Where the trial of an action is necessary to vacate an order of arrest, the expenses of the trial are recoverable from the sureties on the undertaking. Such undertaking, being not one to idemnify but to pay, a defendant may recover not only what he has actually paid to his counsel, but also the sums which he is liable to pay.
    Appeal by the defendant, National Surety Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 17th day of March, 1915, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 12th day of April, 1915, denying defendant’s motion for a new trial made upon the minutes.
    
      Stuart M. Kohn, for the appellant.
    
      Cuthbert W. Jewell, for the respondent.
   Scott, J.:

The action is upon an undertaking given to obtain an order of arrest. One Joseph G, Cushman sued plaintiff and-obtained an order of arrest, giving an undertaking executed by defendant in which it agreed that “if the defendant in the action does recover judgment therein, or if it is finally decided that the plaintiff is not entitled to the order of arrest, the plaintiff in said action will pay all costs which may be awarded to the defendant and all damages which he may sustain by reason of the arrest.”

The defendant in that action sought ineffectually to obtain a vacatur of the order of arrest, his motion to that effect being denied by the Special Term, and its order affirmed by this court. (Cushman v. Cook, 159 App. Div. 909.) The action was thereafter tried. On the first trial a juror was withdrawn at the request of the plaintiff. On the second trial the jury disagreed, and on the third trial a verdict was reached and judgment entered in favor of the defendant, the present plaintiff. Thereupon this action was begun. The plaintiff proved, and has recovered as part of his damages, what the jury found to be the reasonable amount of counsel fees incurred by him in his unsuccessful attempts to vacate the order of arrest, as well as in defending the action and procuring the judgment in his favor.

It is settled that when the trial of the action is rendered necessary to dissolve an injunction or to vacate an attachment (and the same rule must apply to an order of arrest), the expenses of the trial are recoverable from the sureties on the undertaking. (Tyng v. Am. Surety Co., 48 App. Div. 240; 69 id. 137, and cases cited.) It is further objected that because plaintiff has not as yet paid his counsel all the fees claimed, he may not recover more than he has paid. The defendant’s undertaking, however, was not one to indemnify, but to pay. The undertaking was that the plaintiff in the action would pay, and the implied undertaking was that if the plaintiff did not pay the surety company would. Under such an undertaking the surety is. liable to pay as well the damages incurred as those actually paid out. (Rector, etc., of Trinity Church v. Higgins, 48 N. Y. 532.)

A more serious objection, however, arises from the circumstance set up in the answer as a separate defense, that an appeal has been taken and is pending, undetermined, from the judgment in the action of Cushman v. Cook, upon which plaintiff relies to establish the liability of the surety company. The fact thus pleaded is not controverted.

The same question arose in Musgrave v. Sherwood (76 N. Y. 194), which was an action upon a bond given upon an injunction. On the trial the complaint was dismissed, thus establishing that the injunction had been improperly granted. An action for damages upon the bond was met by the plea that the judgment had' been appealed from and the appeal perfected as required by the Code. It was held that, until the appeal had been determined, it could not be said that there was a final determination of the action, and consequently no final determination that the injunction had not been properly issued, hence that the action for damages was premature. To the same effect is Brown v. Utopia Land Co., No. 1 (118 App. Div. 190), in which the authorities on the subject are collated, and discussed. It is true that in Musgrave v. Sherwood it is stated that an undertaking on appeal had been given, but this circumstance does not appear to have borne weight in the decision. The controlling fact is that so long as the appeal from the judgment is pending, it has not finally been determined that the order of arrest was not properly granted. In other words, it is the finality of the determination that establishes the Surety’s liability. If an undertaking is necessary to perfect an appeal, then it must be alleged that such an undertaking has been given. No undertaking is necessary, however, to perfect an appeal to this court from the Trial Term, and the only effect of such an undertaking, if given, would be to stay the execution of the judgment appealed from. It would have no bearing upon the condition of the surety’s undertaking.

The inconvenience of any other rale would be very great, for it might happen, as indeed it has happened in this case, that a judgment would be recovered against the surety before the appeal from the judgment had been argued, and thus before it was finally .determined that the order of arrest should not have issued.

It follows that the judgment and order appealed from must be reversed, with costs, and the complaint dismissed, with costs. This of course will not prejudice a new action if and when it shall be finally determined that the order of arrest should not have been issued.

Ingraham, P. J., Laughlin, Clarke and Dowling, JJ., concurred.

Judgment and order reversed, with costs, and complaint dismissed, with costs, without prejudice to a new action as stated in opinion.