Case Name: Hoard against Garner
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1851
Citations: 10 N.Y. 261
Docket Number: 
Parties: Hoard against Garner.
Judges: 
Reporter: New York Reports
Volume: 10
Pages: 261–268

Head Matter:
Hoard against Garner.
A party covenanting “ to take proper means ” for the collection of a bond and mortgage, is responsible for the laches of every agent employed by him in proceedings for the collection.
The covenantee can recover any damages incurred from delay in the prosecution of a suit to foreclose the mortgage, though the covenantor employed a solicitor in good standing, whose delay resulted from an error of judgment, excusable as between himself and his client.
This was an action of covenant, commenced in 1847. The declaration set forth that on the 31st of October, 1843, one C. W. Adams and wife executed to the plaintiff a mortgage of one equal undivided fifth part of a farm on Staten island, being Mrs. Adams’ share of such real estate as one of the children and devisees of Isaac Cubberly, who died seised thereof. The mortgage was given to secure the plaintiff against any liability on two promissory notes made by the plaintiff and Adams, under the name of C. W. Adams & Co., Adams having received the value of such notes, and agreeing to pay them. One of these notes was for $576.78, dated October 13, 1843, payable in eight months, in favor of Hugh Auchincloss & Sons; the other for $600.31, dated October 14, 1843, payable at ninety days, to G-arner & Co. The mortgage was also conditioned for the payment of a bond for $500, with interest, executed by Adams to the plaintiff at the date of the mortgage, and payable one year after date.
The declaration then set forth an absolute assignment of the bond and mortgage by the plaintiff to the defendant on the 31st of January, 1844, which recited the purposes for which the mortgage was given, and that G-arner had given up to the plaintiff the note of $600.31, held by Garner & Co., and that thereupon the defendant covenanted with the plaintiff as follows: “ To take proper means to collect the amount due and secured to be paid by the said indenture of mortgage, so assigned as aforesaid, and to appropriate the amount which may be collected after deducting all necessary expenses, as follows, viz.: in the first place, to retain the amount of the said note so given to Garner & Co. as aforesaid, with interest thereon from the time the said note became due and payable; in the second place, to pay unto the said Hugh Auchincloss & Sons, if there shall be sufficient for that purpose, the amount of the said promissory note, so given to them as aforesaid, and the interest which may be due thereon; and lastly, if there shall be sufficient for that purpose, to pay unto the said John W. Hoard the amount of the said bond or obligation so given to him as aforesaid, and the interest which may be due thereon.” The breach assigned was the omission by Garner to take proper means to collect the amount due upon the mortgage. The defendant traversed the breach-in various pleas, on which issues were joined.
Upon the trial, in February, 1849, before Mr. Justice Sand ford, of the superior court of New-York, it was proved that in September or October, 1844, the defendant employed Mr. C., a solicitor o£ competent skill and knowledge, to file a bill for the foreclosure of the mortgage. Such a bill was accordingly filed soon afterwards, against Adams and wife and other defendants, and the action for foreclosure was still pending at the time of the commencement of this suit. This delay in the prosecution of the former action, the defendant attempted to account for and excuse by the following facts:
Previous to filing his bill, Mr. C. had made proper searches, but the clerk of Richmond county, where the land was situated, omitted to mention in the certificate of search furnished by him, a trust deed then on record from Adams and wife, dated February 4, 1843. By this deed the grantors conveyed all the -real estate to which Mrs. Adams was entitled as devisee of Cubberly, embracing the mortgaged . premises to John Q. Day, in trust for her separate use, free from the control and exempt from the debts of her husband. On the 4th of September, 1843, Alfred Adams was substituted as trustee in the place of Day, and on the 2d of April, 1844, Joseph G-. Gilbert was substituted in the place of Adams. Of this trust deed Mr. C. had no knowledge at the time of filing his bill for foreclosure; but Day and Alfred Adams were made defendants as claiming some interest in the mortgaged premises, without his knowing the nature of their claim. C. W. Adams put in' an answer on the 10th of December, 1844, and from that answer Mr. C. first ascertained the existence of the trust deed. Mr. C. testified that after the answers all came in and the cause was ready for hearing, he entertained very great. doubts, founded upon the trust deed, whether the plaintiff could succeed; and that he was deliberating upon •the subject, and making some examinations for the purpose of seeing whether the trust deed could be successfully attacked. In March, 1845, Mrs. Adams and Gilbert, the trustee, filed a bill for the partition of the real estate of which her father died seised; among other things setting forth the mortgage to Hoard and the assignment from Hoard to Garner, charging that the mortgage was not a valid lien upon the land, and praying that it might be so declared. This bill was served on Mr. C., as solicitor for Garner, on the third of May. No answer was put in on behalf of Garner, there being an understanding between him and the plaintiff’s solicitor that it might be put in at any time. Mr. Sedgwick was soon after substituted as solicitor for Garner, a,nd had the principal management of that suit. In June, 1845, the bill of foreclosure was dismissed as to Day and A. Adams for want of prosecution, and it then became necessary to amend the bill and file a supplemental bill, which was done in August, 1847; the mortgaged premises having in the meantime been sold by the executors in per suance of a power in the will. The supplemental bill set forth that sale, alleged that the executors had in their hands money and securities, being the share of Mrs. Adams in the purchase money, and prayed that such money and securities might be applied on the mortgage to Hoard.
The cause was ready for hearing as to all the defendants in the summer of 1845, but no proofs were ever taken, and the cause was never noticed for a hearing until January term, 1849. It appeared that the state of the calendars and the amount and course of business in the courts, at the time the foreclosure suit was commenced and while it was pending, was such that the cause might probably have been heard within a year from the time of being placed on the calendar; and that by filing a replication in that suit, which was never done, the plaintiff would have entitled himself to put the cause on the calendar of the assistant vice-chancellor, which would have expedited the proceeding. It also appeared that the solicitor of the defendant in this action was not informed of the covenant between him and the plaintiff for the collection of the mortgage, and that the reason for his delay was doubt as to the result of the suit, there being á very nice question under the statute of trusts arising upon Mrs. Adams trust deed, which was determinable in the suit brought by her and Gilbert, to which the plaintiff and defendant in this action were parties. There was also a third chancery suit pending, involving the same question. He thought the whole fund would be used up in expenses if they all proceeded, and therefore suspended proceedings in this suit till the others were dismissed in May, 1847.
The court refused to charge in accordance with several propositions submitted by the defendant’s counsel, and charged as follows: That the defendant was bound by his covenant to use reasonable diligence in the institution and prosecution of proceedings necessary to collect the amount due and secured to be paid by the mortgage, so far as the plaintiff had an interest in the proceeds; and if unreasonable delay was, before the commencement of this suit, suffered to take place in that respect, whether the delay was the consequence of his own negligence or the omission of his solicitor to go on with the proceedings, the defendant is liable for a breach of his covenant. If the jury came to the conclusion that such unreasonable delay had taken place by the act or omission of the defendant or his solicitor, their verdict would be for the plaintiff, otherwise for the defendant. Other instructions were given upon the question of damages in case of a verdict for the plaintiff, “to all of which charge and refusal to charge as aforesaid” the defendant’s counsel excepted. The jury found for the plaintiff for $2000, subject to adjustment and subject to the opinion of the court upon the whole case. The court at general term (3 Sand/. S. C. R., 179) ordered judgment upon the verdict, fixing the damages at $1074.51. That part of the opinion of the superior court, by Sandfoed, J., which relates to the question is as follows:
By the court, Sandford, J.
Whatever might have been our view of the effect of the defendant’s covenant, if it had been an open question, we are required by the authority of the case of Allen v. The Merchants’ Bank (22 Wend., 215), in the court for the correction of errors, to give our judgment for the plaintiff. It was there settled that on the deposit of a bill of exchange with a banker residing here, for collection in another state, where it was payable, the banker was liable to the holder for any neglect or omission of duty in respect to such collection on the part of his agent or the notary employed by him in the foreign state.
The principle established was, that the implied contract of the banker was an undertaking to do the thing itself, and was not the delegation of an agent or attorney to procure the thing to be done. That the contract looked mainly to the thing to be done, and his undertaking was for the due use of all proper means for its performance; and it was not a contract only for the immediate services of the agent, and his acting faithfully as the representative of his principal. That in the latter case the responsibility ceases with the limits of the personal services undertaken; in the other it extends to cover all the necessary and proper means for the accomplishment of the object, by whomsoever used or employed.
In the case at bar, the defendant, for a valuable consideration, undertook the collection of a bond and mortgage. He covenanted in express terms “to take proper means” to collect the amount secured to be paid by them; and he is therefore clearly responsible that such means should be taken by every person whom he employed to execute his covenant.
The retainer of a competent solicitor was undoubtedly a proper step to be taken, and as far as it went was a compliance with the contract. But the responsibility did not cease there; and if the solicitor failed to pursue the proper means for collecting the securities, the defendant must answer for his default.
It was contended that proper means were taken in this case; that the long delay which occurred was the result of no oversight on the part of the solicitor employed; in his judgment, it was inexpedient to proceed under the circumstances; and his course was the true one.
■ The good faith of the solicitor is not impeached. This, however, did not satisfy the covenant; nor did the exercise of his judgment, if that judgment were wrong and caused unreasonable delay. We have considered the question with more than usual care and deliberation, and we cannot resist the conclusion, that the course pursued by the solicitor was unwise, and in respect to the defendant’s duty to Hoard was entirely unwarrantable.
No good reason is shown why the foreclosure of the mortgage was not commenced immediately after the defendant received it. Passing by the nine months thus lost before pro ceedings were instituted, in December, 1844, the solicitor became fully informed of all the difficulties in the case, by the answer of Adams and wife. He should then have brought Mrs. Adams’ trustee before the court at once by an amendment of his bill. If this course had been pursued, the bill afterwards filed by Mrs. A. and her trustee would never have been exhibited, or if exhibited, it would have been no more than a cross-bill in the foreclosure suit, disposable either summarily by a demurrer or more deliberately, by being carried forwai’d with the original suit.
Whether Mrs. A.’s bill had been filed or withheld, if the original suit had been pressed on with ordinary diligence, after the receipt of the answer of Adams and wife, there is no doubt that it would have been brought to hearing, and a decision obtained before 1846. Even after the bill of Mrs. A. and her trustee was exhibited, the defendant could have expedited either the one suit or the other, and brought the matter to a conclusion. But he did neither. He was entirely passive from December, 1844, until after this suit was commenced, a period of more than two years and a half. It is said the marriage settlement of Mrs. Adams presented a doubtful and difficult question. If it did, there was the more reason for urging on the suit, because a greater delay would be inevitable if the suit were to be litigated.
Without dwelling upon the subject, it suffices to say that proper means were not taken by or in behalf of the defendant to collect the bond and mortgage, and he is liable for a breach of his covenant.
The cause was argued here by
Daniel Lord for the appellant, and
Charles H. Smith for the respondent.

Opinion:
Foot, J.,
delivered the opinion of the court.
My understanding of the covenant is, that the appellant was to take proper means, both for himself and others, to collect the amount of the mortgage. If he omitted for an unreasonable length of time to cause proceedings for foreclosure to be commenced; or if he employed an incompetent solicitor to commence and prosecute them; or if the proceedings, after being commenced; were unduly delayed by his own negligence, or that of his solicitor, his covenant was broken; for in each case, the proper means would not be taken to collect the money. The charge on this branch of the controversy, appears to me to be substantially right.
My impression from an examination of the evidence is, that the charge gave the jury too great a latitude on the subject of damages, but the exception is not sufficiently specific and pointed to reach the error, if one was committed.
Judgment affirmed.