Court Opinion

ID: 8744632
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:02:12.51657+00
Date Added: 2024-06-11T17:00:35.840356
License: Public Domain

SHELBY, Circuit Judge
(dissenting). This action was brought by the t. Bucki & Son Lumber Company, a corporation under the laws of New Jersey, against the Fidelity & Deposit Company of Maryland, a corporation under the laws of Maryland, to recover damages upon two attachment bonds executed by the latter company as surety. For brevity the former company will be called the “Bucki Company,” and the latter the “Fidelity Company.” A brief statement of the facts which led to and are involved in the litigation will be necessary: On the 1st day of October, 1897, the Atlantic Lumber Company sued out a writ of attachment for $9,980.80, and caused it to be levied on the lumber of the Bucki Company, consisting of about 1,250,000 feet. On the same date the Atlantic Lumber Company sued out another writ of attachment against the Bucki Company for $75,000, and caused it to be levied upon about 3,500,000 feet of timber and lumber and 3,000,000 feet of logs in a boom, and on the sawmill plant of the Bucld Company. The sheriff! took possession of the personal property levied on. On the 11th day of October, 1897, the Bucki Company, by executing a forthcoming bond in accordance with section 1852 of the Revised Statutes of Florida, obtained possession of part of the personal property levied on, and on the 4th day of November, 1897, by the execution of a similar forthcoming bond, the Bucki Company obtained possession *403of the remainder of the personal property levied on. The sheriff held the logs and lumber levied on from October 1 to October li, 1897. The mill was run from October 11 to about November 16, 1897, during which time all of the logs were cut into timber and lumber, amounting to about 3,600,000 feet. The Bucki Company did not operate the mill after November 16, 1897. On motion of the Buck! Company the attachments were both dissolved, and the result of the litigation in the attachment suits showed that they were improperly issued.
Under the laws of Florida no attachments shall issue until the person applying for the same shall enter into bond, with sureties, payable to the defendant in at least double the debt or sum demanded, conditioned to pay all costs and damages which the defendant may sustain in consequence of the plaintiffs improperly suing out the attachment. Rev. St. § 1646. The bonds sued on in this action were given under that statute. The Fidelity Company is a surety on each of the bonds. Each bond has the condition prescribed by the statute “to pay all costs and damages” which the Bucki Company may sustain in consequence of it, the said Atlantic Lumber Company, “improperly suing out said attachment.” The declaration recited the proceedings in the attachment cases, setting out the bonds and writs and levies, and claimed damages for the interruption, suspension, and destruction to the Bucki Company’s business and credit in consequence of such attachments, and also claimed costs and attorney’s fees and expenses incurred in preparing for and on the trial of the motions to dissolve the attachments. The case went to trial on the plea of non damnificatus. and much, evidence was offered relating to the operations of the mill, the amount of lumber sawed, the amount sold, the prices received, and the profits made. Evidence was also offered as to the effect of the attachments upon the credit of the» Bucki Company, and on the question as to whether its credit was good or bad prior to the attachments. Evidence was also offered as to reasonable attorney’s fees for procuring the dissolution of the attachment. The Bucki Company requested the court to charge the jury that it was entitled in this action to recover for the injury to credit and loss of profits in its business. These requests were made in 16 separate charges, which were refused by the court, and the refusal of each is here assigned as error. Two of the requested charges presenting the questions are selected:
(1) “It is a question of fact for you to determine whether or not, if these attachments had not been issued and levied, the plaintiff would have been able to supply its mill with logs, and continued in its business and the amount of profits it would have made in such business in case said attachments had not been issued, provided you believe from the evidence that the direct consequences of such attachment caused the plaintiff to cease continuing in business, and that plaintiff would have and could have continued 'in business if such attachments had not been issued and levied and continued upon plaintiff’s properties.” (2) “If you believe from the .evidence that the issuing and levying of these writs of altachment injured or impaired the credit or financial standing of the plaintiff as it existed on October 1, 1.897, then the plaintiff is entitled to recover such damages for injury to its credit as you find from the evidence the plaintiff sustained as a direct *404consequence of the issuing and levying of such writs upon the properties of the plaintiff.”
The - evidence tended to show that $7,5*00 would be a reasonable compensation for the attorney for procuring the dissolution of the attachments. The court refused to permit the attorney’s fees to be estimated as a part of the damages, and the Bucki Company reserved an exception. There are other assignments of error by the Bucki Company, but those that are material raise questions that are involved in the assignments -stated. The Fidelity Company also reserved a bill of exceptions. It assigns'that the court erred in giving a number of charges relating to' the business' of the Bucki Company and its interruption by attachment. Two of those charges may be selected as presenting the questions involved:
(1) “Another element of damages claimed by tbe plaintiff is that tbe attachment interrupted its business, and by such interruptions, and the consequences thereof resulting from the attachments, the plaintiff was prevented from sawing and shipping lumber to certain parties in Baltimore, New York, and Boston, which plaintiff agreed to furnish prior to October 1, 1897; that such losses consist of certain amounts the purchasers of the lumber had to pay to supply what they had purchased of plaintiff. The court instructs you that the defendant is liable for all such losses, if any resulted as a direct consequence of the two attachments.” (2) “You are the exclusive judges as to the facts of this- cause. You are the exclusive judges of the amount of damages the plaintiff sustained as the direct and proximate consequence of the issuing and levying of these writs of attachment. These damages consist of two general consequences: First, all moneys paid out and all expenses incurred in and about and attending to the preparation of the trial of the motions to dissolve the attachments and on the trial of such motions which become reasonably necessary as a direct consequence of such attachment; second, all consequential damages, — that is, all damages caused by the interruption of the plaintiff’s business, either by disabling the plaintiff from operating its mill or disabling it to deliver timber and lumber it had agreed to deliver prior to October 1, 1897, — if you believe from the evidence that the direct and proximate effect of such attachments caused such interruption of the plaintiff’s business.”
It is assigned here by tbe Fidelity Company that tbe court erred in giving tbe first charge above stated, and in giving tbe second part of tbe second charge above stated. There was a verdict and judgment for tbe Bucki Company against tbe Fidelity Company for $10,880 damages, exclusive of attorney’s fees, and each party sued out a writ of error.
1. Tbe question as to attorney’s fees will be first considered. In addition to tbe general verdict for tbe plaintiff, tbe jury found a., special verdict as to tbe amount of attorney’s fees. They found that $7,500 would be reasonable and just as attorney’s fees for tbe services rendered in procuring tbe dissolution of tbe attachments. Tbe circuit court held that no judgment should be entered on this part of tbe verdict. Tbe condition of tbe bond sued on is to pay “all costs and damages” which tbe defendant in tbe attachment suit may sustain in consequence of tbe attachment being improperly sued out. Tbe word “costs,” as used in tbe bond, refers, I think, to such costs as the defendant would have tbe right to have taxed in bis favor in tbe attachment proceedings. Tbe word refers to such sums as are prescribed by law as charges for the services enumerated in the feé. bill or .bill of costs. Tbe word. “damages” *405means sncli damages as are legally recoverable. The question here is, of course, whether attorney’s fees paid in securing the dissolution of the attachment constitute such damages. As early as 1798 a case came before the supreme court of the United States that involved the question as to whether counsel fees should be allowed as a part of the damages. The case is* very briefly reported, and its nature does not fully appear. It does appear, however, that in estimating the damages the court below had allowed a charge of §1,600 for counsel fees, and the supreme court said that this ought not to be allowed. The general practice, the court said, in the United States, is in opposition to it; and the court added that, even if that practice were not strictly correct in principle, it is entitled to the respect of the court until it is changed or modified by statute. Arcambel v. Wiseman, 3 Dall. 306, 1 L. Ed. 613. In Day v. Woodworth, 13 How. 363, 14 L. Ed. 181, it was held that counsel fees ought not to be included in and allowed as damages in any action at law. In this case the court called attention to the fact that the courts of common law should have an established system of costs which are allowed to the successful party by way of amends for his expense and trouble in prosecuting his suit, and that the taxed costs are often far below the real expenses incurred by the litigant; and yet, the court added, it is all the law allows as expensa litis. Flanders v. Tweed, 15 Wall. 450, 21 L. Ed. 203, was an action to recover damages caused by the alleged unlawful seizure and detention of cotton. In the itemized statement of damages found by the jury, and allowed by the circuit court, was an item of §6,000 allowed as lawyer’s fees. The supreme court held that the judgment should be reversed and modified by disallowing this sum. See, also, Insurance Co. v. Conard, Baldw. 138, Fed. Cas. No. 10,647. In The Nuestra Señora de Regla, 17 Wall. 29, 21 L. Ed. 596, counsel fees for $5,000 for defending against the illegal seizure and detention of a vessel were allowed by the lower court. The supreme court held “the allowance of counsel fees wholly unwarranted.” The case of Bing Gee v. Ah Jim (C. C.) 7 Fed. 811, was a suit on an attachment bond. In that case the allegations concerning the expenses incurred in the employment of attorneys were, on motion of the defendants, stricken out of the complaint as immaterial. The case of Jacobus v. Bank (C. C.) 35 Fed. 395, was a suit for damages for wrongfully suing out an attachment. The court held, Judge Aeheson delivering the opinion, that the plaintiff could not recover counsel fees paid in the attachment suit. This question, the court said, under the decisions of the supreme court of the United States, must be answered negatively; and some of the cases are cited to which. I have already referred. It is true that in Sonneborn v. Stewart, 2 Woods, 599, Fed. Cas. No. 13,176, which was a suit for the malicious prosecution of a proceeding to have the plaintiff declared a bankrupt, Mr. Justice Bradley charged the jury that the plaintiff could recover his expenses for lawyer’s fees in following up and setting aside the proceedings in bankruptcy. That case, however, was carried on writ of error to the supreme court of the United States, and there reversed. Counsel representing the plain*406tiff in error, as shown by the brief, argued that the fees expended by the plaintiff in prosecuting or defending his case could not be allowed as any part of the damages. The supreme court said:
“The fees of counsel in prosecuting this case were no part of the consequences naturally resulting from the action of the defendants in suing out the decree and warrant in bankruptcy. They were not what the defendants ought to have foreseen. That such fees are not recoverable, and why they are not, was clearly shown in Good v. Mylin, 8 Pa. 51.”
Mr. Justice Bradley, who had presided on the trial in the lower court/ dissented from the opinion of the court, remarking that the exception in regard to allowing fees in the suit by way of damages was not founded in truth.' The court below, he said, expressly confined the jury to three specific grounds of damage, and this was not one of them. Stewart v. Sonneborn, 98 U. S. 187, 197, 25 L. Ed. 116. The case of Oelrichs v. Spain, 15 Wall. 211, 21 L. Ed. 43, is considered a leading case on this question. It involves the question of the assessment of damages upon the dissolution of an injunction. It was claimed that the enjoined party was entitled to include as damages the counsel fees paid in consequence of an injunction. The court commented on Arcambel v. Wiseman and Day v. Woodworth, supra, and then said:
“The point here in question has never been expressly decided by this court, but it is clearly within the reasoning of the case last referred to, and we think is substantially determined by that adjudication. In debt, covenant, and assumpsit damages are recovered, but counsel fees are never included. So, in equity cases, where tnere is no injunction bond, only the taxable eosts are allowed to the complainants. The same rule is applied to the defendant, however unjust the litigation on the other side, and however large the expensa litis to which he may have been subjected. The parties in this respect are upon a footing of equality. There is no fixed standard by which the honorarium can be measured. Some counsel demand much more than others. Some clients are willing to pay more than others. More counsel may be employed than are necessary. When both client and counsel know that the fees are to be paid by the other party, there is danger of abuse. A reference to a master, or an issue to a jury, might be necessary to ascertain the proper amount, and this grafted litigation might possibly be more animated and protracted than that in the original cause. It would be an office of some delicacy on the part of the court to scale down the charges, as might sometimes be necessary. We think the principle of disallowance rests on a solid foundation, and that the opposite rule is forbidden by the analogies of the law and sound public policy.”
These authorities seem conclusive of this question, looked at as a question of federal jurisprudence. It is urged, however, that this court should he governed by the statutes and decisions in Florida. We are not cited to any statute of Florida that establishes a rule of damages in cases like this so as to include attorney’s fees. It is provided that an attachment shall not issue until the person applying for it gives a bond conditioned to pay all costs and damages which the defendant may sustain in consequence of the plaintiff’s improperly suing out the attachment. Rev. St. 1892, § 1646. This statute creates no rule as to damages that would include counsel fees. It merely provides for the giving of a statutory recognizance, which is not the foundation of a right of action, but security only for the payment of damages. The damages referred to are such *407as are legally recoverable. In Wittich v. O’Neal, 22 Fla. 592, tbe court held, in a suit on an injunction bond, that the counsel fees incurred by the defendant in the suit to dissolve such an injunction are damages that may be recovered. The conclusion of the court is sustained by the decisions of the courts of last resort in many of the states. The learned chief justice of Florida, who delivered the opinion of the court, admits that his conclusions are in direct conflict with the decision of the United States supreme court in Oelrichs v. Spain, 15 Wall. 211, 21 L. Ed. 43, and sajs: “The reasons set forth in Oelrichs v. Spain are, to our minds, not satisfactory, and we think are fully answered in the brief of counsel for appellant.” I do not understand that this opinion is based upon the construction of a statute. The learned chief justice, as I understand it, is making the decision upon general principles. The decision involves the construction of the bond. The only Florida case to which our attention is called which involves a.suit on an attachment bond is Gonzales v. Tobacco Co., 26 South. 1012. This case was decided December 6, 1899, which is subsequent to the date and alleged breach of the bond sued on in the case at bar. When the facts of the case are examined, it will be seen that it involved the allowance of attorney’s fees to the amount of $80, which were paid in defense of the main case. The court held that such allowance was improper; that ihe condition of the bond to pay all costs and damages the defendant may sustain in consequence of improperly suing out the attachment will not admit of damages for the expense of defending the main suit. That disposed of the whole case before the court, so fdr as the question of attorney’s fees is concerned. The court, however, added, by way of dictum, that by the great weight of authority attorney’s fees incurred in relation to the attachment or in procuring its dissolution will be allowed as damages in actions upon attachment bonds. But, if this decision was in point, being rendered subsequent to the transactions involved in this suit, it would not be binding on this court. Burgess v. Seligman, 107 U. S. 20, 33, 2 Sup. Ct. 10, 27 L. Ed. 359; Bartholomew v. City of Austin, 29 C. C. A. 568, 85 Fed. 359. I do not find, from the examination of the authorities presented by counsel, or from my own investigation, that there are any statutes or decisions of the state of Florida that establish the rule that the plaintiff1 in a suit on an attachment bond can recover as a part of bis damages counsel fees incurred in obtaining a dissolution of the attachment. As I do not find the law so established in the state of Florida, it is unnecessary to consider whether state decisions to that effect would be binding upon this court, or whether it would be the duty of this court to construe the bond, and follow tbe decisions of the supreme court of the United States. Olcot t v. Supervisors, 16 Wall. 678, 688, 21 L. Ed. 382; Boyce v. Tabb, 18 Wall. 546, 21 L. Ed. 757; Foxcroft v. Mallett, 4 How. 353, 370, 11 L. Ed. 1008; Carroll v. Carroll’s Lessee, 16 How. 275, 287, 14 L. Ed. 936; Swift v. Tyson, 16 Pet. 1, 19, 10 L. Ed. 865. Controlled by the decisions of the supreme court, I am constrained to dissent from the opinion just read, and to hold that the circuit court did not err in refusing to enter judgment on the special verdict. In 1796 the *408supreme court suggested that, if the -practice of refusing to allow attorney’s fees as damages was not strictly correct in principle, it was entitled to respect until it was changed or modified by statute. Arcambel v. Wiseman, 3 Dall. 306, 1 L. Ed. 613. That remark surely cannot have less force now, when the rule appears to have been followed by the federal - courts for more than a century.
2. The distinguished counsel for the Bucki Company says that “the court below refused to submit to the jury the question as to how much damages the plaintiff sustained by reason of losses by the interruption and destruction of its business caused by the attachment.” After stating the grounds on which the court based its decision, the learned counsel adds, “This action of the court is assigned as error, and presents the leading and most important question for review in this court.” The question, as presented by the evidence offered, the exceptions reserved, and the errors assigned, is naturally divided into two inquiries: (1) Is the Bucki Company entitled to recover for loss of profits caused by the attachment? (2) Is the Bucki Company entitled to recover for injury to its credit caused by the attachment? - There is seemingly a great deal of conflict in authorities on .these questions. The apparent conflict arises from decisions in jurisdictions controlled by varying statutes, and by the failure to note, in commentaries on them, the difference in the kinds of actions in which the damages are being adjusted. It is important at the outset, therefore, to keep in mind the nature of this suit. It is an action for breach of two attachment bonds. The suit is by the payee of the bonds — the defendant in the attachment suit — against the surety on the bonds. They are statutory bonds, their condition being Axed by statute. The condition of each bond is that the principal shall well and truly “pay all costs and damages” which the payee may sustain in consequence of the principal’s “improperly suing out said attachment.” The suit is not an action on the case against a plaintiff for maliciously suing out an attachment. In the latter case a very different rule as to damages prevails. There is no statute in the state of Florida which makes the obligors on an attachment bond liable in an action on the bond for such damages as the plaintiff is liable for in an action on the case for maliciously and vexatiously suing out an attachment. In states where there are such statutes, they control the decisions of the courts of the states as to the measure of damages. In some of the states the grounds on which an attachment is sued out cannot be traversed, but the defendant may at once sue for damages, and the obligors on the attachment bond are made liable, if the attachment was sued out maliciously, for such damages as the plaintiff in the attachment suit would be liable for in an action on the case for the malicious prosecution of the attachment. In Florida the defendant in the attachment suit may traverse the plaintiff’s affidavit, and move to dissolve the attachment (Rev. St. § 1656), and on its dissolution may sue on the bond, and is entitled to recover only “all costs and damages” which it has sustained from the improper suing out of the attachment. There being no statute otherwise fixing the measure or kind of damages to be recovered, and the bond sued on conforming to the statute, we *409are confronted with, the questions’: What damages can properly be included in the construction of the statute and bond? What damages were within the contemplation of the makers of the law and the parties to the contract? It cannot be held that the words “all damages” are used in their broadest sense. In some actions injury to the feelings are included and considered in establishing a plaintiff’s damages, but it would not be claimed that a bond of this kind would include damages of that character. The defendant in attachment in some jurisdictions can sue the plaintiff in such suit in an action on the case, and, if it is proved that the attachment was vexatious and malicious, damages ma.y be recovered for every kind of injury to credit, business, or feelings. To sustain such suit, malice upon the part of the defendant and want of probable cause for the attachment must both be proved. In a suit ou the bond for actual damages, malice need not be shown, nor can the defendant defend by showing probable cause. Injuries that recovery could be had tor only when malice exists and want of probable cause is ■shown cannot be considered or estimated as covered by the bond. The statute and bond could not be intended to cover damages that are allowed only in cases where malice and want of probable cause is shown, and at the same time dispense with the allegation and proof of malice, and cut off the defense of probable cause. In suits on the bond malice need not be proved. The existence of probable cause is no defense. The two suits for damages being so unlike in the issues raised and proof required, it may be expected that the rules as to the measure and proof of damages would be different. The legislature, in passing the act to require the bond, did not intend to impose on the sureties a liability as great as that imposed by law on the plaintiff in cases of malicious attachment. The condition of the bond is satisfied, and its terms substantially complied with, by awarding the plaintiff all costs and expenses incurred and caused by the attachment, and such damages as be may have sustained by being deprived of his property, or the use thereof, or any injury thereto, or its loss or destruction. The makers of the bond, in an action on it are not liable for anything beyond such actual damages as are the direct result of the attachment.
The general principles controlling these questions seem to be clearly indicated in the opinions of the supreme court. In Watson v. Sutherland, 5 Wall. 74, 18 L. Ed. 580, the court incidentally discussed the question which, is involved here. It was a suit in equ i ty to enjoin a levy on a miscellaneous stock of goods. The injunction was resisted upon the ground that the defendant had an adequate and complete remedy at law. The court therefore considered the question as to what damages could be recovered at law for the seizure and sale of the goods. The court said it was well settled that “the measure of damages, if the property were not sold, could not extend beyond the injury done to it, or, if sold, to the value of it when taken, with interest from the time of the taking down to the trial.” The court added: “Loss of trade, destruction of credit, and failure of business prospects are collateral or consequential damages, which it is claimed would result from the trespass, hut *410for which compensation cannot be' awarded in a trial at law.” North v. Peters, 138 U. S. 271, 281, 11 Sup. Ct. 346, 34 L. Ed. 936, is to the same effect. In the case of Vance v. W. A. Vandercook Co. (No. 2), 170 U. S. 468, 18 Sup. Ct. 645, 42 L. Ed. 1111, the court again had under discussion the question as to what damages could be recovered for the unlawful or illegal seizure of personal property. Mr. Justice White, delivering the opinion of the court, said:
“Under tlie decisions to which we have referred, it is evident that in the case at bar the measure of damages,for the detention was interest on the value of the property from the time of the wrong complained of. This rule of damages has been held by this court to be the proper measure, even in an action of trespass for a seizure of personal property, where the facts connected with the seizure did not entitle the plaintiff to a recovery of exemplary damages. An action of this character was the case "of Conard v. Insurance Co., 6 Pet. 262, 8 L. Ed. 392. In the course of the opinion there delivered by Mr. Justice Story, the court held that the trial judge did not err in giving to the jury the following instruction: ‘The general rule of damage is the value of the property taken, with interest from the time of the taking down to the trial. This is generally considered as the extent of the damages sustained, and this is deemed legal compensation with reference solely to the injury done to the property taken, and not to any collateral or consequential damages resulting to the owner by the trespass.’ Indeed, the same rule was, in effect, reiterated in Watson v. Sutherland, 5 Wall. 74, 79, 18 L. Ed. 580, where it was substantially held that ‘loss of trade, destruction of credit, and failure of business prospects’ could not be recovered in an action at law, where malice or bad faith was not an ingredient, because such damages were collateral or consequential, as regards a seizure of personal property, and could only be recovered at law where the issue of bad faith was involved. In other words, that, however at law such damages might be considered, when the suit was based uiDon a malicious trespass they were not a proximate result of an injury to property, caused by an illegal seizure thereof.”
It follows, I think, that the Bucki Company is not entitled to recover in this action for the loss of profits in its business caused by the issuance and levy of the attachment, and that it cannot recover damages in this action for injury to its credit. Pettit v. Mercer, 8 B. Mon. 51; Weeks v. Prescott, 53 Vt. 57, 58; Braunsdorf v. Fellner, 76 Wis. 1, 3, 45 N. W. 97; Crockery Co. v. Haley, 6 Wash. 302, 33 Pac. 650, 653; Kirbs v. Provine, 78 Tex. 353, 14 S. W. 849; Sedg. Dam. (8th Ed.) § 127; Suth. Dam. (2d Ed.) § 55. So far as the levy on the real estate was concerned, it did not operate any change of possession (Rev. St. Fla. § 1651), or cause any damage (Trawick v. Martin-Brown. Co., 79 Tex. 460, 14 S. W. 564; Brandon v. Allen, 28 La. Ann. 60). We have to deal with the measure of damages for the unlawful seizure, without malice, of personal property. Pardee, circuit judge, speaking for this court, said:
“The measure of damage for the unlawful seizure, without malice, of personal property, where the property is subsequently returned to the owner, is the difference between the value of the goods at the time and place of the unlawful taking and at the time and place where returned, in addition to the value of the use during the time of detention.” Coulson v. Bank, 4 C. C. A. 616, 54 Fed. 855, 859.
The supreme court applied this rule in the case of a trespasser. Bates v. Clark, 95 U. S. 204, 24 L. Ed. 471. A surety on an attachment bond, with the condition as in this case, in the absence of *411malice, should not he held to a harsher measure of damages than that applied to a naked trespasser.
I think that the charges given by the circuit court are not in conformity with the law as held by the supreme court, and that the assignments of error made by the Fidelity Company as to the charges quoted are well taken.