Cousins v. Paxton & Gallagher Co., 122 Iowa 465

Cousins v. Paxton & Gallagher Co.

122 Iowa 465 | Iowa | 1904

SheewiN, J.

The bond undertook to indemnify the plaintiff against all damages which he might sustain in consequence of the seizure or sale of the property levied upon. The defendants contend that attorney’s fees actually paid by the sheriff in protecting his levy would not be recoverable on the bond; that the bond provides only for indemnity against damages actually paid; and that no action can be maintained thereon in this case, because the plaintiff has not paid the attorney’s fees for which he sues. This is- a statutory bond, and, in determining whether attorney’s fees may be recovered thereunder, we must look to the purpose and scope of the statute providing therefor, as well as to the intention of the obligors in making it, construed in the light of the circumstances surrounding its execution, the situation and relation's of the parties, and the object to be accomplished by it. When the sheriff receives notice from *467a third party that- he is the owner of the property which has been levied upon he is no longer bound to hold the property, unless an indemnifying bond is given as provided by law. Upon a failure to give such bond, the officer may release the property upon which he has levied, and by so doing escape all liability by reason of the levy. But after the bond has been given .os provided by the statute, he is bound to hold the property and to protect the levy, and if he fails in this respect he does so at his peril. Evans & Son v. Thurston, 53 Iowa, 122; Wadsworth v. Walliker, 51 Iowa, 605. The purpose then, of the bond, is to compel the officer to do that which he would be under no obligations to do if it were not given him, and, by the very act of delivering the bond to him, the attachment creditors advise the officer that he must hold the property and protect the levy, and this with the knowledge that another than the attachment defendant has already taken the preliminary steps necessary to contest the right of the officer to hold the property. It is clear, then, that the purpose of the bond and the intention of the makers is to indemnify the officer against all damages which he may sustain in protecting the ley)- and the interest of the obligors in any and all litigation which may arise by reason of seizing and holding the property. The obligation of the bond is that it will indemnify against “all damages.” This is broad language, and must be construed to include every element of damages which may fairly be said to have been contemplated by the parties. An officer, can have no personal interest in litigating the right to property upon which he has levied, further than to protect himself and his bondsmen and to do his duty, hence'the requirement of a bond; and if .he is compelled to defend his action in a suit brought against him, and in so doing is compelled to employ counsel and to pay therefor, it is just as much a damage to him as is the payment of a judgment and costs,' and we think as clearly contemplated and intended by the parties and by the statute, other* wise the officer, in doing- no more than the law says he shall do in such circumstances, would be denied full indemnity. *468To “indemnify” means to “secure against loss”; “to save harmless”; “to make good to”; “reimburse.” 4 Century Diet. 3058. This precise question has not heretofore been determined by this court, and the adjudications thereon in other jurisdictions are somewhat conflicting; but we are satisfied that the better reason favors this rule, and that justice is more nearly attained thereby. In suport of 'our conclusions, see Berry v. Slocomb, 2 La. Ann. 993; Meyer v. Blakemore, 54 Miss. 570; Kansas City Hotel Co. v. Sauer, 65 Mo. 279; French v. Parish, 14 N. H. 496; Anderson v. Washabaugh, 43 Pa. 115; Robinson v. Blakewell, 25 Pa. 424.

The question whether, an action can be maintained before the actual payment of counsel fees is settled adversely to the plaintiff in Wilson v. Smith, 23 Iowa, 252. In that case, however, it was claimed that payment of the judgment had been made by a note, and the question whether the note had been accepted as such payment was determined by the jury. But the rule there announced, that when the bond is conditioned to save the obligee from any damages action cannot be maintained before payment, is calculated to fully protect all parties, and is well sustained by both reason and authority. If the obligee of the bond has paid nothing, lie had suffered no damage as a matter of fact; a mere liability to pay may ripen into an actual loss, but if it is never paid no damage results to the obligee by reason thereof, and in such circumstances the liability to pay constitutes no damages for which the indemnity was given. The law recognizes a well-defined difference between covenants of indemnity against loss, and covenants to assume or pay a liability. In the former class the covenant is not broken, and no right .of action accrues, until a loss has been suffered against which the covenant runs, while in the latter class the covenant Í3 broken, and a right of action accrues, whenever the liability is fixed and absolute. This distinction grows out of the-express terms of the contract, and must be recognized, otherwise a new contract would be made for the parties, and their rights determined thereunder, instead of by the contract *469which they made. Oaks v. Scheifferly, 74 Cal. 478 (16 Pac. Rep. 252); Henderson A. L. Co. v. John Shillito Co., 64 Ohio St. 236 (60 N. E. Rep. 295, 83 Am. St. Rep. 745); Bank v. Hastings, 1 Doug. 225 (41 Am. Dec. 549); Central Trust Co. v. Louisville Trust Co., 100 Fed. Rep. 545 (40 C. C. A. 530); Wicker v. Hoppock, 6 Wall. 94 (18 L. Ed. 752); Frye v. Bath Gas & Electric Co., 97 Me. 241 (54 Atl. Rep. 395, 59 L. R. A. 444.) In this case the covenant was to pay damages sustained, and not liability incurred, and for this reason the judgment must be REVERSED.