City Trust v. American Brewing Co.

• Decision Date: 13 June 1905
• Citation: 182 N.Y. 285,74 N.E. 948
• Court: New York Court of Appeals Court of Appeals
• Parties: CITY TRUST, SAFE DEPOSIT & SURETY CO. OF PHILADELPHIA v. AMERICAN BREWING CO.

182 N.Y. 285

74 N.E. 948

CITY TRUST, SAFE DEPOSIT & SURETY CO. OF PHILADELPHIA

v.AMERICAN BREWING CO.

Court of Appeals of New York.

June 13, 1905.

Appeal from Supreme Court, Appellate Division, Fourth Department.

Action by the City Trust, Safe Deposit & Surety Company of Philadelphia against the American Brewing Company. From a judgment of the Appellate Division (87 N. Y. Supp. 1130,93 App. Div. 606) affirming a judgment for plaintiff, and from an order of the Appellate Division affirming order of Special Term, plaintiff appeals. Reversed.

See 84 N. Y. Supp. 771.

The complaint in this action, in substance, alleges that on the 11th day of November, 1898, the plaintiff, as surety for one John M. Kurtz, executed a bond to the people of the state of New York in the penal sum of $1,000, conditioned that if a liquor tax certificate was issued to said Kurtz, permitting him to engage in the traffic of liquors at 153 Main street in the city of Rochester, he would not permit gambling, etc., upon the premises, following the usual form of bonds required in such cases. The complaint further alleges, in substance, that such liquor tax certificate was delivered to Kurtz, that there was thereafter maintained upon the premises a gambling device known as a ‘nickel-in-the-slot machine,’ and that on or about the 12th day of July, 1898, the State Commissioner of Excise commenced an action against said Kurtz and this plaintiff to recover the penalty of the bond, which resulted in a judgment against the plaintiff for the sum of $1,000 and costs, which subsequently was affirmed in the Appellate Division and Court of Appeals, with costs, amounting in the aggregate to $1,480.43, which the plaintiff has paid to the Commissioner of Excise, and in addition thereto he has paid his counsel the further sum of $640.53 for costs and expenses in defending the litigation. The complaint further alleges, in substance, that at the time the bond was made and the liquor tax certificate issued to Kurtz, and during all the time mentioned thereafter, the defendant, the American Brewing Company, owned the lease of the store, the liquor business conducted therein, and all of the stock of goods and fixtures; that it maintained the nickel-in-the-slot machine and received the receipts therefor; that it employed the said Kurtz at $12 per week to manage the saloon, the defendant paying all of the expenses of running the place, furnishing the beer, and receiving the receipts for the business so carried on; that the defendant was the real principal, and as such procured the liquor tax certificate to be issued in the name of Kurtz, but for its own use and benefit as the real principal, without disclosing such fact to the plaintiff. The complaint demands judgment for the sum of $2,120.96, with interest from the 18th day of April, 1901, with the costs of the action. An answer was interposed, and the cause was moved for trial. After the impaneling of the jury, and before any evidence had been taken, the defendant moved to dismiss the complaint upon the ground that it did not state facts sufficient to constitute a cause of action. The court granted the motion, and ordered the exception taken thereto to be heard at the Appellate Division in the first instance. At the Appellate Division the exception of the plaintiff was sustained, and a new trial ordered, with costs to abide the event. Thereupon the defendant appealed from that order to the Court of Appeals, giving the statutory stipulation that, in case of an affirmance, judgment absolute should be awarded against it. Subsequently the order of the Appellate Division was affirmed by this court, and judgment absolute upon the stipulation was awarded against the defendant, and the case remitted to the Supreme Court, where the original judgment roll was filed. Plaintiff's damages were first assessed at a Trial Term of the Supreme Court at the full amount of the plaintiff's claim as alleged in the complaint, but subsequently a motion was made on the part of the defendant to set aside the assessment, which was denied, but upon an appeal to the Appellate Division that court reversed the order, set aside the assessment, and ordered a reassessment of the damages. Upon such reassessment the plaintiff was allowed as damages the $1,000 penalty of the bond, with interest, and the costs of the trial of the action which it had been compelled to pay, but the costs in the Appellate Division and Court of Appeals were disallowed, together with the sum of $640.53 paid for counsel fee and expenses in conducting the litigation, notwithstanding that the court, in assessing the damages, found that the services rendered by counsel were reasonably worth the amount charged and paid, and that the expenses incurred were necessary in the defense of this action. The court making the assessment filed a formal decision containing findings of fact and conclusions of law, and at the end thereof stated that each of the items rejected were disallowed ‘as a matter of law, and not as a matter of discretion.’ The plaintiff filed exceptions to the conclusions of law in which the three items of damages claimed were disallowed. A motion was then made to set aside the assessment by reason of the court's refusing to include therein the three items in controversy, which motion was denied, and on appeal therefrom the Appellate Division affirmed the order, but certified that a question of law has arisen which, in its opinion, ought to be reviewed by the Court of Appeals, and it has thereupon certified the following questions:

‘(1) Is the plaintiff entitled to recover as part of its damages the costs on appeal to the Appellate Division in the action brought by the excise commissioner against John M. Kurtz and plaintiff, which costs are included in the judgment of the Supreme Court in that action and paid by the plaintiff?

‘(2) Is the plaintiff entitled to recover as part of its damages the judgment for costs on appeal to the Court of Appeals in the same action paid by the plaintiff?

‘(3) Is the plaintiff entitled to recover as part of its damages its necessary expenses by way of counsel fees and disbursements paid by it to its attorney in the same action and not included in the costs taxed therein?’

Gray, Werner, and O'Brien, JJ., dissenting.

Charles Van Voorhis, for appellant.

P. M. French, for respondent.

HAIGHT, J. (after stating the facts).

The first question raised is as to whether this order is appealable. No appeal lies from such an order to this court as a matter of right. Bassett v. French, 155 N. Y. 46, 49 N. E. 325. Neither does an appeal lie, even though certified by the Appellate Division, where the assessment of the damages involved a discretion on the part of the court or jury making the assessment. Lewin v. Lehigh V. R. R. Co., 169 N. Y. 336, 62 N. E. 385. But in the case now before us the items of damages disallowed are definitely fixed and determined, and the court making the assessment has certified that they were rejected ‘as a matter of law, and not as a matter of discretion,’ and the Appellate Division has certified that a question of law has arisen which ought to be determined by this court as to the three items disallowed, thus raising three separate and distinct questions of law as to the items rejected. This conforms to the requirements of the second subdivision of section 190 of the Code of Civil Procedure, which provides for an appeal to this court from a determination of the Appellate Division ‘where the Appellate Division allows the same and certifies that one or more questions of law have arisen, which in its opinion ought to be reviewed by the Court of Appeals.’ We, consequently, conclude that the appeal is well taken.

The Appellate Division appears to have been of the opinion that the Supreme Court, in assessing the damages under the order of this court awarding judgment absolute in favor of the plaintiff, had the right to try the question and determine whether the plaintiff was entitled to recover under the allegations of its complaint. Had the action been brought to trial upon the issue raised by the answer interposed, it is quite possible that it would have been determined that the plaintiff was not entitled to recover upon its claim for damages in the Appellate Division and Court of Appeals, or for its counsel fee and expenses in conducting such appeal. Whether or not the plaintiff would have been entitled to recover those items, or any one of them, would depend upon the facts determined upon such trial. It could not increase the damages of the defendant by interposing a frivolous or unsound defense, and then prosecute an appeal from the judgment rendered, unless it was authorized so to do, either expressly or impliedly, by the defendant, its agents or attorneys. But the defendant did not see fit to bring the action to trial upon its answer. It moved for judgment upon the complaint, claiming that it failed to state a cause of action. Upon this it succeeded in the trial court, but was defeated in the Appellate Division, and then, instead of taking a new trial under the order of that court, it took an appeal to this court, stipulating that in case of an affirmance judgment absolute should go against it. This court did affirm the order, and awarded judgment absolute against the defendant. The effect of this was to award to the plaintiff the judgment which it was entitled to upon its complaint, without regard to any defense that had been interposed by the answer, and, in assessing the damages thereunder, the allegations of the complaint were required to be treated as true, and the same as if no answer had been interposed.

In the case of Bossout v. Rome, W. & O. R. R. Co., 131 N. Y. 37, 29 N. E. 753, Peckham, J., says: ‘The judgment entered upon the filing of the remittitur from this court was an absolute and final one, which fixed irrevocably the liability of the defendant to pay the damages sustained by the...