Gray v. Emmons

• Decision Date: 09 December 1859
• Citation: 7 Mich. 533
• Court: Michigan Supreme Court
• Parties: John A. C. Gray and others v. Norman J. Emmons and others

7 Mich. 533

John A. C. Gray and others v. Norman J. Emmons and others

Supreme Court of Michigan

December 9, 1859

Heard October 11, 1859; October 12, 1859; October 13, 1859 [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material]

Appeal from the Wayne circuit in chancery.

The bill was filed by complainants, who composed the firm of John A. C. Gray & Co., against Norman J. Emmons, John H. Van Dyke and James V. Campbell, to have given up and canceled an indemnity bond given by complainants to Emmons & Van Dyke, and which the latter, through Campbell as their attorney, were seeking to enforce, by suit at law in the Wayne circuit court.

The bill states that in 1851, Crampton & Osborne, of Milwaukee, were indebted to complainants, who employed the defendants, Emmons & Van Dyke, attorneys, doing business at Milwaukee, to collect this claim; that Emmons & Van Dyke received upon it, from one Joseph C Dowe, a draft purporting to have been drawn by Garrison & Fritz, accepted by Martin, Oliver & Co., payable to James M. Ray, for $ 3,900, and Dowe also assigned to complainants, with the right of priority, a chattel mortgage on a stock of goods, executed by Ray to Dowe to secure, amongst other claims amounting to over $ 8,900, the draft for $ 3,900. This draft being unpaid and a forgery, Emmons & Van Dyke demanded the goods of Dowe, who had them in possession, and he refused to deliver them; thereupon Emmons & Van Dyke replevied the goods in the name of complainants, from Dowe, and upon getting possession, deposited the whole stock with one Caleb Wall, an auctioneer, who, at the request of Emmons & Van Dyke, caused them to be advertised for the purpose of selling sufficient thereof to pay the $ 3,900 and costs; and Wall proceeded to sell the goods at auction, and sold enough to make the $ 3,900 and expenses; that Emmons & Van Dyke then, without right, authority or direction of complainants, and in direct violation of the rights of others, caused the remainder of the goods also to be sold; whereas they should have returned the balance unsold to Dowe; that soon after Emmons & Van Dyke obtained the possession of said goods, they advised complainants that they would proceed and sell sufficient to make the $ 3,900, and the latter were not advised of the sale of the balance for months after they had all been sold, nor did they expect Emmons & Van Dyke would sell more than sufficient to pay the $ 3,900.

That the action of replevin to recover the goods of Dowe was tried, and judgment rendered in favor of complainants on the 27th of January, 1852, after all the goods had been sold by Wall; that Dowe then brought an action of trover against Emmons for the conversion of the goods, which action was defended by Emmons; that prior to the commencement of this suit, Emmons & Van Dyke had remitted to complainants $ 2,300 of the proceeds of the goods, but retained the balance to indemnify themselves against their liability on account of the trover suit of Dowe, for a long time, and until September, 1852, when the defendant Van Dyke, being in New York, it was suggested to him by Mr. Gray that, to obtain the balance of the money, complainants would indemnify Emmons & Van Dyke against damages, by reason of the taking of the goods; that the complainants were willing to indemnify and save Emmons & Van Dyke harmless from all liability they had incurred by reason of the directions and authority received from complainants, and for all necessary liabilities they had incurred in collecting said debt; not believing, nor were they informed of, their liability in any way arising therefrom, unless for the mere taking of said goods on said writ of replevin; that while Van Dyke was there in New York, it was arranged that complainants should give a bond, conditioned to indemnify and save Emmons & Van Dyke harmless for collecting said $ 3,900, and their necessary acts only for that purpose, and so far as was necessary in the performance of their duties as the attorneys of complainants; that Emmons & Van Dyke sent a form of bond from Milwaukee to complainants, and also a remittance of $ 1,100, the balance of the $ 3,900 less costs and charges; that complainants dated and signed the bond, and returned it to Emmons & Van Dyke; that they executed the bond, fully relying upon, and reposing confidence in, Emmons & Van Dyke, that the bond was to indemnify them only against such acts and proceedings as they were lawfully authorized to take and institute for the collection of the $ 3,900, and no other; that they are advised Emmons & Van Dyke insist that the bond is conditioned to indemnify them from all and every act, and proceeding, in any way relating to the business, as well lawfully as unlawful acts, and particularly for the wrongful sale of the surplus of the goods; that complainants had no knowledge at the time they executed the bond, that Van Dyke & Emmons had so sold the goods, nor that the suit of Dowe was for taking and selling any goods except to satisfy the $ 3,900 collected by Emmons & Van Dyke; that in November, 1852, a judgment for $ 5,000 and costs was recovered by Dowe against Emmons, and was affirmed by the Supreme Court of the state of Wisconsin.

The complainants allege that the suit was not properly defended; that Emmons did not show what disposition was made of the surplus money arising from the sale; that it was decided in the case that it was lawful for Emmons & Van Dyke to have sold sufficient to make the $ 3,900 and expenses; that it was unlawful for them to sell any more goods, after sufficient had been sold to make the $ 3,900 and costs, and that, therefore, the entire liability of appellants on the bond arose, and wholly occurred, by reason of the mistakes, errors and mismanagement of Emmons & Van Dyke, after they performed their duties to appellants, as their attorneys, by exceeding their lawful power and authority as such attorneys. And the bill prays that the suit on said bond may be enjoined, and the bond itself canceled.

The answer of Emmons & Van Dyke denies that they sold, or caused to be sold, any of said goods, after sufficient thereof had been sold to realize $ 3,900 and expenses of sale. They insist that they had a lawful right to sell, or cause to be sold, all the goods mentioned in the mortgage, returning to Dowe the surplus money after paying complainants, but that they did not exercise that right; that Dowe, by his authorized agent, assented to the sale of the whole of the said goods, and joined in the directions to Wall for the sale, and recognized the right of complainants to recover the $ 3,900.

That they have no recollection of advising complainants that they would proceed and sell sufficient to make the $ 3,900, and upon their belief deny they gave such information; that they received instructions from complainants to sell the goods; that they can not state when all the goods were sold, but immediately afterwards informed complainants that they had been sold, and before the trial of the replevin suit; that complainants were explicitly informed of the fact that the whole of the goods had been sold, and of the amount produced, several months before the bond was given.

That before Dowe commenced the suit in trover against Emmons, they had remitted $ 2,300 to complainants, and that the balance was retained for a considerable period of time; but they deny that it was retained as an indemnity against their liability on account of said suit; that after Dowe commenced the action of trover they did decline to remit to the complainants the balance they had accidentally retained, until a favorable issue of that suit; and they would have also retained the $ 2,300 if the suit had been commenced before they remitted the money.

That Mr. Van Dyke was in New York, and complainants proposed to execute a bond of indemnity, and that defendants should then remit the money; but they deny that such proposition was simply to indemnify the defendants against liability on account of taking of the goods, but, on the contrary, allege that complainants were then fully and truly informed of all the facts and circumstances connected with the sale of the goods, and of all that defendants knew or had learned concerning the alleged wrong complained of by Dowe in said trover suit; that with this information the complainants proposed to give the bond to indemnify defendants against their indemnity to Wall, all or any liability incurred by reason of the agency of defendants in the premises, or against the suit of Dowe in all its consequences; that they (Emmons & Van Dyke) prepared the bond and sent it to complainants, by whom it was executed. They deny that complainants executed the bond in the belief that they were merely indemnifying Emmons & Van Dyke against such acts as might be adjudged lawful; that it was the intent of both parties that defendants should be indemnified, fully and completely, against the consequences of all and every their acts and doings without fraud in the premises.

That the complainants knew when they signed the bond that the trover suit by Dowe was instituted for all the goods in said mortgage mentioned, and the pretense of complainants that when they signed the bond they believed the Dowe suit was merely for taking and selling sufficient goods to pay $ 3,900, is false. They admit the recovery of the judgment for $ 5,000, and affirmation thereof, but deny it was recovered by reason of any negligence in defending the suit, and deny the suit was improperly defended, and deny that it was not shown what disposition was made of...