McAleenan v. Massachusetts Bonding & Ins. Co.

• Decision Date: 22 November 1921
• Citation: 232 N.Y. 199,133 N.E. 444
• Parties: McALEENAN v. MASSACHUSETTS BONDING & INSURANCE CO.
• Court: New York Court of Appeals Court of Appeals

232 N.Y. 199

133 N.E. 444

McALEENAN

v.MASSACHUSETTS BONDING & INSURANCE CO.

Court of Appeals of New York.

Nov. 22, 1921.

Action by Joseph A. McAleenan against the Massachusetts Bonding & Insurance Company. From a judgment of the First Appellate Division unanimously affirming a judgment in favor of plaintiff (190 App. Div. 657,180 N. Y. Supp. 287), defendant appeals.

Affirmed.

Cardozo, J., dissenting.Appeal from Supreme Court, Appellate Division, First Department.

Emory R. Buckner and Maxwell Steinhardt, both of New York City, for appellant.

Herbert C. Smyth and John Purdon, both of New York City, for respondent.

HISCOCK, C. J.

Under the demurrer which was successfully interposed to one alleged cause of action, this action remains as one brought to recover damages for defendant's neglect in failing to take an appeal from a judgment which had been rendered against plaintiff. The defendant insured plaintiff to the extent of $5,000 against liability for damages which might be caused by the operation of his automobile. In the course of such operation one Cimino was killed, and thereafter the latter's wife, as administratrix, brought an action against plaintiff to recover damages resulting from the death of her husband, claimed to have been caused by negligence in the operation of the automobile. Defendant in accordance with its rights under its insurance policy took charge of the defense of said action, but it was so unsuccessful therein that a judgment for $13,131.98 was recovered against plaintiff, although upon the trial an offer of settlement for $7,500 had been made by the plaintiff therein and rejected because of the refusal of consent by this defendant. Thereafter defendant notified this plaintiff that the judgment was infected with error, and that it would take an appeal in his name and behalf, and that he need take no steps in the matter. The plaintiff, relying upon such undertaking, took no appeal, and the defendant failed to do as it had agreed and take one. The result of all this was that plaintiff was compelled to pay in full the judgment which had been rendered against him, receiving from the defendant the sum of $5,000 in accordance with its insurance policy, and he then brought this action to recover the balance of the judgment over and above said $5,000 as damages which he had suffered by reason of the failure of defendant to take the appeal.

The case was tried before the court without a jury. There was no dispute about the facts, and no motion for a nonsuit was made at the close of the case. While the trial judge at the close of the evidence went through the form of directing a theoretical verdict in behalf of plaintiff, he subsequently returned to the correct theory under which the case was actually tried and made findings of fact sustaining plaintiff's claim, and from the judgment entered thereon and affirmed by the Appellate Division this appeal is taken.

Thus, in its practical aspects, we have a case where the defendant, through an overconfident trial counsel (not the one arguing this appeal), having refused to permit plaintiff to make a reasonable settlement of the claim against him, and then represented by a careless attorney, having failed to take an appeal as it promised, thus compelling plaintiff under the threat of an execution to pay between two and three times what it would have cost him to settle the case if permitted by defendant, is now seeking to escape all responsibility for this unfortunate situation in which it has placed its client. There is certainly nothing in this unwise, negligent, and inequitable conduct and attitude of the defendant which inclines us to relax any of the requirements which stand between it and relief from the consequences of its acts which thus far are fastened upon it.

Two reasons are urged why the judgment should be reversed. The first one is in substance that the burden rested upon plaintiff of showing that the judgment against him would have been reversed if defendant had taken the appeal as it agreed to, and that, not having shown this, there was no evidence that the failure to take the appeal resulted in any damages. The second one is to the effect that, even though the first proposition be erroneous, the defendant at least had the right as part of its case to show that the judgment against plaintiff would not have been reversed, and that therefore the failure to take the appeal was innocuous, and that it was denied this right.

[1] If defendant were in a position to argue the first proposition, we think that it would be our duty to sustain it. It is a fundamental rule that one seeking to hold another liable for neglect to perform some duty or obligation must show that the neglect has resulted in some loss or injury, and that as the result thereof certain damages have been suffered. While there seem to be some not very impressive expressions to the contrary (Godefroy v. Jay, 7 Bing. 413; Wharton on Neg. § 752), the great majority of authorities in this and other jurisdictions apply this rule to such an action as the present one and decide, directly or indirectly, that one who seeks to hold another responsible for neglect in the conduct of litigation must show that the action which has been neglected would probably have been successful, and therefore that its neglect has directly resulted in damages measured by the value or amount of the rights which were lost by the default. Spangler v. Sellers, 5 Fed. 882, 887;Vooth v. McEachen, 181 N. Y. 28, 73 N. E. 488,2 Ann. Cas. 601;G. & L. M. Co. v. E. L. A. Corp., 117 Iowa, 180, 90 N. W. 616,62 L. R. A. 617;Maryland Casualty Co. v. Price, 231 Fed. 397, 145 C. C. A. 391, Ann. Cas. 1917B, 50;Cornelissen v. Ort, 132 Mich. 294, 93 N. W. 617;Gambert v. Hart, 44 Cal. 542;Drais v. Hogan, 50 Cal. 121;Skillen v. Wallace, 36 Ind. 319.

It is urged and was by the Appellate Division held that defendant is estopped from making this contention and from calling into question the success of the appeal which should have been taken. This idea of estoppel seems to be based upon the promise made by the defendant that it would cause the appeal to be taken plus the assertion of its counsel in substance that the judgment secured against plaintiff was affected by error and would be reversed. We fail to see how defendant by these or any other facts in the case was estopped from making the claim that plaintiff was under the burden of showing that the appeal, if taken, would have been successful, and that damages had been suffered. It is not necessary to invoke any principle of estoppel in order to uphold the obligation of the defendant to take the appeal. It was an agreement for which a good consideration was found in the terms of the policy and the relations between the parties, and it became a binding obligation which could not be violated or neglected without responsibility. The defendant concedes this. But we entirely fail to see how this agreement could prevent the defendant, while admitting its obligation to take an...