New Amsterdam Cas. Co. v. Utility Battery Mfg. Co.

• Decision Date: 27 December 1935
• Citation: 122 Fla. 718,166 So. 856
• Parties: NEW AMSTERDAM CASUALTY CO. et al. v. UTILITY BATTERY MFG. CO.
• Court: Florida Supreme Court

166 So. 856

122 Fla. 718

NEW AMSTERDAM CASUALTY CO. et al. v. UTILITY BATTERY MFG. CO.

Florida Supreme Court, Division A.

December 27, 1935

On Rehearing March 3, 1936.

Error to Circuit Court, Hillsborough County; Elwyn Thomas, Judge.

Suit by Utility Battery Manufacturing Company against the New Amsterdam Casualty Company and another. To review a judgment for plaintiff, defendants bring error.

Reversed and remanded.

COUNSEL Claibourne M. Phipps, of Tampa, for plaintiffs in error.

Mabry Reaves, Carlton & White, of Tampa, for defendant in error.

OPINION

BROWN Justice.

This is a suit on a bond given by the complainant in a suit for receivership, accounting, etc., to obtain, or make effective the appointment by the circuit court of a receiver of the Utility Battery Manufacturing Company, a corporation, the New Amsterdam Casualty Company being a surety on the bond.

C. E Yocam and wife filed a bill of complaint against the Utility Battery Manufacturing Company, Arnold S. Kirkeby, E. O. Kirkeby, and H. D. Wentworth, charging violation of a contract between Yocam and the Kirkebys, with reference to said company, misappropriation of company funds by the Kirkebys, mismanagement of its affairs, and various other acts of misconduct on the part of the Kirkebys. The bill prayed for an accounting that the Kirkebys be required to reimburse the company for funds misappropriated and properties misused and also to pay certain amounts which it was alleged that they had agreed to pay. The bill prayed for the appointment of a receiver to take charge of said company. It also alleged that defendant Wentworth was an officer and director of the company and had concurred in the improper acts alleged against the Kirkebys. (This latter charge was later refuted by the testimony of Yocam himself on the hearing.)

On application of complainants an order was entered on June 13, 1931, appointing a receiver for said company upon the complainants entering into a bond in the sum of $5,000 conditioned to pay the company any loss or damage it might sustain should the court upon a further hearing decree that the appointment of such receiver was not warranted and said bill be dismissed. The bond was executed on June 15, 1931, was approved, and the appointment of the receiver thereupon became effective. The receiver took charge of said business on the same date. The defendants filed a joint and several answer denying the material allegations of the bill and incorporating therein a demurrer. The answer was signed by all the defendants and by Mabry, Reaves & White as solicitors for defendants.

The cause was brought on promptly for hearing. After a hearing lasting some five days, a final decree was entered in favor of the defendants, on July 2, 1931, seventeen days after the receiver had taken charge of the battery company's property and business. The decree dismissed the bill and discharged the receiver, whereupon the receiver surrendered control of the business to the officers of the company, filing his report as receiver a few days later.

Thereafter, on September 29, 1931, the Utility Battery Manufacturing Company filed a suit against Yocam and the New Amsterdam Casualty Company, as surety on said bond, alleging the execution of the bond, the breach of its condition, and claiming that it had sustained various damages on account of the appointment of such receiver, in the total sum of $5,000. A few days thereafter an amended declaration was filed, to which the casualty company filed a demurrer and motion for compulsory amendment, both of which were overruled. The casualty company then filed certain pleas specifically traversing various allegations of plaintiff's amended declaration, and also pleas alleging that the receiver was appointed in a suit which involved issues and alleged and prayed the right to various and sundry relief other than the appointment of a receiver, and that the appointment of a receiver was merely ancillary to the principal relief sought in the suit, and that any service rendered by attorneys and auditors were rendered in and about the principal defense of the suit and not because of or in connection with the ancillary appointment of a receiver therein. The plaintiff demurred to the pleas upon various grounds. Among other grounds, the demurrer made the following points:

(1) That the pleas are not in bar of the matters and things averred in the declaration, but relate solely to the question of damages, and that the facts therein averred, so far as provable at all, may be shown in evidence, even in the absence of a plea.

(2) That the said pleas do not traverse the facts averred generally, or traverse separately any material allegation in the declaration.

(3) That the pleas seek to make an issue of the amount of complainants recovery as distinguished from its right of recovery.

As additional grounds to the seventh and eighth pleas, the demurrer says that it affirmatively appears from said pleas (to which a copy of the bill of complaint was attached) that the appointment of a receiver by the court in the cause in which the bond was given was not merely ancillary, but, on the contrary, was the relief and the means of securing the relief prayed for in said suit; that it affirmatively appeared that the receivership was a primary feature and an inseparable part of said suit.

The court sustained the demurrer to the pleas and granted a motion to strike the same, but allowed additional time to file amended pleas. The casualty company having failed to plead further, the court later entered a default judgment against said company for failure to plead. A default had been entered against defendant Yocam previously.

The case came on for trial before a jury on November 3, 1932, on the question of damages, and a verdict in favor of the plaintiff in the sum of $2,500 was rendered and judgment entered thereon, to which judgment writ of error was taken.

Upon the trial of the case, the court permitted the New Amsterdam Casualty Company to make, as against the evidence introduced by the plaintiff, all the points concerning the recoverability of the various elements of damage which had been attempted to be set up in the pleas filed by the casualty company. In our opinion there was no error in the action of the trial court in sustaining the demurrers to said special pleas, but it is hardly necessary for us to rule on those points, because if there was any error, it was error without injury.

Upon the conclusion of plaintiff's case, the casualty company moved to strike all testimony as to attorney's fees, for the reason that they were not rendered in connection with the dissolution of the receivership as distinguished from the defense of the case on its merits, and further because it appeared that services were rendered indiscriminately to four defendants and consequently could not be charged against it as surety. The court denied this motion. We do not think there was any error in this ruling. The plaintiffs had introduced evidence in the trial tending to show that the only defendant who employed counsel in the case was the Utility Battery Manufacturing Company. While attorney Wentworth had a share of stock in the battery company and was one of its officers, and was made a defendant in the case, this did not require him to render legal services to the company in the receivership case without compensation. He testified that the company agreed to pay him $250 and Mabry, Reaves & White $1,000 for their services in representing the Utility Battery Company and seeking to get it out of the hands of the receiver. The testimony as to the work which the attorneys did in this case was quite full and the value of the work was testified to, and we hold that the court committed no error in permitting this evidence to go to the jury. It was a question for the Jury to determine under all the evidence what proportion of these attorney's fees was properly to be considered as damages recoverable for breach of the bond.

Plaintiffs placed reputable members of the bar of Hillsborough county upon the stand and their testimony was to the effect that in their opinion $1,000 was a reasonable attorneys' fee to be charged the corporation for procuring the discharge of the receiver. Counsel for defendant in error concede that amount would be the recoverable limit as to that particular element of the damages. It is true that in this case there was no separate hearing on motion to discharge the receiver, but the testimony shows that counsel for the Battery Manufacturing Company prepared a motion to discharge the receiver and took the motion before the circuit judge, in the presence of opposing counsel, for the purpose of getting a date set for hearing, and that the circuit judge suggested that instead of a separate hearing touching the question of whether the receiver should be continued, the matter should be considered on final hearing, inasmuch as the receivership aspect involved the whole case; and a final hearing was thereafter promptly had. The final decree, which was rendered by the late Judge Robles, and which was introduced in evidence, found that the complainants had failed to prove the material averments of the bill of complaint, and decreed that the appointment of the receiver was not warranted, and that the bill should be, and was, dismissed. There can be no doubt that one of the main objects of the bill, if not the main object, was to throw the corporation into the hands of a receiver.

It is not denied that the bond sued on in this case was given, and that the condition of the bond was broken, thus entitling the plaintiff to recover such damages as it sustained by virtue of the appointment of the receiver pendente lite. Counsel for plaintif...