A. C. Israel Commodity Co. v. Banco Do Brasil, S. A.

50 Misc. 2d 362, 270 N.Y.S.2d 283, 1966 N.Y. Misc. LEXIS 1876
CourtNew York Supreme Court
DecidedMay 17, 1966
StatusPublished
Cited by11 cases

This text of 50 Misc. 2d 362 (A. C. Israel Commodity Co. v. Banco Do Brasil, S. A.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
A. C. Israel Commodity Co. v. Banco Do Brasil, S. A., 50 Misc. 2d 362, 270 N.Y.S.2d 283, 1966 N.Y. Misc. LEXIS 1876 (N.Y. Super. Ct. 1966).

Opinion

Matthew M. Levy, J.

The plaintiff herein — A. C. Israel Commodity Co., Inc. — was (and is) a Delaware corporation doing an exporting business in this State. (It will hereinafter be referred to as Israel or as the attachment defendant.) Banco Do Brasil, S. A., the plaintiff in a prior action, and a defendant herein, procured an attachment against Israel’s property in this State and levied thereon. (This defendant will hereinafter be referred to as Banco or the attachment plaintiff.) The other defendant in the present action, National Surety Corporation — hereinafter referred to as the surety — bonded the attachment at the behest of Banco (Civ. Prac. Act, § 907; CPLR 6212, subd. [b]).

The undertakings executed by the surety, in consonance with the requirements of the statute, provided: that if the defendant [Israel] recover judgment in this action, or if the warrant of attachment is vacated, the plaintiff [Banco] will pay all costs which may be awarded to the said defendant, and all damages which the said defendant may sustain by reason of the said attachment ’ ’.

The attachment was in the sum of $600,471.40, and a levy in that amount was effectuated by the Sheriff, resulting in Israel’s funds in a local bank being immobilized to that extent for a [364]*364short period of time. The undertakings on the attachment aggregated $36,000.

Israel brought on a motion to have the attachment against it dissolved. The application resulted in an order which vacated the warrant of attachment against Israel, and set aside all levies thereunder on Israel’s property. The ground of the decision was that the complaint failed to state a cause of action cognizable in the courts of the State of New York. Thereafter, a series of appellate procedures were invoked by Banco to upset the vacatur.

Legal services were of course required by and rendered to Israel in connection with the motion to vacate the attachment and levy, and in defense of the various appellate proceedings instituted by Banco consequent thereto. The stages of the litigation may be subdivided as follows:

(1) the motion of the attachment defendant in this court to vacate the attachment, which motion was granted at Special Term (29 Misc 2d 229);

(2) the appeal taken in the prior action by the attachment plaintiff to the Appellate Division of this court from the order vacating the attachment;

(3) the motion by the attachment plaintiff in the Appellate Division for leave to appeal to the Court of Appeals of this State (13 A D 2d 912) from the order of affirmance of the Appellate Division (13 A D 2d 652);

(4) the appeal by the attachment plaintiff to the Court of Appeals, leave to appeal thereto having been granted by the Appellate Division (13 A D 2d 912);

(5) the petition by the attachment plaintiff to the Supreme Court of the United States for a writ of certiorari (376 U. S. 906), the Court of Appeals having affirmed the order vacating the attachment (12 N Y 2d 371).

The record shows that, between the times indicated in the events numbered 1 and 2 above, Israel was personally served with process and appeared generally and moved for an order dismissing Banco’s complaint on the merits. That motion was granted at Special Term, and, although a notice of appeal was filed by Banco, no further appellate proceedings were prosecuted. Israel does not claim the right to recover for the professional legal services required to be performed on its behalf in this aspect of the case. But Israel does seek judgment for the expenses for counsel fees and disbursements incurred by it assertedly for services rendered in obtaining and sustaining the vacatur of the attachment. "Whether these disbursements were such damages as are recoverable by the plaintiff [365]*365in the circumstances of the case is an issue which does not appear to have heretofore been determined in this State by precedential authority squarely in point.

Expenses incurred for the services of legal counsel are not, generally, an appropriate element of damages (Matter of Muck, 125 N. Y. S. 2d 415, 419; Soffer v. Glickman, 27 Misc 2d 721, 724-725). However, the rule is otherwise where the suit to recover such expenses is predicated on a wrongful attachment — because a warrant of attachment is “an extraordinary process, often [causing] great damages, and is designed, ordinarily, for the purpose of being used sparingly only.” (Allith-Prouty Co. v. Wallace, 32 Wyo. 392, 403). As stated by the Court of Appeals in Tyng v. American Sur. Co. (174 N. Y. 166, 168): “ That counsel fees are within the language of such an undertaking does not admit of doubt ”.

Such fees, to be recoverable, must of course be the natural and proximate consequense of the wrongful attachment (Hartford Acc. & Ind. Co. v. Chaney, 191 Okla. 523). Many of the jurisdictions which have held that counsel fees incurred in a direct attack on a wrongful attachment are a proper element of damage have also held that such fees incurred in defending the principal action on the merits are not recoverable. On the other hand, many authorities have allowed an exception in cases where the attachment could be vacated only by defeating the principal action on the merits (See Ann. 65 ALR 2d 1436-1438, § 7; 6 Am. Jur. 2d 1007-1010, §§ 630, 631.) So, there’s the rub" 1 in the case at bar: Were the attorney’s services here proximately caused by the attachment, proved to have been wrongful by an attack on the merits of the suit; or were they the result of defending the action on the merits?

The case was submitted to me for determination substantially on the basis of the receipt in evidence of the litigation papers and briefs in the prior suit. It is not gainsaid by the plaintiff here that the attachment was vacated “ on the merits ”. The process was otherwise valid on its face. The action being for a money judgment and Israel being a foreign corporation, it was per se subject to attachment (Civ. Prac. Act, § 903, subd. 1; CPLR 6201, subd. 1). Nor is it denied that Israel was engaged in doing business in this State at the time of the attachment and levy and was thus subject to service of process upon it personally (Civ. Prac. Act, § 229; CPLR 311, subd. 1).

[366]*366The defendants contend that, as a matter of law, the plaintiff is not entitled to recover for any expenses incurred by it in the prior action — and in any event and at the most, for the services as to item No. 1 only (having to do with the application by Israel at Special Term to vacate the attachment). The principal thesis of the defendants seems to be based on the assumption that an attachment defendant who is subject to personal service within the State cannot recover counsel fees incurred in attacking a wrongful attachment on the merits; and it is further urged by the defendants that the appellate proceedings involved solely issues as to the merits of the attachment plaintiff’s substantive claim and the expense thereof was therefore not within the ambit of damages recoverable upon the vacatur of the attachment.

A leading case in this State is Thropp v. Erb (255 N. Y. 75). A nonresident defendant was involved who was not personally served within the State. He made no motion to vacate the warrant. After the attachment, he personally appeared in the action and successfully contested the suit by way of trial on the merits.

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Bluebook (online)
50 Misc. 2d 362, 270 N.Y.S.2d 283, 1966 N.Y. Misc. LEXIS 1876, Counsel Stack Legal Research, https://law.counselstack.com/opinion/a-c-israel-commodity-co-v-banco-do-brasil-s-a-nysupct-1966.