United States Fidelity & Guaranty Co. v. Frohmiller

227 P.2d 1007, 71 Ariz. 377, 1951 Ariz. LEXIS 271
CourtArizona Supreme Court
DecidedFebruary 26, 1951
Docket5233
StatusPublished
Cited by37 cases

This text of 227 P.2d 1007 (United States Fidelity & Guaranty Co. v. Frohmiller) is published on Counsel Stack Legal Research, covering Arizona Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States Fidelity & Guaranty Co. v. Frohmiller, 227 P.2d 1007, 71 Ariz. 377, 1951 Ariz. LEXIS 271 (Ark. 1951).

Opinion

UDALL, Chief Justice.

This appeal involves simply a matter of statutory construction. The question presented is whether attorneys’ fees are included within the term “all damages” as-used in Section 12-503, A.C.A. 1939, a statute first enacted half a century ago,. R.S. 1901, Secs. 277,. 278.

Since the instant case grows out of a prior action in which the same parties were involved, we deem it essential to set forth the background giving rise to this appeal. Under the terms of Section 12-503, supra, one John S. Crozier, a Wins-low taxpayer, instituted an action against various state officers and their sureties to recover state moneys which he alleged had been illegally paid out by them. Pursuant to the terms of the statute, Crozier executed and filed a bond payable to the officers in the sum iof $2,000. Defendant-appellant, United States Fidelity and Guaranty Company,, a corporation, hereafter called defendant, was surety thereon. This court affirmed the judgment of *379 the superior court dismissing Crozier’s complaint in that action upon the basis that a constitutional appropriation justified the questioned expenditure of the public funds involved, Crozier v. Frohmiller, 65 Ariz. 296, 179 P.2d 445.

Thereafter the present suit was filed by two of the state officers and all of the sureties, plaintiffs-appellees, against Crozier and defendant company. Plaintiffs claimed that they had suffered damages to the extent of $2,850 for attorneys’ fees incurred in the defense of the prior action and that such damages were recoverable from defendant on his bond given under the terms •of Section 12-503, supra.

In the present action Crozier failed to answer. The defendant company moved .to dismiss the complaint on the ground that it failed to state a claim upon which relief could be granted. The motion was •denied; defendant elected to stand on its motion and judgment was rendered against both Crozier and defendant surety for the full amount of the bond. The present appeal is from that judgment.

Section 12-503, supra, provides: “If the •attorney-general shall for sixty (60) days after request made by any taxpayer of the state in writing, fail to institute such action (for the recovery of illegally paid ■state money), then any taxpayer of the state may institute such action in his own name and at his own cost, with the same effect as if brought by the attorney-general; provided, the person instituting such action shall execute a bond payable to the defendant in such action, conditioned that if the plaintiff shall fail to prosecute such action with diligence and to effect, that the plaintiff will pay all damages sustained by the defendant by reason of such action and all costs incurred therein. If any such taxpayer shall prevail the court shall allow him costs and reasonable attorney’s fees, not to exceed forty (40) per cent of the amount recovered or saved to the state, as the case may be.” (Emphasis supplied.)

On the one hand plaintiffs contend that attorneys’ fees incurred in the successful defense of such an action are included within the words “all damages sustained by the defendant by reason of such action” and hence are recoverable in a subsequent action. On the other hand defendant contends that attorneys’ fees are not “damages” within the meaning of the statute and hence are not recoverable.

As a general rule attorneys’ fees are not recoverable either in the same or a subsequent action unless provided for by statute or by agreement of the parties, Stapley v. Rogers, 25 Ariz. 308, 216 P. 1072; 15 Am.Jur., Damages, Sec. 142; 25 C.J.S., Damages, § 50. However, to this general rule there are certain well-recognized exceptions. Among these are those allowing attorneys’ fees in actions on attachment or injunction bonds or in actions for damages for wrongful attachment or injunction, 15 Am.Jur., Damages, Sec. 143. In Williams v. Fidelity & De *380 posit Co., 42 Colo. 118, 93 P. 1119, 1120, it is stated: “* * * The reason usually given for awarding as damages counsel fees incurred for services rendered in dissolving injunctions and writs of attachment is that they are provisional or extraordinary remedies, ancillary to the main purpose of the suit, and, as the granting of the writ secures to the applicant some privilege or right not incident to ordinary remedies, it is but reasonable to hold that ‘damages,’ as used in the bond upon which the granting of the writ is conditioned, embraces attorney’s fees.”

In such cases, however, attorneys’ fees are limited to those required for procuring the dissolution of said writs and not for the general defense of the case, Jacobson v. Laurel Canyon Mining Co., 27 Ariz. 546, 234 P. 823; Mason Dry Goods Co. v. Ackel, 30 Ariz. 7, 243 P. 606; Hammond v. A. J. Bayless Markets, 58 Ariz. 58, 117 P.2d 490.

Another noteworthy exception to the general rule is stated in 15 Am.Jur., Damages, Sec. 144: “It is generally held that where the wrongful act of the defendant has involved the plaintiff in litigation with others or placed him in such relation with others as makes it necessary to incur expense to protect his interest, such costs and expenses, including attorneys' fees, should be treated as the legal consequences of the original wrongful act and may be recovered as damages.”

Illustrative of the application of this exception is the case of Massachusetts Bonding & Ins. Co. v. Lentz, 40 Ariz. 46, 9 P.2d 408. And this court has frequently recognized and enforced contracts to pay attorneys’ fees, particularly in foreclosure .cases. See Federal Land Bank v. Warner, 42 Ariz. 201, 23 P.2d 563, reversed 292 U.S. 53, 54 S.Ct. 571, 78 L.Ed. 1120, and cases cited therein.

Generally, the tendency of the courts is not to extend the meaning of “damages” to include such elements as attorneys’ .fees. In the instant case the statute does not expressly allow defendant officers an attorney’s fee and there was no contract between the parties directly providing for same, nor does the case seemingly fall within any of the recognized exceptions to the general rule. Thus, the question ultimately presented is whether attorneys’ fees are encompassed within the term “damages” as used in the statute in question.

It should he noted that by the terms of Section 12-503, supra, “reasonable attorney’s fees” are expressly authorized for the plaintiff taxpayer in case he prevails in the action, but there is no express provision allowing a defendant officer attorneys’ fees, unless included within the term “all damages” is an authorization for attorneys’ fees to be awarded a prevailing defendant. This latter is the construction urged upon this court by plaintiffs, yet no *381 authorities directly in point have been cited in support thereof.

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Bluebook (online)
227 P.2d 1007, 71 Ariz. 377, 1951 Ariz. LEXIS 271, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-fidelity-guaranty-co-v-frohmiller-ariz-1951.