
    Gates et al. v. The City of Toledo. Goulden v. The City of Toledo.
    
      Counsel fees — Assessments assigned by municipality to contractor — Unsuccessful suit against lot owners — Counsel fees not recoverable in subsequent action.
    
    Counsel fees and other expenses paid by a party in the conduct of an unsuccessful suit against lot-owners to recover the amount of a sewer assessment assigned, by a municipal corporation to such party, in payment for the construction of a sewer which suit failed because the assessment was held invalid, are not recoverable in an action subsequently brought against the corporation for damages for violation of contract even though by its contract the corporation had stipulated that the assessment should be a valid assessment.
    (Decided November 23, 1897.)
    Error to the Circuit Court of Lucas county.
    Frank Gates and Neil Hueston constructed a public sewer for the city of Toledo, and book in payment therefor, as per previous contract, an assignment of certain assessments upon lots and lands claimed to be benefited by the improvement. It was stipulated in their contract with the city, that the assessments so to be assigned should be valid assessments. All the steps taken by the city authorities in providing for the sewer and in awarding the contract to Gates and Hueston were in form regular and in accordance with statute. In a suit, prosecuted to final judgment by Gates and Hueston against persons whose property was assessed and who refused to pay, it was decided and adjudged, that some of the assessments were valid, and as to them, Gates and Hueston recovered judgment. A part were held invalid, because, as to some the property had already been provided with local drainage ; as to others the sewer did not provide drainage, and as to all such, Gates and Hueston failed in their action. As to still others, the assessments were excessive. In those instances Gates and Hueston partially failed in their action. One-half the costs were adjudged against them. They expended in attorney’s fees, $1,300.65, for abstract of title to property in suit, $65.00, and paid one-half the costs, $46.37; in all, $1,412.02. Their action against the city was to recover these sums. To a petition setting' up the foregoing and other pertinent facts, a demurrer was sustained by the common pleas and judgment given against plaintiffs which was affirmed by the circuit court.
    Michael M. Goulden constructed a sidewalk for the city of Toledo, and took in payment, as per previous contract, an assignment of an assessment upon the property abutting. It was stipulated in the contract that the assessment so to be assigned should be a valid assessment. All the steps' taken by the city authoritiés in providing for the building of' the walk, and in awarding the contract to Goulden, were regular save that no notice of the proposed improvement' was given the owner of the abutting property. In a suit prosecuted to final judgment by Goulden against the person upon whose property the assessment was made, it was decided and adjudged, that the assessment was invalid for want of notice, and on that ground Goulden failed in the suit. His action against the city was, in one cause of action to recover the amount of the assessment, and in a second cause of action to recover for the attorney’s fees paid for conducting the unsuccessful suit. The common pleas gave judgment for the entire claim. The circuit court affirmed this judgment as to the amount of the assessment and reversed it as to the amount claimed to have been paid as attorney’s fees. Goulden asks of this court a reversal of the judgment of reversal.
    
      Stephen Brophy and John F. Kumler, for plaintiffs in error.
    For the breach of an authorized contract a corporation is liable the same as an individual. Dillion on Municipal Corps., 4th ed., sec. 472.
    In order to recover the costs and expenses of previous litigation, including counsel fees, it is not necessary that the covenantee, warrantee or vendee should give the covenantor, warrantor or vendor notice of suit. Sedgwick on Damages, vol. 1, secs. 236, 238, 241; Southerland on Damages, (2d ed.) vol. 2, sec. 618, 619; Rawle on Covenants, 4th ed., pages 305, 306, 307; Morris v. Rowan, 17 N. J. L., 304 (1839); Ryerson v. Chapman, 66 Me., 557 ; Cincinnati v. Dickmeir, 31 Ohio St., 242.
    The same rule of recovery which governs in case of breach of covenant of a deed of land, governs in case of a jbreach of a contract or a warranty in sale of a chose in action or of a chattel. Southerland on Damages. 2d ed., vol. 2, sec. 669, page 1501; Bank v. Jarvis, 20 N. Y., 230; Giffert v. West, 33 Wis., 617; Coolridge v. Nicholas, 5 Met., 68; Kirchner v. Cincinnati, 14 W. L. B., 48.
    The costs and expenses, including counsel fees, incurred in prior litigation whether in prosecuting or defending an unsuccessful suit are recoverable. Sedgwick on Damages, 8th ed., vol. 1, sec. 236.
    Upon breach of covenant of warranty in a deed, a party may recover the costs and expenses including counsel fees.
    
      Southerland on Damages, 2d ed., vol. 2, see. 617 to 619 inclusive; Rawle on Covenants for Title, 4th ed., 305, 312; Harding v. Larkin, 41 Ill., 413; Swett v. Patrick, 12 Me., 1; Cox's Heirs v. Strode, Bobb, vol. 2, page 273; Kennison v. Taylor, 18 N. H., 220; Pitkin v. Lebvitt, 13 Vt., 379; Keeler v. Wood, 30 Vt., 242; Taylor v. Holton, 1 Mont., 688; McAlpin v. Woodruff, 11 Ohio St., 120 ; Lane v. Fury, 31 Ohio St., 574.
    Where a person is subjected to a suit through defendants tort, he can recover from the defendant, the costs and expenses, including counsel fees, of a suit brought against him by the injured party. Sedgwick on Damages, sec. 241; Westfield v. Mayo, 122 Mass., 100.
    Upon a breach of the implied warranty on sales of notes and choses in action, a party may recover the costs and expenses, including counsel fees, incurred by him in an unsuccessful suit in asserting or defending. Southerland on Damages, (2d ed.) volume 2, section 668 ; Delaware Bank v. Jarvis, 20 N. Y., 226 Ct. App. (1859)
    Upon breach of warranty of title to personal property a party can recover the costs and expenses, including counsel' fees, incurred in defending an unsuccessful suit. Thurston v. Spratt, 52 Me., 202.
    Upon failure of reinsurers to pay a fire loss, the reassured may recover from them the costs and expenses, including counsel fees, incurred in an unsuccessful suit. N. Y M. Ins. Co. v. Protn. Ins. Co., 1 Story, 458 U. S. Cir. Ct. (1841).
    Upon the breach of an agreement in a written contract, a party may recover the costs and expenses of previous litigation including counsel fees. Dubois v. Hermance, 56 N. Y., 673, (1874); Goulden v. Toledo, 32 W. L. B.,78.
    There is nothing peculiar about a covenant in a deed in Ohio to-day, private seals and all the old common law technicalities have been abolished and disregarded in this state, and such a covenant is but a plain agreement, nothing less and nothing more; and it is difficult to distinguish between such an agreement, and an agreement to deliver a valid assessment and we are unable to understand why a different rule of damages should apply in the one case than in the other, and the cases in the 11 Ohio St., 120 and 31 Ohio St., 574, are directly in point and in both of these cases the court permitted a recovery of counsel fees. Dubois v. Hermance, 56 N. Y., 673; Westfield v. Mayo, 122 Mass., 100.
    
      W. A. Mills, for defendant in error.
    These two actions were brought to recover the damages alleged to have been sustained by the plaintiffs’ in error through the failure of the city of Toledo to levy valid assessments, whereby the cost of the construction of certain improvements was to be paid. The actions are, therefore, ex eon^actu in their nature and the question here presented is, are the expenses of litigation incurred in actions brought by these plaintiffs in error to enforce the payment of assessments which the citj7 agreed should be valid, but which were not, and by reason whereof said actions failed, recoverable ?
    In the cases at bar the city of Toledo entered into a contract with the plaintiffs in error to pay the cost of certain improvements by levying a valid assessment therefor. If it failed to levy such an assessment it would be liable for the contract price of the work.
    If the city had failed to levy any assessment and these plaintiffs in error had brought an action to recover the contract price, it would not be even claimed that the moneys by them expended in litigation would be an element of damage for which judgment could be rendered.
    In the cases at bar it is said that no valid assessment was levied; • if this be true then no assessment was levied, and hence we claim there can be no recovery. Roberts v. Mason, 10 Ohio St.. 277.
   Spear, J.

It will be noted that one .question is common to both cases : Is the city liable for attorney’s fees incurred in prosecuting the action against owners whose lands were claimed to have been benefited by the respective improvements, but which were found not liable to assessment? Probably there is no difference in principle between, counsel fees and other expenses.

The affirmative of this proposition is based upon the further proposition that in a suit for breach of an agreement in a written contract by which a claim or chose in action is assigned, the party damaged may recover the costs and expenses of previous unsuccessful litigation necessarily resulting from such breach, including counsel fees, and especially so, where there has been a guarantee of title and the title fails, or of validity and the claim assigned proves invalid.

Decisions of courts in other states, support this claim. But they are not uniform, and the question after all, is, what is the law of this state on the subject. Decisions of this court determine the matter as to cases bearing more or less analogy to the cases at bar, but the precise question has not heretofore been presented..

The rule that in actions involving malice, fraud, insult or oppression, reasonable counsel fees may be included in the recovery, is well established. Stevens v. Handly, Wright, 121; Sexton v. Todd, Ib., 316; Roberts v. Mason, 10 Ohio St., 277; Finney v. Smith, 31 Ohio St., 529; Stevenson v. Morris, 37 Ohio St., 10; and Peckham Iron Co. v. Harper, 41 Ohio St., 100, are cases of this character.

So where land is conveyed with covenants of warranty and for quiet enjoyment, and a breach follows' and the covenantee is evicted by reason of a paramount title, and in such suit has vouched in the covenantor to defend the title, his damages for the breach may include an allowance for counsel fees. McAlpin v. Woodruff, 11 Ohio St., 120, and Lane v. Fury, 31 Ohio St., 574, are cases illustrative of this rule.

Other cases are to the effect that in actions on attachment, or injunction, or replevin bonds, where, in previous suit, the attachment has been discharged, orthe.injunction dissolved, or recovery had against the officer for wrongful seizure, counsel fees in such actions may be allowed in suits upon the bonds. Noble v. Arnold, 23 Ohio St., 264; Alexander v. Jacoby, Ib., 358, and Finckh v. Evers, 25 Ohio St., 82, are cases of this character.

The foregoing’ cases show the extent to which counsel fees have been allowed as part of the recovery of damages by decisions of this Court. One case in the Superior Court of Cincinnati, Kirchner v The City, 14 W. L. B., 48,. holds that damages for failure to give to the contractor a legal assessment for the construction of a sewer, may include costs and counsel fees in an unsuccessful suit by the contractor to recover against the land owner. This holding was predicated on the cases heretofore cited in the 11 Ohio St., and 31 Ohio St., involving damages for breach of covenants in deeds.

No other reported case in this state, so far as our search has extended, goes to this length. One case distinctly holding against such recovery, is that of Cincinnati v. Steadman, a circuit court case reported in 8 O. C. C., at page 407, by Smith, J. The case was brought to this court, but upon questions other than the one above stated, and the inquiry here did not involve the question of counsel fees.

It will be noted, that in the cases upon tort where counsel fees have been considered, although treated as part of plaintiff’s compensation, they relate to such probable expense of this character as would be incurred in the case on trial, and which would be present in the mind of the jury, but that no proof was allowed as to their extent or value. This principally or partly because, if proof were given it would introduce a new issue, and would result in an unseemly controversy. Among the varying grounds stated by different judges for allowing counsel fees in such cases as part of the plaintiff’s compensation, perhaps the most reasonable one is that, inasmuch as the law furnishes no exact measure, and since such matter of damage can in practice hardly be excluded from the jury, they should be allowed to be taken into consideration under proper instructions. But, as they are matter of actual expense, they cannot reasonably be allowed under the head of exemplary damages, and so, necessarily, should be included as part of compensation. In the cases upon undertakings or bonds, where counsel fees actually incurred in preceding litigation were allowed, the decisions are based on the provisions of the bonds themselves, as where the obligation is “to pay all damages he may sustain,” etc., or “to save harmless and pay all damages he may sustain,” etc, or the like. The recovery of counsel fees and other expenses incurred in defending title to land which had been warranted, is based on diverse grounds, one being that such expenses should be considered as a portion of the money paid for the title, that is a portion of the purchase money; another, and one which seems more reasonable and satisfactory, is, that the solemnity which should surround the transfer of real estate and the necessity of maintaining - stability of titles require the rule.

It may be that the rationale of the decisions affecting titles to real estate, applied to contracts affecting the title to personalty, and chosesin action, might warrant a similar rule. But it is believed that the policy of this state has been, and the understanding generally, among bench and bar, is, that such damages are not recoverable for the breach of simple contracts, not involving tort, even though there has been an express agreement as to the validity of the thing in controversy. Transactions in the business world have been conducted upon this understanding, and it would seem that if the rule of damages is to be enlarged it should be done by the law-making power, and thus be made to apply to future, and not to past, transactions. An enlargement of the rule would, also, tend to uncertainty. As observed by the learned judge of the circuit court who reported the case of Cincinnati v. Steadman, supra: ‘ ‘ If counsel fees are to be allowed as part of the damages in a case of this kind, where there has been no contract between the parties which provides therefor, we would not know where to draw the line, or say in what cases they should not be allowed, where a party had been involved in litigation, as a result of the breach by the other party of a contract between them.”

•And there is an additional reason for refusal to enlarge the rule in these cases, growing out of the peculiar situation of the parties. The defendant is a municipal corporation. In the case involving the sewer assessments, the city was acting as the agent, not of the people of the entire municipality so much as that portion of them who were to be benefited by the improvement. If, in this respect, a. different situation is presented in the other case, as to the sidewalk, it is not of such a character as to call for the application of a different rule. In all such.cases strictness should be observed by courts, and the municipality visited with liability only where the right to recover is made clear. See opinion in McCloud v. Columbus, 54 Ohio St., 439.

We think there was no error in the refusal of the courts below in these cases to allow a recovery for costs and other expenses, and counsel fees, incurred in the suits against the lot owners.

Judgments affirmed.  