Maryland Casualty Co. v. Teer, 214 N.C. 29 (1938)

June 15, 1938 · Supreme Court of North Carolina

214 N.C. 29

MARYLAND CASUALTY COMPANY, a Corporation, v. NELLO L. TEER.

(Filed 15 June, 1938.)

Attorney and Client § 10 — Under provisions of surety bond, surety was given right to employ an attorney of its own selection, and principal was liable fox* fees.

While ordinarily a defendant has the right to employ counsel of his own choosing, when he contracts with the surety on a bond executed by them that the surety should be at liberty to employ an attorney of its own choosing and defend the suit, and that the principal should indemnify the surety for all expenses, including attorney’s fees, the principal may not escape liability for fees of the attorney selected by the surety by giving notice to the surety before trial that he is ready and able to take care of the defense and would not reimburse the surety.

Appeal by defendant from Ervin, Jr., Special Judge, at October Term, 1937, of Durham:.

Affirmed.

Tbe plaintiff sued to recover tbe sum of $150.00 alleged to be due it from tbe defendant for its reasonable fees paid to attorneys in defending a case for tort brought against tbis defendant, as principal, and tbe plaintiff, as surety, on a bond heretofore executed by them.

That contract of insurance, among other things, provided: “Second: Tbe undersigned will at all times indemnify and keep indemnified tbe company, and bold and save it harmless from and against any and all liability for damages, loss, costs, charges and expenses of whatever kind or nature (including counsel and attorney’s fees, which the company shall or may, at any time, sustain or incur by reason or in consequence of having executed the bond herein applied for, or any and all other bonds executed for us at or at our instance and request), etc.”

“Third: The undersigned does hereby further agree to indemnify the said Maryland Casualty Company against any suit or claim brought or instituted against said company, whether such suit or claim be rightfully or wrongfully brought or instituted, and in case suit shall be brought upon said bond, the surety shall be at liberty to employ an attorney of its own selection to appear and defend the suit in its behalf at the expense of the undersigned.”

When service of summons was made upon the defendant Teer and the casualty company, Teer notified the casualty company not to employ counsel or to go to any expense in connection with the case, since he was in position to defend the suit and would not pay any expense incurred by the company as attorney’s fees in connection with the case.

Notwithstanding the notice, this plaintiff did employ counsel, who actively participated in the case, filing a demurrer for the surety company, which was sustained. This defendant also employed counsel in the case.

There is no controversy as to tbe reasonableness of tbe fees paid by tbe plaintiff.

From tbe judgment in favor of tbe plaintiff, tbe defendant appealed.

B. M. Gantt for plaintiff, appellee.

W. P. Farthing for defendant, appellant.

Per Curiam.

Tbe defendant argues tbat tbe notice wbicb be gave tbe plaintiff to tbe effect tbat be was ready and able to take care of tbe defense of tbe case in wbicb tbey were jointly sued, bimself employing attorneys and paying fees, and would not reimburse plaintiff for attorney’s fees paid by it, bad tbe legal effect of relieving tbe defendant of any obligation on bis contract in tbis respect.

Tbe right of a person against whom a suit has been brought to employ counsel of bis own choosing is rather fundamental in our practice. We are inclined to sustain it as being reasonable, unless it is found to be abrogated by contract. We find in tbe contract between tbe parties no provision to which tbe privilege claimed by tbe defendant can be referred, and we are not persuaded tbat it arises as a legal incident to tbe relation of principal and surety in tbe indemnity bond. Indeed, as we see it, some violence must be done tbe treaty between tbe parties to reach such a result, since in the contract it is expressly provided tbat in case of suit tbe plaintiff surety company may employ counsel of its own choosing.

We conclude, therefore, tbat tbe notice given by tbe defendant to tbe plaintiff did not have tbe legal effect of relieving him from tbe obligation to reimburse tbe plaintiff for attorney’s fees paid in defense of tbe former suit, and tbe judgment is

Affirmed.