H. F. Livermore Co. v. Fidelity & Casualty Co.

Pierce, J. This is an action of contract, brought against the defendant in the Municipal Court of the City of Boston, on a bond to dissolve an attachment of real estate in an action in the Superior Court against the North Adams Manufacturing Company. The condition of the bond on which the present action was brought reads: "... Now therefore, if the said North Adams Manufacturing Co. shall within thirty days after the final judgment in the aforesaid action, pay to the plaintiff therein the amount, if any, which it shall recover in such action, and shall also, within thirty days after the entry of any special judgment, which may be entered in said action in accordance with Section twenty-five of Chapter two hundred and thirty-five of the General Laws of the Commonwealth of Massachusetts, pay to said plaintiff the sum, if any, for which such special judgment shall be entered, then this obligation shall be void, otherwise it shall be and remain in full force and virtue.” The trial judge in the Municipal Court gave judgment for the plaintiff and reported the case to the Appellate Division of that court where the decision was upheld and the “Report dismissed.” The case is before this court on appeal of the defendant from the decision of the Appellate Division. The facts found by the trial judge in substance are as [423] follows: The plaintiff brought an action of contract against the North Adams Manufacturing Company by a writ dated March 18, 1922, returnable to the Superior Court for the county of Suffolk on the first Monday of April, 1922, and made an attachment of real estate thereon. On May 18, 1922, the defendant was defaulted and the case was continued on motion of the plaintiff for judgment. On June 8, 1922, an involuntary petition in bankruptcy was filed in the United States District Court against the defendant manufacturing company. On October 8, 1923, there was an adjudication of bankruptcy on said petition. The plaintiff’s claim was proved and allowed at the first meeting of the creditors on October 24, 1923. The trustee of the North Adams Manufacturing Company was ordered to sell and convey the real estate and give a clear title thereto. The attachment of the plaintiff, together with other attachments, was removed by filing bonds so that the transfer of real estate might not be delayed. At the time the bond in suit was obtained the trustee deposited with the defendant in this action the sum of $1,500 as collateral. On March 1, 1924, the bond to dissolve attachment was given by the defendant in the sum of $1,500 and was filed in court on March 4, 1924. On April 23, 1924, the plaintiff waived his motion to continue the case for judgment. On April 28, 1924, judgment was entered in this action against the North Adams Manufacturing Company, damages $910.72, costs $18.91, total $929.63 and said judgment has never been paid or satisfied. No one filed in the original action any motion or paper touching or suggesting the bankruptcy of the defendant. On March 24, 1925, the North Adams Manufacturing Company was discharged in the bankruptcy court. The ruling of the trial judge was right. The Superior Court had jurisdiction of the subject matter and of the parties; the defendant in the original action was defaulted, “no motion or paper touching the bankruptcy” of the defendant therein was filed; and a general judgment against the defendant was entered and has never been satisfied. That judgment, unless and until qualified by some further [424] action of the court, was “the final judgment” within the meaning of those words in the bond to dissolve an attachment. It was a judgment sufficient to form a sound basis for an action against the sureties on the bond. Cases like Barry v. New York Holding & Construction Co. 226 Mass. 14, and S. C. 229 Mass. 308, and authorities there collected, have no pertinency to the facts here disclosed. There was a breach of the bond in suit in the present action upon the failure of the defendant in the original action to pay the plaintiff therein the amount of the final judgment within thirty days after the entry of that judgment. The bankruptcy of the principal obligor in the bond did not affect the obligation of his surety to satisfy the judgment lawfully rendered against the principal or his representatives. Such judgment on the facts was conclusive against the surety. Tapley v. Goodsell, 122 Mass. 176,182. Guaranty Security Corp. v. Oppenheimer, 243 Mass. 324, 326. The provisions of § 67 of the national bankruptcy act have no relation and give no relief to sureties upon bonds given to dissolve attachments. Such a bond is not given in substitution of the property attached. It takes the place of the attachment lien, and gives the person in whose favor it is executed the right of recovery on the bond as on a new obligation not liable to be discharged by the death or insolvency of the debtor. Guaranty Security Corp. v. Oppenheimer, supra. It results that the order of the Appellate Division of the Municipal Court, “Report dismissed” must be affirmed. So ordered.