Tutty v. Ryan

I ’otter, J ustick. This is a suit instituted in the District Court in and for Crook County, upon an undertaking given upon the allowance of a temporary restraining order in an action brought against the plaintiff in error herein by one J. C. Ryan, one of the defendants in error. The sole purpose of that action was to enjoin the diversion and use of certain springs, to the water of which as tributary to a certain stream the said Ryan claimed a prior appropriation. Upon the final hearing of said injunction suit in the District Court, there was a general finding for the defendant therein, and it was ordered that the temporary restraining order be and the same was thereby dissolved, that it ought not to have been granted, and that defendant therein “go hence without day” and recover his costs. Said judgment was rendered June 23, T903. The present suit was commenced October 16, 1903, by the plaintiff in error against the said Ryan as principal and the other defendants in error as sureties in said undertaking to recover damages alleged to have been sustained in consequence of the temporary restraining order. To the petition alleging the allowance and issuing of the injunction, the execution of the undertaking, the judgment of the District Court, and the damages claimed to have been suffered on account of the injunction, and their nonpayment, the defendants interposed a pleading styled “Plea in abatement,” alleging that the judgment of the — 140 — District Court was not final and setting forth in detail various steps that had been taken by the defendant Ryan, the plaintiff in the injunction suit, to commence and perfect proceedings in error in the Supreme Court of the state for the review and reversal of the judgment of the District Court in said suit; from which it appears that after the commencement of this action upon the undertaking, a proceeding in error had been duly perfected in the Supreme Court, and was then pending therein, wherein a reversal of the judgment in the former suit was sought, but it does not appear that any supersedeas bond was given. The plea prayed that the action may be abated. To the plea in abatement, so-called, the plaintiff filed a general demurrer, which was overruled by the court; and, the plaintiff refusing to plead further, the court entered judgment that the action be dismissed and that defendants recover their costs. The plaintiff complains of that judgment on error. Counsel for plaintiff in error question, in the first place, the right of a defendant to file a plea in abatement by that name, on the ground that such a plea has been abolished by the code. Section 3532, Revised Statutes, declares that the only pleadings allowed are: (x) Petition. (2) Demurrer. (3) Answer; which, when affirmative relief is demanded therein, may be styled cross-petition. (4) Reply. But, for the purpose of the argument, counsel assume-that the plea properly raised the question as to the right to maintain the action, and do not seem to insist upon the ohj ectionable title of the pleading. We need not consider whether a pleading to be technically styled a plea in abatement is ever authorized under the code, since the pleading before us contains the essentials of an answer alleging facts deemed sufficient to abate the action, and it may properly be regarded as such, notwithstanding the name given it by the pleader. It may be observed, however, that generally under the code procedure an answer seems to be considered the appropriate medium for presenting issuable — 141 — facts either in abatement or bar of the action. (See 2 Abbott’s Trial Briefs on Pleadings, pp. 999-1001, note 6.) The important inquiry presented is whether the pendency of the proceeding in error for the review of the judgment in the injunction suit constituted a good defense in abatement of the action on the undertaking, the said error proceeding having been instituted within the period prescribed by the statute. The statute requires the undertaking in case of an injunction to he given “to secure to the party enjoined the damages he may sustain if it be finally decided that the injunction ought not to have been granted.” (R. S., Sec. 4043.) And the condition of the undertaking sued on is that the obligors will pay the defendant, his heirs and administrators, “such damages as he may sustain not exceeding the sum of two hundred and fifty dollars, in case it shall be finally determined and decided that said injunction should not have been granted.” It is a familiar principle that sureties are bound only by the terms and conditions of their bonds. The obligation here entered into is to pay the damages sustained in case it be finally decided that the injunction should not have been granted, which is substantially the obligation prescribed by the statute. A judgment rendered by the District Court may be reversed, vacated or modified by the Supreme Court for errors appearing on the record. (R. S., Secs. 4247, 4249.) The proceedings to obtain such reversal, vacation or modification shall be by petition in error setting forth the errors complained of. (R. S., Sec. 4251.) And upon reversing a judgment the Supreme Court may proceed to render such judgment as the court below should have rendered, or may remand the cause to the court below for such judgment. (R. S., Sec. 4265.) These provisions constitute a part of the code containing the section prescribing the condition of an injunction undertaking. It is true that the code also provides that no proceeding to reverse, vacate or modify a judgment or final order of — 142 — the Distinct Court, except in certain immaterial cases, shall operate to stay execution until a written undertaking with sureties shall be filed as prescribed by the 'statute. (R. S., Sec. 4256.) But this is not a suit upon the judgment, nor a proceeding to enforce the same. No written undertaking to stay execution having been filed, the injunction defendant might have caused execution to issue to collect his judgment for costs from the property of the injunction plaintiff. But that execution would not have run against the sureties. Their only liability is upon the undertaking-signed by them, and this suit is based upon that undertaking. It is not perceived that the filing of an undertaking to stay execution would have made any material difference in the liability of the parties on the undertaking-sued on. The question is, had there been a final decision, within the contemplation of the statute, and the meaning of the undertaking, that the injunction ought not to -have been granted. We have not been cited to any authority holding that, pending an appeal from the judgment in the injunction suit which may result in its reversal or vacation, suit may be successfully maintained upon the injunction bond, nor has our somewhat careful investigation disclosed any. Counsel for plaintiff in error cite a long list of cases to the effect that such an action does not lie until the final determination of the cause in which the bond is given, although the injunction ma3>- have been dissolved prior to final judgment, and, sincé those cases generally were where suit on the bond was instituted after dissolution and before final judgment, it is argued that the reasoning and expressions of the courts indicate that an action lies immediately upon the termination of the suit in the court in which the bond is given. In those cases the question as to the effect of an appeal was not considered; and in the absence of any appeal it is doubtless true that the action may be maintained immediate^ after final termination in’the trial court. But we cannot agree that the reasoning- of the courts in — 143 — the class of cases mentioned indicate that, although an appeal be taken, recovery may nevertheless be had on the bond pending the appeal. The general rule is well settled that an action on an injunction bond cannot be maintained before final decree in the cause in which the bond was given; and the reason usually assigned for that rule is, that an interlocutory dissolution can in no sense be considered a final disposition of the injunction, or a decision that the plaintiff was not entitled thereto, since upon final hearing it may be reinstated and made perpetual. And while the rule has more generally found expression in cases where suit has been brought after dissolution on motion, and before final disposition of the cause in the court where it originated, the reasoning to our mind is as persuasive against the right to maintain the suit pending proceedings on appeal or error that may result in a reversal or vacation of the judgment of the trial court, and in a reinstatement of the injunction and an order .of the appellate court requiring it to be made perpetual. And in two states at least it has been so held. In Missouri the • precise question was decided; and it was held that an action on an injunction bond, instituted pending_a valid appeal from a final decree dismissing plaintiff’s bill, cannot be maintained, although no supersedeas was filed. (Cohn v. Lehman, 93 Mo., 574.) In that case the court bases its decision upon the general principle above stated that no right of action accrues on the bond until a final decree be rendered in the cause. AVith reference to the absence of a supersedeas, the court said in sub-stanc that a supersedeas operates only on the process of the court, it stays execution, and that is its only office, but that in all other respects the appeal is as operative without, as with, supersedeas, and, further, “Rights which do not depend upon the execution of the decree, but which depend upon the final determination of the issues in the suit, are left in the same condition by an appeal without, as with, supersedeas, and, as wc have seen, the right of plaintiff to — 144 — sue in this case is dependent upon the final determination of the suit in which the bond is given.” A judgment for defendant was affirmed. In a case in. New York, the condition of the undertaking was to pay such damages as the injunction defendant might sustain by reason of the injunction, if the court should finally decide that the plaintiff was not entitled thereto. The court said: “The decision of the special term, if allowed to stand, was a determination of the case. But when an appeal was perfected by the execution of the bond required by the code, the final decision was postponed until that appeal was decided. In the meantime, the defendant has no claim to an order of reference to assess the damages. The plaintiff having appealed, and executed the proper undertaking, it cannot be claimed that there has been a final determination of the cause.” (Musgrave v. Sherwood, 76 N. Y., 194.) The reference in that case to the bond on appeal seems to have been directed only to its effect in perfecting the appeal, and, on reading the whole case, it is not, we think, to be understood that the court rested its conclusion so much upon the fact that the judgment had been stayed by the appeal bond, as upon the proposition that pending appe'al there had not been a final determination that the plaintiff was not entitled to the in j unction. Another case quite analogous on principle is Maxwell v. Griffith, 20 Wash., 106 (54 Pac., 938). That was a suit on an attachment bond. When it was begun, an appeal was pending from the judgment in the principal action, and error was alleged on the appeal in dissolving the attachment. The action was held to have been prematurely begun. The court said in part: “The order dissolving the attachment in this case having been regularly appealed to this court, and undetermined, the order of dissolution was not a final one, but was suspended.” In Ohio the statutory condition of the undertaking is the same as in this state. It has there been held that a — 145 — decree of the court of common pleas making the injunction perpetual did not operate to discharge the obligors from liability, where the decree was appealed from and the appellate court found the original plaintiff’s claim unfounded, .and dismissed the' petition; that the order of the appellate court was the final decision in the cause, and was in effect a decision that the injunction ought not to have been granted; and thereupon an action arose on the bond. (Williams v. Baker, 13 Ohio C. C. Rep., 500.) The condition of a bond sued on in Massachusetts was that the principal obligor would keep and perform the final decree in a cause in equity then pending- in the Circuit Court of the United States for the First Circuit, within and for the District of Massachusetts, in which, etc. (naming the parties). It appeared that an appeal was taken from the final decree rendered in said Circuit Court to the United States Supreme Court, wherein the decree was affirmed with costs and interest, and upon the mandate from said appellate court, the Circuit Court affirmed its former decree with costs and interest. In a suit subsequently brought on the bond, the question arose as to which decree was the “final” one referred to in the condition of the bond. The court held that the last decree, which included the whole amount of damages and costs, was the final decree within the meaning- of the bond. (Jordan v. Agawam Woolen Co., 106 Mass., 571.) And it was held in an English case that where a cognovit provided for entering judgment thereon after final hearing and final decree in a certain chancery suit, it was improper because premature to enter up judgment on the cognovit pending an appeal from the decree in such chancer)' suit. Lord Denman said: “Final decree must mean a conclusive decree; the decree of the master of the rolls is not conclusive till the appeal be determined.” (Jones v. Reynolds, 1 A. & E., 384.) The question involved is a novel one, judged from the scarcity of authority, and not free from difficulty; but the — 146 — proposition seems to us'clear and irrefutable that where, as in this jurisdiction, the injunction plaintiff is allowed, without’ bond, to institute and perfect proceedings in the' Supreme Court for the review of the adverse judgment of the District Court, wherein and whereby the appellate court may reverse, vacate or modify the judgment and may enter or order to be entered an entirely different judgment, it cannot reasonably be said that, pending the appeal, there has been a final determination of the cause, or that the judgment appealed from amounted to a final decision that the injunction ought not to have been granted, within the contemplation of the statute. We have not deemed it material to the question here involved whether, ordinarily, the effect of an appeal or proceeding in error is to suspend the operation of a judgment as'evidence or as an estoppel. On that subject the authorities are not harmonious. (See 2 Black on Judg., Sec. 510.) Possibly, in view of the judgment adverse to his claims and while it remains unreversed, the injunction plaintiff would be unable on the same state of facts to secure another injunction; and the judgment is clearly enough competent evidence of the decision of the court which rendered it. But is it to be taken as conclusive evidence in a suit on the undertaking that it has been finally decided that the injunction should not have been granted, in the face of the fact that a proceeding in error is duty pending in a superior tribunal which may result in the vacation of the judgment? We think not. Although no case has been cited maintaining the right ■to sustain the action on the bond pending appellate proceedings duly perfected, counsel for plaintiff in error refer us to two cases deemed by them to have that effect. We do not so understand them. One of the cases is Alaska Imp. Co. v. Hirsh, 119 Cal., 249 (47 Pac., 124). The contention in that case was that the action was prematurely brought, inasmuch as the time for appeal had not expired. It was not claimed that an appeal had been taken, but reliance was — 147 — solely placed upon the alleged fact that the time within which it might be taken had not expired. It must be readily seen that a very different question was presented, since there was nothing to show that an appeal would in reality be perfected or even attempted. But the court did not even decide the question so presented. The defendants based their contention on a statute which provided that “an action is deemed to be pending from the time of its commencement until its final determination upon appeal, or until the time for appeal has passed, unless the judgment is sooner satisfied.” And the court held that, as the answer did not allege that the judgment had not been satisfied, it would be assumed that it was satisfied at the date of its entry; and hence the- pleading failed to show that the time for appeal had not expired. The court, however, did remark, in passing, that the cases on the general subject seemed to assume that an action might lie brought after final judgment entered by the court in the suit in which the bond was given. It is evident that the question now before us was not considered in the case cited, and that the reference to the general holding of the cases is not to be regarded as in any sense an expression of an opinion contrary to our conclusion. The other case is Tullock v. Mulvane, 61 Kan., 650; 60 Pac., 749; S. C., 184; U. S., 497. The defendant Mulvane had contracted to sell the capital stock of a certain corporation to Coffin & Stanton and Woodbury & Moulton. The firm of Wescott & Hanson, claiming that Mulvane had previously contracted to sell the same stock to them, brought an action in the United States Circuit Court to compel a specific performance of the agreement to sell to them, and for an injunction against the execution of the contract to sell to the other parties. Injunction was granted, but’was subsequently dissolved b) the Circuit Court, on motion of Coffin & Stanton, on the ground thattan indispensable party had not been made defendant, and could not be without ousting the court of jurisdiction, because such party and the plaintiffs were citizens of the same state. When the — 148 — injunction was granted the plaintiffs were permitted to make a cash deposit instead of giving bond; but after dissolution they were permitted to substitute a bond for ’the deposit; and the bond recited that the injunction had been dissolved. Subsequently, upon stipulation, the bill was dismissed as to all defendants except Mulvane, and so much of the bill as sought a specific performance was withdrawn, and the suit was allowed to proceed against Mul-vane as at law for damages for non-performance, instead of in equit)' for specific performance of the contract between plaintiffs and Mulvane. By the aforesaid stipulation the dismissed defendants expressly waived all right of action on the injunction bond, but it was agreed that the. dismissal should not enlarge or lessen, or in any manner affect the rights or remedies of Mulvane against complainants in that or any other action. On final hearing- of tire suit as one for damages, the bill was dismissed with costs in favor of defendant Mulvane. The plaintiffs appealed to the Circuit Court of Appeals from the decree finalfy dismissing- their bill, and, pending that appeal, Mulvane instituted action upon the injunction bond. Against the contention that the action was prematurely brought pending-such appeal, both the Supreme Court of Kansas and the Supreme Court of the United States, where the suit on the bond was taken on error, held that the appeal was not from the order dismissing the bill for specific performance, because that dismissal was had at the instance of the plaintiffs themselves, but was from the order dismissing the bill for damages; that it was not an appeal from the order dismissing- the bill for injunction, because that dismissal was involved in the dismissal of the claim for specific performance; and that the effect of the dismissal of the bill for specific performance was to abandon the claim for an injunction, since the injunction could only be awarded as an incident to the equitable relief. The Supreme Court of the United States say that the necessary effect of the agreement for the withdrawal of all demand for specific performance — 149 — was to withdraw from the case all controversy on the subject of the injunction. It has seemed necessary to go so far into the facts of that case to show clearly what was decided. Neither court decided that, pending an appeal from the judgment dissolving an injunction, an action could be maintained upon the injunction bond. But they decided that there had been no appeal from the judgment dissolving the injunction, and upon that ground alone the objection that the action was prematurely begun was held to be untenable. There is nothing contained in the opinion of either court indicating that the action would have been properly brought had the question as to the injunction been involved in a valid appeal. On the contrary, the indication, if any, is the other way. There is no error in the record. Judgment will be affirmed. Affirmed. Corn, C. J., concurs.